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- A Diversified Financial Services Company:
- Focused on banking, insurance, investments, mortgages, and consumer
finance
- Wells Fargo Bank covers 23 states
- Coverage includes 12 of the nation’s fastest growing states
- Includes key ethnic minority population states: California, Colorado, Texas, New
Mexico, Arizona, and Nevada
- Wells Fargo Financial covers the majority of United States and also
features an international presence in Canada, Latin America and the
Caribbean
- Wells Fargo Home Mortgage covers the the entire United States and
features the most extensive franchise of the company
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- Key Wells Fargo Ratings:
- Only “Aaa” rated bank by Moody’s in the US
- #5 US bank with $388 Billion in Assets (12/31/03)
- #1 Total stores with 5,900 stores
- #3 Bank with 3,021 stores
- #1 Supermarket bank with 680 stores
- #3 ATM Network with 6,192 ATMs
- #1 Mortgage bank with an additional 997 stores
- #4 Consumer finance company with 1,221 stores
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- Consumer Remittance Opportunity:
- US International remittance market is currently estimated at $50 Billion
- Concentration:
- Mexico remittances market is $14 Billion
- Indian remittances market is $11 Billion
- Latin America & Caribbean remittance market is $32 Billion (2002)
- 69% of all Latinos living in the US send remittances (Bendixen 2002)
- 75% of all Latino remittances come from the United States (Orozco 2003)
- 44% of all Latinos lack bank accounts in the US (SRC 2002)
- Non-Banks Dominate the Market:
- 45% of remittances are processed by informal networks
- Banks share of remittance business is estimated at 9% (Nilson) and 16%
(Celent)
- More than 50% of total volume is distributed by financial institutions
offshore (Orozco 2003)
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- Mexican Matrícula Consular Card accepted as valid Identification for
account opening process
- No minimum balance requirements
- No initial deposit required
- Transfers can be initiated at the bank branch, ATM, over the phone or
online
- Only $10 fee per transfer for up $3,000 per transfer/per day
- No monthly account maintenance fees
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- Security: Secure transfer from
the Wells Fargo account to the beneficiary’s bank account abroad. There are no intermediaries.
- Convenience: Account access is available 24 hours a
day, over the telephone, online
or at thousands of Wells Fargo Bank locations and ATMs
- Distribution: Largest Direct
Distribution of any US Bank:
- BBVA Bancomer features the largest branch network distribution Mexico
with over 1,600 branch locations and 3,700 ATMs throughout the country.
- HSBC Mexico features one of Mexico premier distribution networks with
over 1,400 branch locations and 4,500 ATMs throughout the country.
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- “We’re proud to have been the
first major financial services company in the United States to help
Mexican nationals move from the risky cash economy into secure and
reliable financial services – by promoting acceptance of matrícula card
as a primary form of identification.”
- October 24, 2003
- Dick Kovacevich
- Wells Fargo, Chairman and CEO
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- It’s the people that make the difference!
- Wells Fargo banker and teller initially drive the customer relationship
- In Mexico, the BBVA Bancomer or HSBC Mexico banker and tellers provide
a personal touch
- ATM, Internet, and Telephone are transaction and self-service channels
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- All product materials available in language
- Adjusted store formats to appeal to the local community
- All channels offer in language service (ATM, Online, Phone Bank)
- Local level community advisory boards
- Local decision making and execution
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- Promotional vs. Brand Image Campaigns
- Locallly driven focus (grass roots)
- Community group partnerships
- Consular offices
- Financial literacy programs
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- Above avg. cross sell level : Exceeds 4.2 product cross sell (company
average)
- Above avg. remittances: $600+/remittance
- Double digit growth in transaction volume and value
- High satisfaction scores with customer base with high referral potential
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- Increased Household Acquisition
- Increased product cross sell
- Long term relationships
- Loyalty effect -> Referral & Retention
- Sustained growth
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- Banks and community groups must develop and facilitate financial
literacy programs to provide the appropriate exposure to financial
products. Here are some examples:
- Matricula Consular Guide (Financial literacy pamphlet) currently
distributed by all of the Mexican Consulates and funded by major
financial institutions in the US
- Financial literacy programs such as:
- www.handsonbanking.org
- www.elfuturoentusmanos.org
- Bancarization efforts must be bilateral (sending and receiving banks
must be equally focused)
- Foreign governments may consider incentives and benefits for both large
and small financial institutions
- Provide enhanced access (more convenient bank and ATM locations)
- Product development focus (simplified products/low cost)
- US case: CRA recognizes distribution and product focus
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- Wells Fargo has opened over 400,000 accounts with the Matricula Consular
in the United States
- Banks in Latin America and the Caribbean may consider ways to simplify
the documentation requirements
- In the US, most banks only require two forms of ID and a Social
Security number (SSN) or Individual Tax Payer Identification number
(ITN)
- Banks in Latin America and the Caribbean must look for ways to simplify
and streamline the new account opening process and related personal
identification/documentation
requirements in order to simplify the process.
- Limit account opening requirements
- Simplify the account opening application form
- Reduce fixed costs associated with minimum balances, etc
- Banks in Latin America and the Caribbean may consider low cost
alternatives to initial low transaction (lower cost) activity accounts
opened by remittance recipients
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- Card based solutions are one of the ideal vehicles for remittances in
Latin America and the Caribbean in the future
- The near term effectiveness of this remittance vehicle is limited by the
following factors:
- Limited ATM distribution in the rural areas
- In major cities, ATMs are predominant in the business districts and
somewhat limited in the residential low to middle income districts
- Card acceptance at retail consumer outlets in Latin America is growing
at a incredibly fast pace.
Distribution must continue to grow.
- The retailer’s costs associated with processing card transactions in
Latin America requires further analysis
- ATM security and safety must be guarded in order to guarantee safety to
the remittance recipient
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- Consumer awareness of lower priced remittance product alternatives with
banks is a key challenge
- Local media and community organizations must play a role
- Independent party cost comparisons of existing products and associated
pricing are needed for remittances:
- Mexico: PROFECO provides a
weekly cost comparison
- Cost comparisons should be made at the low end and high end
transaction amount levels ($200, $500, $1,000, $1,500)
- Cost comparison information should be provided in print media and
published by consumer advocacy groups
- Partial savings of remittances should be encouraged by sending and
receiving institutions to promote productive use of remittance in the
form of new venture capital and/or educational investments.
- The productive use of remittances will enhance the long term financial
position of the remittance receiver
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- Daniel I. Ayala
- Senior Vice President
- Cross Border Payments Manager
- 925.686.7466
- daniel.ayala@wellsfargo.com
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Notes
