Canada’s third-largest bank by market capitalisation, Scotiabank, has more than 7 million customers and 1016 retail outlets. In spring 2008, the bank started offering Western Union remittance services through three platforms: in-branch, call centres and online.
Prior to this co-operation agreement, Scotiabank was using typical wires services for money transfers. Through the agreement, customers can send money from a Scotiabank branch, call a call centre or go through the bank’s online banking service. The Scotiabank online service has built a proprietary front-end piece of software onto its own banking platform, but all remittances transactions carried out link into the Western Union network.
Brent Currie, managing director of core deposits and payments at Scotiabank, explains: “When we decided that adding an improved remittance solution to our product suite was a strategically sound decision, we did investigate the relative merits of a ‘buy’ versus ‘build’ approach. When we looked at the costs and complexities involved in building our own remittance solution from scratch, it quickly became apparent that it was much more efficient to work with an established company like Western Union. Not only would the initial systems build and ongoing maintenance costs and complexities be significant, we would not benefit from the years of experience Western Union has acquired in the areas of remittance efficiency, AML [anti-money laundering] and fraud mitigation.”
According to Currie, the co-operation is an ongoing success. The relationship has met customer and staff expectations on a number of levels – also growing the volumes. “Transaction volumes continue to rise every month, especially if you look at the online service. We launched a new online pricing strategy with Western Union in summer 2009 – a set C$9 plus 1% fee – and that has been very successful with good growth each month.” The volume of remittances being carried out within Scotiabank branches also continues to rise every month and that’s attributable, says Currie, to the engagement and support of the Western Union business development managers. Currie adds that these managers’ visits to branches has helped staff to recognise a customer who should be sending a Western Union transfer, and has helped to overcome any objection or reticence in using the service. And, importantly, the customer feedback has been positive, too.
Strengthening the Platform
Being able to offer Western Union services has strengthened Scotiabank’s retail banking and multicultural banking strategies, says Currie. “Immigration is a big driver of population growth in Canada and because of this the Western Union co-operation really helps us to appeal to those new Canadians, and to give them good options to send money back home to friends and family. We’ve found it has been a very good way to extend our value proposition and acquire new customers when they come to Canada.” But the services are used by more than just new arrivals in Canada, as long-term Canadians are also using the services to send money to their family in other countries or to children studying abroad.
Scotiabank takes its multicultural customers very seriously. In 2008, Scotiabank’s multicultural banking unit launched the Scotiabank StartRight Programme for Newcomers, a financial package designed to meet the needs of new immigrants, international students, foreign workers and immigrant investors, even before they move to Canada. People planning to move to Canada can open a Canadian bank account with Scotiabank and wire transfer money before they leave their country, providing them with peace of mind and a ‘soft landing’.
Once they arrive in Canada, they can visit a branch to get a Visa credit card, a safety deposit box, as well as other financial solutions and information tools to help them get settled faster. Scotiabank’s multicultural banking unit is focused on delivering cost-effective, innovative, and customer-centric products and services to meet the needs of the multicultural community. “By launching this co-operation we were able to offer fast, reliable and easy money transfer services and as such it has helped to increase the value of our multicultural banking platform,” says Currie.
Gaining and keeping new customers has been a core tenant to the new co-operation, too. “You do have to be a Scotiabank customer to send a Western Union money transfer from us – so anyone who isn’t a Scotiabank customer is offered a free chequing account for a year,” says Currie. This can be set up on the spot and the money transfer can be sent. It then allows Scotiabank to open conversations with those new customers about other financial needs they might have and what services the bank may offer them.
Currie adds: “Even in the current financial climate remittances have remained stable – and it is continuing to grow month over month. It’s not a discretionary spend – sending money back to my parents or my children is not something that will be cut back.
Currie also emphasises: “Staff engagement is always key – you want to make sure that your marketing messages make sense for the target markets you are trying to appeal to, but I would say that the biggest thing is the front-line experience and making sure that your customer service reps understand the service. They must understand the benefits for it and be able to talk to the customer about it. That interaction between one banker and one customer is where this cooperation comes together.”
Staff training is of course important to staff engagement and the general success of the service. The ‘how to send a transfer’ training is only one element of staff education for this partnership. The other element, which may be even more important, according to Currie, is being able to recognise when the service is appropriate. “Training service staff to get the customer to articulate exactly what they need is really important – finding out how quickly the funds need to arrive at their destination, for example, is important that our representative can advise each customer on the right product for them.”
Eighteen months on, it is clear that things are going well. Increased month-on-month volumes shows that the growth potential for remittances has not yet peaked. Scotiabank is confident that this will only continue to grow. Strengthening the multicultural banking aspect and gaining new customers has made providing Western Union remittances services as easy fit for the bank. “All banks are looking to add value in different ways, but it is a global economy. As the world seems to shrink, more and more people are looking to send money around the world. Having a service like this helps us to keep a strong customer servicing experience,” says Currie.
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