Interview of the Month

Mr Leon Isaacs, Managing Director, IAMTN

Mr Leon Isaacs is the Managing Di rec tor of IAMTN, the leading international trade association representing money transfer service providers in about 90 countries and territories. He is also the CEO of Developing Markets Associates Ltd, a remittances and development advisory services business. Before joining IAMTN in November 2008, Isaacs served IAMTN since its inception as a member of the advisory board and also represented the association at the World Bank and G8's Private Public Partnership Steering Group. He is also a steering group member of UK Remittances Task Force supported by Department for International Development (DFID). Isaacs has about 16 years of experience in the remittance industry, having served Coinstar Money Tr ans fer Ltd, MoneyGr am International Ltd and Thomas Cook Group in various managerial positions.

International Association of Money Transfer Networks (IAMTN)

About the Organisation

International Association of Money Transfer Networks (IAMTN) is the leading international trade association established in January 2006 by a group of leading money transfer service providers and retail banks. IAMTN aims to increase awareness about the global money transfer industry and about the importance of remittance mainly to the developing economies. It also coordinates with government agencies, financial regulators and anti-money laundering organisations to help the industry grow in an increasingly regulated environment. IAMTN, in its role as a trade association, helps its members to form partnerships with other companies globally. It also provides research data on money transfers and related industries to its members.

Q. What attracted you to take up this new assignment? What were your expectations while joining a trade organisation, IAMTN?

I have been actively involved with this exciting industry since the early 1990s and have always felt that at times industry participants need to work together in areas of non-competitive common interest. I had been an Advisory Board member at IAMTN since its inception in 2007 and found that IAMTN had a very able organisational team. However, I also realised that there was a need for greater focus on the key issues facing the money transfer industry and that more practical experience of the areas that people in remittance companies face on a day-to-day basis was required.

Q. Please share with us your experience so far as the top functionary of IAMTN.

I don't see myself as the top functionary, but as a person who can help steer the organisation on a path that is set by our members. The first couple of months have really been spent in understanding what IAMTN has done in the past and, even more importantly, talking to existing and prospective members about their vision for IAMTN. I have been really impressed with the team and with the enthusiasm that the members of the industry have shown for being part of an organisation that adds value to their operations.

Q. What are your views about the relevance, significance and scope of IAMTN?

Now, more than ever, there is a need for an industry association that represents money transfer companies and stakeholders. With growing focus on new areas of regulations; new co-operative business models, e.g. mobile money transfers, microfinance; and unprecedented interest from the G8 and inter-governmental bodies for the first time ever, some parts of the industry are being looked on in a very positive light. However, the industry has historically operated in an uncoordinated manner that has actually gone against its collective interest and often left its voice unheard. I believe that IAMTN can provide that mouthpiece and ensure that when there is a matter of relevance, e.g. Payment Services Directive (PSD) etc, people know where to go and whom to talk to.

The scope of IAMTN needs to be rightly focused on representing the needs of money transfer companies and in particular cross-border remittance companies as well as all other organisations that are associated with the industry, including legal companies, technology companies , compl iance organisations etc.

Q. What are your plans for expanding the reach of IAMTN and its services to the global money transfer industry?

There are a number of key activities that we are looking to work on. These include developing a Vision of how the industry will look in 2020, being an active lobbyist, forming links with other relevant trade bodies, e.g. Mobey Forum, Finance Club etc, being a thought leader, providing networking events and opportunities, sharing of information etc.

We are forming a new Advisory Board that will comprise of members from all parts of the world and across disciplines. This will ensure that the organisation has global and functional relevance to all potential members. It will comprise of experts who have all 'been there and done that' and really will be an organisation that is 'for the people by the people'.

Q. In recent past, MTL 2008 has been a major event for IAMTN and the industry at large. How was your experience at MTL 2008?

MTL 2008 happened on my first two days in the new role. So it was obviously challenging and exciting. Personally it was great to see so many new people attending and it helped me to understand the variety of people and companies that are now interested in international money transfers and remittances.

The standard of presentation was exceptionally high and I think that the audience gained a great deal from it. The presentations by Sanket (Mohapatra) of the World Bank on the current economic outlook for remittances started the programme in the perfect way and the whole event progressed very well from there. The network opportunities were also very high. In future, I would like to see more people attending such events so that the messages can be heard by even more people.

Q. What will be the theme of the upcoming event in Dubai, MTD 2009?

MTD is going to focus on the issues that are crucial for our members – the global economic climate, regulatory changes, new technology and so on. It will also offer some practical insights from companies that can provide services to money transfer operators. Of course, it will also provide a great opportunity for networking.

Q. What are your views on the current slowdown in the world economy and its impact on the remittance business?

Undoubtedly it has an impact – the World Bank is projecting between 0.9% and 6% drop in the level of remittances this year. It is clear that as economies slow and the demand for labour in areas like construction decline, this will have an impact on the volume of remittances being sent. However, there are definitely opportunities out there – particularly for companies that try to convert informal channels, focus on their core strengths and look at innovation. We should not let ourselves get into negative mindsets and I see one of the roles of IAMTN as accentuating the positive.

Q. With the new US administration in office, what do you feel about the changes in the country's immigration policy and its effect on the migrant population?

In the short term I do not think that there will be much of a change. However, I anticipate that there will be more efforts made to 'regularise' the status of some of the illegal immigrants whilst at the same time tightening up new migration. It will obviously take some time for these changes to take effect. The economy will have a bigger effect in the short term..

Q. What do you feel about the new immigration pact signed by the 27 members of the EU? How far will it be effective in coping with the problem of illegal immigration, especially from non-EU member countries?

Personally, I do not think that this helps our industry a great deal. Any additional barrier is not welcome. In fact, most migrants are fulfilling needs that cannot be fulfilled by the people from within the EU. The EU has an aging population and most projections describe a 'demographic time bomb' situation. Therefore, Europe will need more people once we are through the current crisis.

Q. How do you think the EU members, particularly Spain, can attract more high-skilled workers?

This conflicts with the previous question. Clearly, having properly thought through recruitment and retention programmes are important. This will include having attractive roles, family benefits, sufficient earning power to be able to send some funds home and a proper 'ex-pat' type of approach. Reaching formal agreements with countries where the high-skilled workers come from would be beneficial.

Q. What is your view on the new business models evolving in the money transfer industry via the launch of innovative mobile money transfer services such as M-Pesa and Mukuru?

There are many such schemes being developed and some are quite unique. I admire the Mukuru model as it was developed to solve a specific and quite desperate problem, but it actually has much wider scope of application in other markets.

M-PESA has seen a fantastic take up. Interestingly, it was launched as a personto- person money transfer service, but the fastest initial growth actually came from individuals using it to carry their own funds between two places – much in the same fashion as travellers cheques were used. There is no doubt that M-PESA is breaking new ground and decisions made in Kenya are having an implication on how regulators and consumers may see similar services in other parts of the world.

Q. Will the mobile money transfer services be able to bring a lasting change in regions where access to financial services is very limited? How soon do you expect global card/electronic solutions to replace conventional money transfers (cash transfers)?

Mobile payments will help to change the way financial services operate in many countries. At present, I see mobile payments having more of an impact on domestic payments rather than international ones. This is partly because the companies operating them are more comfortable in that environment and they have not solved the 'cash-in' part in the originating country or the foreign exchange element. I am sure this will change.

I do not see cards as having such a big impact globally but where there is high ATM penetration and a good understanding of banking products, cards will have good usage.

Having said that, I expect traditional cash money transfers to be around for many, many years. The brands and networks are very valuable commodities.

Q. Please tell us about IAMTN's 2020 vision for the money transfer industry that you mentioned in the agenda for 2009.

We are currently working on developing a view of how the money transfer industry will look at the end of the next decade. It is clearly an exciting task and we are involving a number of visionary experts to help pull this together.

Q. Do you wish to give any specific message for your reader/industry here?

The organisation is there to meet the needs of all of our members. So we welcome feedback on any activities that our members would like us to undertake. IAMTN is an all inclusive organisation and we would like to welcome as many new members as possible. I look forward to meeting as many of you as possible during this year.