Reimagining remittances with collaborative product development
Collaborative product development has resulted in TavexWise intuitive solution with an enhanced customer experience and lower costs of international remittances.
Money flows where it is needed, and the business requirement is to ensure its journey is as smooth as possible.
According to the UN, 272 million people were living outside their country of birth in 2019. That’s the highest level of movement on record, and the number is proliferating, 700 million people could be displaced globally by 2050.
People migrate for various economic, political, educational, and environmental reasons. Some are searching for a job, education opportunities, and as a result, increased quality of life outside their homes.
Parents are financially supporting their children during their university time abroad; migrants are financially taking care of their families in their home countries; long-distance friendships are maintained with acts of financial generosity.
It is challenging to live far from your loved ones. Most of us feel those hardships through our personal experience now, being separated from family and friends due to the pandemic. In such circumstances, communication tools help to cope with being apart, and money transfer systems enable supporting each other when it’s necessary and desired.
According to World Bank Data in its remittance report by 2021, the total value of remittances will reach $597 billion.
Challenges when transferring remittances between countries
Outlining one specific element is challenging. The importance lies in a combination of features that make up the whole international money transfer service experience. These certainly are the speed of the transfer, exchange rate, cost of the service, security, and intuitiveness of the solution.
However, the traditional money transfer process through big and conservative financial institutions is in contrary time-consuming, full of bureaucracy, long lines, and high fees. Remittance in banking is both slow and cumbersome, with remittance advice often out of date.
Why is the difference so drastic? What are the barriers in the remittance industry? In short, a combination of fraud and scams, changing exchange rates, security issues, burdensome regulations. One providing remittance service needs to solve all of them with no exception.
TavexWise: Acting on a market demand
TavexWise was established in 2014, challenging the notion that money transfers should be conducted through a bank or a recognized money transfer operator. TavexWise aimed to address the end-user needs with an effortless yet secure remittance solution.
The company founders understood that the heavily manual process, excel sheets, and archaic IT systems are not capable of solving rapidly growing challenges and were faced with three possible scenarios.
- To put together a modular system merging all the existing solutions available on the market.
- Develop the tool they urgently needed internally, establishing a full-scale development team.
- Partner up with a tech company.
They chose the last option, and that’s when cooperation between Proekspert and TavexWise began.
The decision to partner up with Proekspert was not a coincidence. For TavexWise, it was essential to have a partner with extensive fintech experience, and Proekspert’s 20+ years expertise in the banking sector became a decisive factor in their quest for a partner.
Purpose of the cooperation – end-user satisfaction. From the very beginning, the cooperation was well aligned in tandem. TavexWise took full responsibility for the business needs and Proekspert for the best technological fit to design a superior experience for end-users. A joint multi-functional team was formed to design the product development strategy that ensured that each phase was correctly mapped out.
Always begin with the end-user experience
The priority for the team was to develop a brand new money transfer system that is fast and affordable for the end-user.
What challenges needed to be overcome? The main concerns to begin with were cost, speed, and usability of the service.
How? By solving what makes it so expensive and slow.
Step by step, together, we designed a system that automates and speeds up all the critical components necessary to facilitate smooth and cost-effective money transfers.
Combatting remittance fraud. To verify a customer’s identity, an integration with an Estonian ID and similar systems in different countries was built. To prevent and combat financial crimes, especially money laundering and financing of terrorism, the solution was linked to the Police, fraud databases and internal credit reference tools.
Currency fluctuation risk was mitigated by real-time connections with the FOREX trading system, and the exchange rate feeds through API. The latter provides the speed and reliability needed to reduce the margin of error and ultimately save money. The pricing module was built, creating real-time customer prices for both currency and transaction fees.
The whole solution logic was replicated for eight different countries – Estonia, Latvia, Finland, Norway, Denmark, Sweden, Poland, Bulgaria, where TavexWise has a physical presence, plus additional partner countries, where transactions are happening in cooperation with local agents.
Merging different IT systems achieves true synergy
When the end-user pains were solved, we started auditing the whole IT ecosystem of TavexWise, thinking about optimizing internal business processes and creating value.
That’s how an internal transaction system for their offices in different countries was developed; it consists of a series of custom-built solutions:
A financial reporting system provides necessary input for monitoring data from global transactions effortlessly, with improved accuracy and depth from the previous approach of using paper-based and Excel to handle transactions.
The internal transaction system was created to manage currency position values over different markets, countries, and currency pairs, and perform netting transactions between company offices in nine countries.
A natural follow-on from this module was the bookkeeping solution, where transactions are generated and sent directly to an ERP system. The advantages of such a system are clear, helping the client to keep all financial reporting legally sound and easily referenced in the future – another massive plus is the ability to use it as an in-house information management system.
Cultivating customer experience is non-negotiable
One can have the best technological solution, yet it will be useless without an enjoyable customer experience. The entire customer journey for TavexWise’s service was designed using direct feedback from both sides of the solution – the agents, registering the transactions, and the end-users benefiting from it.
Direct means direct. Agents, advanced users of the system, are reporting obstacles whenever they experience it or based on the feedback received from the customers. Obstacles turn into tasks in the team’s backlog and are tackled based on the priority level.
And it’s a two-way road.
When some improvements are not being used, it’s a sign of poor usability or internal communication – an invaluable input to making it better.
This kind of smooth cooperation on both ends can be possible when your partner is reliable and has a genuinely transparent and enjoyable company culture with committed employees, all of which TavexWise has.
Data-driven strategies to scale and profit
Data is a superpower, especially in the financial world. Dashboards, monitor your business’s health 24/7, enable you to make fast decisions based on real business conditions. Possibility to track and “zoom in” to the single agent in a particular country to find the root cause.
Models, built and trained based on real historical data, provide information about possible future scenarios. As a result, you feel that you are in charge of your business, with full confidence.
Where are we now?
As a result of our partnership, the end-user enjoys intuitive service, where
- Money can be sent via cash or card from physical offices
- Money transfers worldwide can be done through a web system
- Low transaction fees are applied. To be precise, you can compare your win with other existing platforms
- The transaction speed is fast, and it takes on average 5 minutes
- The transaction is secure, and all the security requirements are fulfilled
- Customers experience excellent service at physical locations
And TavexWise has
- A healthy and efficient business model
- A data-driven analytics supporting decision making
Over the last five years, a platform for automating the process of sending and receiving cash and payments was built. One by one, new countries were added. The business-critical systems were both automated and then linked with each other. Data dashboards were designed to support management decisions. The process’s effectiveness can be explained with simple math, despite the expanding geography, continually changing regulations, and the growing complexity of the system, the team size never changed. The entire system is being developed and maintained with a team of 6 people in total.
The result of this particular collaboration and partnership with TavexWise, a solution was built from ground zero, which made a significant impact on the remittance market and thus many households throughout the world.
What makes up a great product? It’s usability and value.
We achieved both by doing what we do best – build great products while the Tavex team did what they do best – see and develop excellent business potential, so you could do what you want and need to do best – take care of and support your loved ones.
That could be a beautiful end to the story, but business loves movement. COVID-19 happened, and here we are, standing at the crossroads, rethinking the right path to choose.
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