We’re coasting on a wave of transformation right now, and as the global marketplace becomes increasingly interconnected, every industry is experiencing some big shifts, many of which are driven by rapid technological advancements and evolving consumer behaviors.
The global mobility industry – which encompasses the movement of people, goods, and services across borders – plays a big part in this transformation, and as these movements ebb and flow, the banking industry adapts, finding innovative ways to cater to the unique financial needs and challenges posed by this dynamic sector. The two are inextricably linked, and as a relocation management company, it’s in our best interest to stay abreast of the evolving trends in the global banking sphere, because the exchange of money plays a key role in how we move talent.
So, here is what you need to know about the dominant trends and challenges in global banking – valuable intel for any company exchanging money, goods, or services across borders.
Sticky Spots for Sending Money
When sending money abroad, the process is rarely consistent across regions, and even bordering countries can have vastly different regulatory processes. Below are the top five most difficult countries to send money to, and the specific challenges that make the process so…sticky.
- South Africa – Sender beware: funds are typically held for compliance review at the receiving bank, and they are often slow to act or request the required information to release the funds.
- Brazil – Because BRL can’t be sent directly to Brazil, the funds flow through a local broker who converts the funds into BRL for delivery. But to do so, the Beneficiary must complete a Cadastro (registration).
- China – In most cases, the Beneficiary must contact their bank to claim the funds and submit documentation supporting the payment. If delayed, they may be affected by currency exchange rates.
- United Arab Emirates – Payments to suppliers in UAE are typically delayed for compliance review, leading to OFAC investigations and delayed delivery of funds. Why? Because these suppliers may also conduct business with sanctioned countries.
- Colombia – The receiving banks will typically attempt to contact the Beneficiary using the phone number included in the wire instructions, but if the Employee doesn’t answer the call, the release of funds can be delayed.
What to Expect
The average time for most global payments to reach the receiving bank and be recognized by the customer is 2-4 days. But in some countries (i.e., South Africa), the wait can be as long as 5-10 days.
The OFAC (US Office of Foreign Assets Control) administers and enforces economic sanctions programs against countries and groups of individuals under the direction of the US Government. Primarily due to the war between Russia and Ukraine, we have seen a sharp increase in OFAC investigations, from 2-3 per day to as many as 15-20 per day. The impact? These investigations delay the posting of the funds, typically by a few days to several weeks.
Each bank involved in sending the funds is required to complete a compliance review. This includes the sending bank, intermediary bank and receiving bank.
Tips to avoid OFAC investigations:
- Enter complete bank account names (legal name), which should be the name on file at the receiving bank. Do not use an alias or short form such as John for Jonathan.
- Enter the complete and correct employee address. Do not enter N/A, etc.
The Digital Revolution of Global Banking
Global mobility’s intricate and highly multidimensional nature necessitates robust risk management and compliance measures. Banks are facing the challenge of ensuring that financial transactions related to global mobility are secure and compliant with local and international regulations. To address this, more institutions are deploying advanced anti-fraud technologies, stringent identity verification procedures, and blockchain-based solutions to enhance security and transparency.
Meanwhile, for the mobile employee, the digital revolution is making global banking experiences more convenient, frictionless, and secure, irrespective of geographical location. Banks are leveraging technology to provide seamless cross-border transactions, real-time foreign exchange services, and multi-currency accounts tailored to frequent travelers and expatriates, all from the convenience of their smartphones!
In pace with a highly fluid world of work, traditional banking boundaries are blurring to make way for more borderless banking solutions that cater to the financial needs of international travelers, expats, and global businesses. Banking institutions are partnering with fintech companies to create innovative solutions such as global account access, virtual wallets, and international payment platforms. With each innovation, the relocating employee experience is made even more seamless, and financial services are made more accessible, adaptable, and beneficial to all.
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