Growth & Jobs| Remittance technology to enable greater participation in banking system
Remittance technologies, such as mobile money allows financial transactions to be done through a cellular phone. And Jamaicans are gaining easier access to the financial system through new digital technologies to receive, store and spend money, says Horace Hines, general manager, JN Money Services (JNMS).
Hines also noted that money transfer cards are also effective as they do not require the user to own a bank account and can be used to carry out purchases.
"Many Jamaicans find that getting into the formal financial system is inconvenient and costly," Hines said. "There are new digital technologies that allow greater financial inclusion as they are much easier to adopt and reduce the requirement to stand in long lines."
He also pointed out that JNMS, the owners and operators of the JN Money brand, has the JN Money Card, in addition to its online operations. And later this year, the company plans to introduce a mobile app and a mobile wallet for its remittance operations.
"Our National Financial Inclusion Strategy policy states that financial products which channel remittance proceeds into accounts or cards provide access to financial services and encourages persons to use the formal banking system," Hines said.
"We, therefore, believe that by giving Jamaicans access to these technologies, their participation in the formal system will increase over time."
The National Financial Inclusion Strategy notes that although 78 per cent of Jamaicans have bank accounts, most are not active users of the system, with some 23 per cent not making lodgements or withdrawals during a 12-month period. This level of inactivity was 11 per cent higher than recorded in the Latin America and Caribbean region.
Dr Andre Haughton, lecturer in the Department of Economics at The University of the West Indies, Mona, points out that, technologies such as mobile money have worked in other parts of the world to bring about financial inclusion."
"It can be just as effective here; however, the private sector must play an important role," he said. "In doing so, they need to determine how best they can incorporate it to make it profitable."
Digital technology has played a significant role in increasing financial inclusion in The Bahamas, where some 50 per cent of the labour force is under-banked, says Harvey Morris, chief executive officer of Omni Financial Services, a remittance and micro-lending company operating in that country.
"Once our clients had confidence that the funds were available whenever they needed it, we started to see increased use of the service," Morris told the audience at the Caribbean Micro Finance Alliance Forum, which was held at the Hyatt Ziva in Montego Bay late last year.
"We realised that getting persons to use the technology would not happen overnight, especially based on our culture here in the Caribbean, where cash is king," Morris declared. "Therefore, it will take a longer time to get 'buy-in,' and financial literacy will play a huge part in this. However, we're in for the long haul, and, the 'take-up' has been growing."