Thursday 21 September 2017
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Compliance and risk management in the money transfer industry

Banking, with the increasing use of information technology, has been serving people with all the possible ways. Information technology has changed the way banking takes place in our life. In today’s banking has been a hassle free service which you can enjoy only by sitting at your home. The same transformation in banking and other money transfer service providers have been addressed. Traditionally, the people working outside the country and alone without their family for business or job purpose within the country, supposed the send money through either writing cheques and sending through post or sending money through money order. It is the business in practice for the very long time, there were some risks in this process, and the process was very much time taking. The use of information technology in banking services has transformed the way of sending money electronically; now you don’t need to write cheques and money orders to send money within the country or outside the country. Now, you can send money to your family within the day from anywhere in the world. Any ease of work brings some risk with it. The same has happened with the use of information technology in banking services. With the increasing use of information technology has made the money transfer process little bit of risk. There are different types of risk associated with electronic money transfer using information technology. To overcome these risks, the concerned government, in which country these banking institutions are, operating, issues rules books and guidelines for the safest money transfer.

There is some risk associated with money transfer, and it’s industry and different compliance to safeguard to money transfer operations.

Risks which are associated with the money transfers create hurdles in the growth of the money transfer industry. These risks make the industry somewhere untrustworthy in the mind of the common customer.

The increasing use of information technology is adding different features in banking process that is why stating the complete detail of the risks, and its management is not possible, but here we have said the maximum risk and its remittances.

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Operations Risk: Operational risk in the money transfer industry are associated with the failure of the internal banking system, unreliability of the banking system, failure of the security compliances, attacks of the external online threads such as hacking antivirus, Operations risk also arises due to misuse from the end of customer like sharing the unique identification number with other unauthorized people. There are different types of operational risks associated with online money transfer system such as security risks, system design risks, customer misuse the information risk. The money transfer agencies and banks are compliance to use the information technology services of the trusted and top organizations which are trusted to design the most secured banking system. Customers also advised not to share the information related to money transfer with any other unauthorized person.

Reputation risk: This is another very significant risk which associated with the money transfer industry. This risk arises with the negative opinion of the customers and market about the money transfer operations. This risk is created as a result of any miss operated transaction in which the customer is not satisfied with the service delivered by the company such as the problem in receiving money at receiver’s site due to my reason, such as on availability of cash, the system not working and many others. The compliance from the concerned government regarding the availability of the minimum cash at all the branches and availability of electricity and other required things to operate the system without any break.

Legal risk:   Legal risk arises due to violations of any business compliances in any condition, such as sharing the information of the customer with others. This type of risk occurs when any of the legal compliance with either party is not fulfilled with due diligence. There are compliances issued from the side of the concerned government to overcome these types of legal issues. The government has made punishment rules to either party in case of violation of a rule.

To overcome all these all the service providers are advised to ensure all the compliance are being followed with due delegacy and customer are urged to use reputed money transfer organization, which monitors all operational compliance to deliver the best service to the customer.Instarem one such service providers in the money transfer industry who ensure that money transfers are done in the fastest and safest manner. You can check out their services at here


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