Western Union commits to compliance

Jean Claude Farah, Western Union’s President for Africa, Middle East, Asia Pacific, Eastern Europe and CIS, has stressed the company’s commitment to abide by the rules and regulations of countries in which it operates.

“Our compliance is in line with what regulators and law enforcement are asking for. We are a continuous investment business and our compliance is second to none in the industry,” he told the B&FT in an exclusive interview.

Mr. Farah’s comments follow a recent incidence in Europe where Western Union was fined €5million by a regulatory body in Ireland in 2011, for not having appropriate policies and procedures to prevent money laundering and detect possible terrorism financing.

Additionally, due to the increased risks level of some of its participating financial institutions, Fidelity Bank announced it has closed its Western Union services in the Cayman Island, Bahamas, Turks and Caicos.

Amidst these challenges, Mr. Farah described the relationship between Western Union and its agents as “more of a marriage”, where things can go up and down but at the end of the day solutions must be found.

“We live and learn, and the more we move forward the better our systems are getting and the stricter our compliance is getting. We can only learn in theory, but learning in practice brings out the best and sometimes we don’t see loopholes; and when we finally see them we make sure that it doesn’t happen next time, and that is how we move forward,” he said.

For the past two decades, Western Union -- a leader in global payment services -- has served as a channel for the inflow of remittances across the globe.

With over 34,000 locations in more than 50 countries and territories, the Western Union network serves more than 17million senders and receivers with a choice of 120 currencies.

A recent World Bank report stated that more than 30million Africans are living outside the continent andcontributing about US$43billion in remittances. Sub-Saharan Africa is a major remittance-receiving region, with an estimated US$32.9billion.

In Ghana, remittances continue to play a vital role in the economy, accounting for US$1.97billion of total GDP in 2013 alone.

“Whatever strategy we put in place we always have the customer in mind. It is the customer who dictates what Western Union should do, so it is based on the demands of the customers that have made us increase our agents all over the country and worldwide. Our growth and expansion is to make sure that whenever and wherever our customers need us we are there and at that time,” he said.

Earlier this week, the company’s decision-making hierarchy visited Ghana’s foremost agric financial institution, Agriculture Development Bank (ADB), to unveil a plaque as part of activities to mark the entry of Western Union into Africa -- with ADB being the first bank in Ghana to partner Western Union in the remittances business. Western Union managers also visited Ecobank’s head office to launch the Account Based Money Transfer (ABMT) services, whereby customers can now access monies transferred to them directly through ATMs.

Managing Director of ADB, Stephen Kpordzih, explained that ADB was the pioneering principal agent for inward money transfers and remittances in the country when it introduced the Western Union Money Transfer franchise in Ghana in 1995.

“ADB’s association with Western Union over the last 20 years has indeed brought a lot of benefits to the bank as well as all and sundry. The introduction of Western Union in Ghana by ADB improved significantly the ease and speed with which relatives, friends and business partners could send money to people in Ghana.

“The ADB brand virtually became synonymous with Western Union and the bank gained financial benefits with its association with Western Union through foreign exchange gains, commissions, target bonuses and others,” Mr. Kpordzih said.

Managing Director of Ecobank Samuel Ashitey Adjei noted that the Ecobank-Western Union relationship, which also started in 1999, has been deepened over the years.

“Currently, Ecobank is the number-one dominant bank while Western Union is the number-one remittance institution within the Ghanaian banking arena. We are delighted to be associated with Western Union which has also excelled in its business,” he said.

Mr. Adjei added that the introduction of ABMT will ensure real synergies in the relationship between the two institutions. “For Ecobank this will translate into free customer acquisition, real-time deposit mobilisation, the decongestion of our banking halls, and enhanced service delivery for the customer,” he added.

Mr. Farah further explained to the B&FT that as the pioneer in the field of money transfer, Western Union would be failing in its mission to help people send money back home if it didn’t increase its footprints across the world and expand access.

“Every country is unique to us. We deal with migrants who left their home country to another one. So if there are Ghanaians anywhere in the world and I cannot help them send money home, then I am missing out on a lot of customers. This is not only in terms of numbers but Western Union failing in its mission to help people send money back home,” he added.

On innovations and newer services to be expected, he explained that the business of Western Union is dictated by customers and currently customers are using mobile money for a lot of activities; therefore, Western Union will be sending directly to the phones of their customers.