Big data facilitates international money transfers

The global money transfer market is growing at a remarkable pace. According to a World Bank report from last year, nearly $613bn worth of financial transactions were processed across international lines.

A lot of factors are driving demand for international money transfer services. Companies that offer these services are under more pressure than ever to streamline payment delivery and look out for the needs of all of their stakeholders. Advances in big data have helped them meet these goals.

Challenges facing the international money

As the industry grows, it faces more pressure to overcome some of the biggest challenges that it faces on multiple fronts. Companies must recognize that they will be forced to comply with stricter regulations if they fail to adapt solutions on their own.

One of the biggest challenges that money transfer companies face is adapting to the growing gig economy. The gig economy has created a number of challenges of its own, such as ensuring that all citizens comply with their tax obligations in their place of residence. If a contractor is a US citizen living abroad, they will also need to pay taxes to the Internal Revenue Service.

Money transfer companies also must cope with a growing number of cybersecurity threats. Hackers are becoming more sophisticated and deploying different types of attacks every year.

Companies like the UK currency behemoth Moneycorp are dedicated to offering higher quality financial services to their customers. Moneycorp is turning to big data and machine learning solutions to address these growing problems. In 2014, it started using Tableau Analytics to improve customer loyalty, something Henry McKeon told ComputerworldUK has given the company a strong advantage.

"Before Tableau we spent two years building a suite of management information reporting. It had multiple layers and it would take all of the source data from all the different parts of Moneycorp whether it be the corporate business, the private business, our old online system or the wholesale business. We were trying to bring that together into one layer with extract, transform, load, staging layers and data cubes," McKeon said.

The company strives to work with customers in various sectors, but this can be overwhelming without investing in the highest quality technology. Fortunately, big data has helped MoneyCorp carve a competitive edge in an industry that becomes more consolidated every year.

What are the core benefits of big data for the global money transfer industry in 2019?

Financial organizations that offer international money transfer services have discovered that new advances in big data are the solution to many of their challenges. A representative from Moneycorp told us that there are some reasons they are becoming more reliant on it, listed below.

Improving customer satisfaction with better convenience

There are a number of ways that financial institutions can use big data to improve customer satisfaction. One of the biggest benefits is that advances in data technology have made it easier for them to support multiple payment gateways. This is a much-needed feature, since a large number of customers want to be more flexible with the types of payment processing solutions they use. One of the biggest issues is that some payment processing services are unavailable in certain regions, so companies must be able to support alternatives.

Another benefit of big data is that it reduces the turnaround time for processing financial transactions. There are several explanations for this. Improved data technology makes it easier for money transfer companies to quickly match and confirm the swift codes of different banks. MoneyCorp said that companies are also able to perform security checks more quickly and have that are automated services for verifying the availability of funds in the sender's account.

Mitigate fraud risks

Big data also helps international money transfer companies minimize the risk of online fraud. This industry is constantly being targeted by cyber criminals, so it needs to constantly adapt with more affective security solutions.

When it comes to tackling cyberattacks, big data has proven to be very effective. In 2011, Xoom caught fraudsters with machine learning-based cybersecurity protocols, for example.

Big data is also going to be highly effective at addressing the growing threat of ransomware. Ransomware attacks reached a new highs a couple of years ago. Around 35% of these attacks were launched against professional services companies, a large number of which were in the financial sector.

Crypto attacks are also a growing threat that money transfer companies must deal with. These attacks rose 44% in 2018. Fortunately, new AI algorithms have proven to be highly effective at preventing them.

Improve exchange rates and lower transfer fees

Big data is also improving the cost effectiveness of the global money transfer industry. According to Richtopia, it has helped reduce exchange rates and transfer fees. This is especially important for smaller businesses that operate across the world. By reducing the costs of transferring money, financial institutions will be able to better serve their smaller customers.