USA to South Asia: The Potential

IMTC Miami 2010

South Asians: What about them?

• Over 25 million South Asians live and work in North America, Europe, Australia / New Zealand, South East Asia, Africa and Middle East

• Major corridors: USA - South Asia: 5 mill, Canada - South Asia: 2.5 mill, Europe - South Asia: 5 mill, Middle East - South Asia: 9 million \

• This is the world’s fastest growing remittance sector

$16 BILL (2001)..TO ..$72 BILL est (2010)

Countries of South Asia

INDIABANGLADESHPAKISTANNEPALBHUTANSRI LANKAMALDIVESAFGHANISTAN

UnderSAARC

BIG PICTURE: SOUTH ASIA

GLOBAL: $72 BILLION

FROM USA: $22 BILLION

EST INFLOW 2010

South Asia: The Big Picture…

INDIA & BANGLADESH ESTIMATE

INDIA BANGLADESH

PAKISTAN & NEPAL ESTIMATE

PAKISTAN NEPAL

RECEIVE INFLOW: CONTINENT OF ORIGIN

INDIA PAKISTAN

BANGLADESH NEPAL

India – the growth pattern2001 to 2010: $11 bill to $49 bill – 15% year to year

Forecast: 2010 to 2015: $49 bill to $79 bill – 10% year to year

2005 2010

Bank Segment Direct 14 bill 25 bill

Cash Pick up 6 bill 12 bill

Service providers 2 bill 8 bill

Others 1 bill 4 bill

PAYEE INFRASTRUCTURE

• India: Cash pick up thru MTSS (banks and non banks); limited players; total over 100,000 pick up locations

• India: Banks offer account credit; own and 3rd party bank, provide cash pick up service, over 70,000 bank branches

• Bangladesh: Only banks, account credits / cash pick upover 12,000 locations

• Pakistan: Only banks, account credits / cash pick up, FOREX cos fading out; over 10,000 locations

• Sri Lanka: Only banks, over 6000 locations

• Nepal: Banks and Forex cos; over 6000 locations

CENTRAL BANK REGULATED, WELL DEVELOPED

India – the ‘big’ market, strengths and weaknesses of different segments

Banks Money Transfer Cos. Service Providers

Distribution Strong receiving. Physical. Both payee Rides on partners’

No send. Internet. and ‘send’. Limited web distribution

Brand identity Strong. Strong for ‘old’ like WU Rides on partners’

Ethnic cos. = ethnic identity brand. No own identity

Legal / Regulatory Favorable for Unfavorable. Tough for Not required. Partners

Central Banks new and small entrants have the approvals

Technology Access to good Old players – use tech. Concept based

tech. Not flexible on tech platform

Industry position Money transfer Premium. Defines Undefined. Service

allied service industry. Provider

Revenue (RPT) Marginal. Add on High. Competition Marginal. Survive on

to other services pulls down RPT high vols thru partners

Internet Business (INDIA)

• 2 categories: 1. Indirect - Web co. accepts trans for transfer to bank accounts

2. Direct - Bank’s web site accepts transfers for credit to its own accounts or elsewhere

• Fast growing segment - 2008 - $ 2 billionEstimated - 2009 - $ 3 Billion

2010 est - $ 4.5 Billion

• Major Indirect Players - remit2india

• Major Direct Players - ICICI Bank, Citibank, SBI

USA South Asia Market - 2010

India - $15 BillionPakistan – 2 Bill, Bangla. – 2 Bill

Nepal – .8 Bill, Sri Lanka – 1.5 Bill

Bank Deposit$9 Bill

Cash – 5 billOther – 1bill

Bank Deposit$2.5 bill

Cash$4 bill

Go

Govt. banks

ICICI

Citibank

Private Banks

Private Processors

WU

MG

XM

Regional

Misc

Govt. banks

Private Banks

WU

MG

Forex Cos.

Misc.

South Asians IN USA

CURRENT STATUS: USA

• Traditional agent based: rely mainly on ethnic agents • Big Brands: can also ride on non ethnic agents, chain stores

(like Duane Reade, Walmart etc.)• Internet based: focused on India, BIG GROWTH Service

Providers and also Banks• Banking Channels: Ethnic banks (SBI), Non ethnic banks

with presence in S. Asia (Citi, HSBC)• South Asian ‘run’ Money Transmitters: strong ethnic

orientation and identity: FASTEST GROWING SEGMENT

• MOBILE MONEY TRANSFER: YET TO CATCH UP

Competitive Environment

• USA: South Asia corridor grossly unutilized• Disorganized and scattered competition• No BIG ETHNIC branding• Big players ride on global branding• Small ethnic players serve niche markets due to

limited resources• Only big players try to make inroads

• REQUIRES MEDIUM SIZE PLAYERS

Why Customization

• Will force a custom made solution for South Asia• South Asian market - sophisticated, brand

conscious, high principal, less frequency but high average revenue per transaction

• Strategic mix of send distribution points: focus branches / offices, agent locations, Internet / fax / phone / mail based sales

• Successful branding effort through full use of ethnic media and public relation efforts

How to get into the game?• What's the strategy: Full Service Brand or Add on service

• Full Service Brand: Best long term payoutCreate ethnic brand / sub brandSend Distribution thru ethnic locationsSelect best payers / payees in regionFocus on language / culture sensitivitiesWeb based service adds to agent based

• Add on: Quickest but low revenue yield Select a good South Asian partner service Target ethnic communities in your stronghold Hire ethnic agents, or train your agents Limited and location sales / marketing

Why to get into it

• First mover advantage; before it becomes cluttered

• Current focus only on North East, rest still lacks maturity: HUGE OPPORTUNITY

• S. Asian market still registers growth compared to the saturated South American and Mexican market

• Existing companies can easily leverage upon their current infrastructure: LESS CAPITAL INVESTMENT

• South Asian population in USA rising fast: PROJECTED TO HIT 8 MILL IN NEXT 5 YEARS

• High yield per transaction, quick build up of good revenue

CONCLUSION

OVER 1.5 BILLION PEOPLE RECEIVE MKT

OVER 25 MILLION MIGRANT (US 5 MILL)

$72 BILL INFLOW GLOBAL (US - $22 BILL)

IGNORE THIS AT YOUR OWN PERIL!!

THANK YOU!