What recent initiatives has Western Union been working on?
In the UAE, digitization of all sectors has seen a big spike in the past few years and continues to be so. Customer expectations are constantly changing in response to the digital environment. These expectations of speed and connectivity have been carried over to their consumption of “digital utilities” - from the moment one lands in the airport to the payment infrastructure and many other services required, to bring greater convenience to customers. We recently collaborated with Dubai Electricity and Water Authority (DEWA), so customers can conveniently collect their security deposit refunds at Western Union locations across the United Arab Emirates and around the world. In addition, we signed a MoU with the Arab Federation to look at how we could help create an Arab-centric approach to e-commerce. More recently, Western Union announced it will collaborate with Amazon to provide a new payment option that allows customers to pay in person, in local currency, for their Amazon purchases, available initially in 10 launch markets and to be extended thereafter. Our outlook for 2019 is extremely promising.
What makes Dubai and the UAE unique, and what are the key differences between your markets and the other Western Union markets?
In the Middle East, each country has different dynamics, portfolios and customer behaviors. The UAE, to be specific, is unique for many reasons. It is one of the most multi-cultural and globalized countries in the world, with a strong need for cross-border money transfers to support children studying abroad, send gifts to family and friends around the world or support families and loved ones back home. It is also the regional hub for foreign currency exchange, sending and accepting large monetary transfers from the Middle East, Asia and Europe. Approximately 140 money exchange houses operate in the UAE, a country with a population of about 9 million people. There is a strong presence of diaspora communities from surrounding nations including Jordan, Lebanon, Egypt, other African countries, as well as many Asian and South Asian nations including Philippines, India, Bangladesh, Pakistan, and Sri Lanka, who send remittances back home on a monthly basis, presenting a large market opportunity for Western Union. Also, the UAE government has played a key role in driving and fostering innovation in all fields. They have done a tremendous job in the past 10-15 years in terms of government investment, improving its infrastructure, attracting FDI and making the UAE a great place to work and live. UAE's willingness to keep innovating to maintain its position as a desirable location is one of its biggest strengths and sets it apart from other markets.
How has this influx of people expanded the remittances market in the region?
According to the April report from the World Bank, global remittances rebounded in 2017 after two years of decline. Overall remittances grew 7% to USD613 billion from USD573 billion in 2016, and an even greater increase of 8.5% in remittances going to developing countries. Growth of over 4% is expected in 2018. The influx of people is the backbone of our growth over the past years. Saudi Arabia and UAE were among the top ten destination countries for international migrants in 2017, according to a World Bank Report. Additionally, Saudi Arabia and UAE are in the top 10 remittance sending countries globally. The ambitious growth plans of countries in the region, with strong infrastructure development, continues to draw on talent from around the world, driving the need for cross-border money transfers.
What are the biggest challenges for the region and your sector?
Digital technology is transforming the world, and FinTech and digitization are on everyone's radars. Our focus in the past few years has been around providing the best possible customer experience, network expansion for customer convenience. Today, Western Union has the largest network of agent locations with over 525,000 locations in over 200 countries and territories. Currently, digital transformation is our top priority. It wasn't easy and we're not stopping; we've transformed ourselves into one of the fastest-growing digital money transfer firms in the world, spanning 50 countries globally with our digital services, four of which is in the Middle East. We launched westernunion.com in Bahrain, Qatar, Oman, and Kuwait, and the UAE will be launched soon. Lebanon and Jordan will follow next. The challenge we face is to accelerate this digital growth amidst the current regulations in place around money transfers. e-KYC (process for electronic customer profile verification online, post registration) is one of the initiatives we are working on, and we continue to cooperate with regulators to implement this initiative; this will make for a better customer experience for digital transactions. Western Union continues to explore new technologies that can bring a greater degree of efficiency and automation to the process of end-to-end customer identity, moving away from paper-based systems. Regulations need to be adapted to the digital transformation, to ensure customers' have the best digital experience.
What advice would you give to the investment community that is considering entering the Dubai market for the first time?
The UAE has made fundamental innovations in the past years and has simplified the process of investing in this country. The safety of the UAE and its pro-business environment that encourages investors are key to the success of the country. Dubai's infrastructure development makes it a great place to work and live. When it comes to money transfer and remittances, this is a growing and changing industry, and one must always be ready and willing to adapt to new changes that will inevitably occur.