panel on innovative financial products:wells fargo consumer remittance service

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Panel on Innovative Financial Products: Wells Fargo Consumer Remittance Service Daniel I. Ayala Senior Vice President Global Remittance Services Wells Fargo Bank, N.A.

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Page 1: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

Daniel I. Ayala

Senior Vice President

Global Remittance Services

Wells Fargo Bank, N.A.

Page 2: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

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Today’s foreign born accounts for approximately 33.5 million of the U.S. population ~ 11.7 percent

Mexico & Central America

37%

South American

6%

Caribbean10%

Asia25%

Europe14%

Other8%

Immigrant Consumer Opportunity

Source: Current Population Survey, March 2003

Page 3: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

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Wells Fargo Vision:

Satisfy all of our customers’ financial needs and help them succeed financially...

Stated Corporate Strategy

Be our customers’ payments processor. Make sure that Wells Fargo adds real value that enables us to be the intermediary – electronic or

paper – whenever and wherever our customers buy services.

Global Remittance Services Goals

Support the growth and Retention of ethnic households

Maintain a dominant bank player position in the remittance business.

Wells Fargo’s Consumer Remittance Products

Page 4: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

44

Wells Fargo ExpressSend® service

An economical, convenient and dependable way to send money home®.

Allows customers to send money from an eligible Wells Fargo consumer account to a beneficiary for pick-up in cash or for deposit to their account at a Remittance Network Member Bank (RNM)

The ExpressSend service is available to seven countries via a network of 10 major banks

– Mexico: BBVA Bancomer, Banorte, and HSBC– El Salvador: Banco Agricola, S.A.– Guatemala: Banco Industrial, S.A. and Banrural– Philippines: Bank of the Philippine Islands– India: ICICI Bank– Vietnam: Vietnam Bank for Industry and Trade

(VietinBank)– China: Agricultural Bank of China

Strengthen your ties at home when you can’t be there yourselfSM

Page 5: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

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Sample Customer Materials - Philippines

Page 6: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

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Educate consumers: Financial literacy

Page 7: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

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Key Results

High growth business

High product cross sell

Increased household acquisition

Loyalty effect -> Referral & retention

Expansion into other products

Page 8: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

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US Remittance Industry is Transforming…2002 - 2009

• Limited information on global migration and migrant remittance activity.

• Remittances originated almost exclusively by non banks in the US

• Barriers to entry into the remittance business were generally limited. Emergence of many new MTOs.

• Average remittance costs estimated between 20% - 30% of transaction value.

• Prevalent high fees and rich FX spreads receive limited attention from consumer advocates and regulators.

• Almost exclusive industry product focus on cash to cash remittances.

• Most remittance companies have limited relationship and loyalty focus.

• Widely available information on global migration and migrant remittance activity.

• US banks and online players increase focus on the the remittance market opportunity.

• New and existing remittance companies facing significant compliance scrutiny by regulators and the banking system.

• Average remittance costs estimated between 4% - 7% of transaction value due to competitive pressures and increased awareness of costs.

• Legislators and regulators driving enhanced consumer disclosures. Consumer advocacy groups increase focus on pricing practices.

• New remittance solutions offered by banks and remittance players.

• Increasing focus on customer relationship and loyalty.

Pre-2002

Page 9: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

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Increasing relevance of US banks in the remittance space

78%

8%13%

63%

19%18%

58%

26%

12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2004 survey 2006 survey 2008 survey

Remittancecompany

Bank /Creditunion

Mail /Courier /Friendstraveling

58%26%

12%

2% 2%

Remittance company Bank / Credit union

Mail / Courier / Friends traveling ATM / Debit card / InternetNo answer

US Banks and credit union’s market share of the remittance business has increased over the past three years.

A number of key industry developments have influenced this trend:

• Increased regulatory oversight is pushing less efficient remittance companies out of business.• Remittance companies are consolidating (M&A) due to economic and/or compliance pressures.• Foreign Bank acquisitions in U.S. banks and remittance companies (2004 – 2007)• Remittance companies begin to establish alliances with select banks in the US.

Source: Survey of Latin American Immigrants in the United States, Sergio Bendixen 2008.

Page 10: Panel on Innovative Financial Products:Wells Fargo Consumer Remittance Service

Thank You

Daniel I. Ayala

Wells Fargo

Senior Vice President

Global Remittance Services

[email protected]

(925) 686-7466