In 2020, an estimated 3.6 percent (281 million people) of the global population were migrants. The officially recorded flow of remittances from migrants to low­- and middle-income countries reached USD 540 billion in 2020. Remittances represent a large component of GDP for many receiving countries and are a major supporting income stream for many households. 

Exploring untapped opportunities for faster and more affordable remittance services

Remittances are a key contributing factor to the financial health and resilience of migrants’ households. The new technologies that have emerged in the financial services markets offer untapped opportunities for faster and more affordable remittance services to migrants. These new alternative channels are attractive to users and provide an avenue to encourage them to gradually enter the formal remittances market. But, the expected transition from cash to digital remittances channels remains largely unrealised. 

There is little demand-side research available to explain the current patterns of conduct and provide insight into the real needs and barriers of remittances users, and their perceptions and attitude levels towards formal and digital remittances services. Knowing and understanding their customer journey, pain points and opportunities will help with designing more migrant-centric products and innovations.

The objective of this project is to conduct a demand-side research in eight countries engaging eight service remittances providers partners of UNCDF with the dual aim of providing customer insights that can refine innovations for more adapted products through action-oriented research, and contribute to institutional learning. 

The three stages of research

KIT will carry out: 

1. The institutional data analysis: KIT will lead the process of identifying the main profiles of remittance users by analysing the profile and transaction data of institutional databases 
2. The lean data survey: We will use the profiles to dig deeper and map the access and usage of remittance products by both senders and receivers, as well as their knowledge and capabilities and their financial resilience. 

The third component will be carried out by our partner Butterfly Works

3. Qualitative behavioural research: Butterfly Works will complement the quantitative research with behavioural qualitative research using human-centric design methodology to explore the migrants and their families’ current and ideal customer journeys. The qualitative research will help to understand their motivations for taking up remittance services, and digital financial products in particular, their challenges and behavioural biases, their financial literacy level, and their real needs.

Digital financial literacy toolkit

The results of the research will also guide the development of a Digital Financial Literacy Toolkit that will help remittance service providers to design and embed financial education as part of their service to their clients. This toolkit will be developed by Aflatoun International.

A second toolkit will be produced by Butterfly Works. This is a Human-Centred Design (HCD) toolkit that can be used by remittance service providers to guide them in the development of more customer-centric products.