Interview with TransferGo's CMO - Marius Nedelcu

Over the past decade, the remittance industry has witnessed significant changes in customer behavior and expectations. Moneytransfers.com sits down with TransferGo’s CMO, Marius Nedelcu, to talk through these transformations. They have focused on reducing remittance costs and providing a more cost-effective solution by offering choice and passing on savings to customers. TransferGo has leveraged technology to streamline and expedite international money transfers, ensuring transparency, fair exchange rates, and real-time data. They prioritize the safety and privacy of customers' financial information through legal obligations and segregation of funds. TransferGo aims to foster financial inclusion, cater to underserved populations, navigate regulatory challenges, differentiate from emerging models, and prepare for future trends in the remittance industry.

Money Transfers: How has the remittance industry evolved over the past decade, and what significant changes have you observed in terms of customer behaviour and expectations?

When consumers are going through a change of this scale, you either help them in the process or become a blocker in their path. We’re here because we believe in a better way of supporting our customers.

By developing a deep expertise in a market segment, we can gain a deep understanding of the customer, achieve product market fit and gain market share. As a business built with a mission in mind - to make international payments faster, better, cheaper and more accessible for migrants, we’ve seen first-hand their frustrations so have built products and services that support, rather than hinder them.

We understand the friction they face with money transfers and we’re committed to solving them. Our hyper-focus on this issue has resulted in steady and sustained growth, a $50 million Series C raise and over 6 million customers.

The arrival of fintech signalled an intention to disrupt the remittance industry and spotlight how existing, outdated processes should no longer be tolerated. While there’s no doubt that fintechs have changed the industry for the better, traditional banks still benefit from having built a comprehensive product suite and having nationwide resources to draw on.

Marius Nedelcu, TransferGo CMO

MT: Remittance costs have traditionally been high for individuals sending money across borders. How has TransferGo been able to address this issue and provide a more cost-effective solution to its customers?

Historically banks have had a tight grip on the industry – stemming from a strong customer base and catch-all services. It’s against this context that many fintechs now see their next challenge in reducing banks’ hold on the sector.

The arrival of fintech signalled an intention to disrupt the remittance industry and spotlight how existing, outdated processes should no longer be tolerated. While there’s no doubt that fintechs have changed the industry for the better, traditional banks still benefit from having built a comprehensive product suite and having nationwide resources to draw on.

That’s why we’ve taken the opposite approach to banks offer choice. We’ve given our customers more control over their transfers, passing on our savings to them where possible.

MT: Sending money internationally often involves complex processes and lengthy transaction times. How has TransferGo utilized technology to streamline and expedite these processes for its users?

As consumers look towards alternative options, FinTechs like TransferGo have had to take the initiative to demonstrate their purpose and value in times of hardship.

Through the benefits of digital, these providers can offer guaranteed and fair exchange rates, ensuring that migrants who may be undergoing financial difficulties are not stung by hidden remittance fees. What’s more, they can provide consistent and accessible support.

At TransferGo, for instance, we have in-country representatives for each market we operate in. This ensures that customers are able to speak to agents who understand local discourse and issues, and can advise on an appropriate solution. It ensures customers, particularly those who might be new to digital remittances, are not alienated or confused by speaking to an agent in a different country.

Moreover, their value comes in the transparency of digital. Unlike unreliable legacy systems, digitally native money transfer services can provide accurate and real-time data on how long remittances will take and offer transparent information on where a payee’s money is. Where migrants may already be under significant pressure to provide for themselves and loved ones back home, remittance services should alleviate, not contribute towards, any distress. Through demonstrating purpose and value through the pandemic, there’s an opportunity to build trust with a new customer base and keep migrant communities connected with those they treasure most.

MT: What role do mobile applications and digital platforms play in the remittance industry today? How has TransferGo leveraged these technologies to enhance user experience and accessibility?

Customers have accelerated their adoption of digital technology, and this pace of adoption was undoubtedly a factor of COVID-19. Can you imagine going back to the same manual processes – like queuing in banks to send money abroad when the technology exists to do all of that without leaving your home? The pandemic accelerated the rate of digitising so many facets of the customer experience, and the ecosystem that supports that.

With that in mind, we design our systems as a collection of services, which is a never-ending process. But, at the heart of each operation is the customer experience. Every service or microservice that is designed has the customers at the starting point and is anchored to the customer experience we want to deliver. This not only gives us flexibility but allows us to develop new services and offerings at speed that are in line with what our customers want.

Fraud plays on emotions of confusion, scarcity, and urgency, so for those particularly complex or sensitive cases, automated websites and customer service bots will not suffice. Instead, we invest significantly in human intervention – something we believe is critical in delivering a personal, reassuring touch that ensures regardless of the situation, the customer’s needs are put first.

Marius Nedelcu, TransferGo CMO

MT: Security is a crucial concern when it comes to remittance transactions. How does TransferGo ensure the safety and privacy of its customers' financial information and transactions?

We’re not a bank, so we don’t take any risks with your money. This means we don’t need to use financial protection schemes to insure your money, like banks do. (These schemes usually only refund some of your money if your bank loses it, or goes bust.)Instead, we protect all of your money through safeguarding, a way of making sure your money is safe, even if TransferGo goes bust. It does this by legally obliging us to segregate your money from ours—which means we keep your money in separate accounts to the ones we use to run TransferGo. These segregated accounts are with a range of large banks that meet our and our regulator's requirements.

Fraud plays on emotions of confusion, scarcity, and urgency, so for those particularly complex or sensitive cases, automated websites and customer service bots will not suffice. Instead, we invest significantly in human intervention – something we believe is critical in delivering a personal, reassuring touch that ensures regardless of the situation, the customer’s needs are put first.

MT: Many individuals sending money abroad face challenges related to financial inclusion and access to banking services. How does TransferGo cater to the needs of underserved populations and those without traditional banking relationships?

Every business will say they want to foster financial inclusion, and make financial services more accessible but it’s different for us - the migrant community is ingrained in TransferGo’s DNA. We fundamentally understand their frustrations and demands with cross-border payments because we are them, and they are us.

We built a direct line from the customer services team into the CEO and wider c-suite, so every new market we open is a success and our product innovation remains aligned with customer demands and expectations - in our call centres for example, we employ over 25 different nationalities and have customer agents that are fluent in nine languages in all local markets But if you to bring that closer to home you can look at what we’ve done over the last few months, to support displaced people from Ukraine in the best way we know how – developing services to help Ukrainian customers and other markets get the most out of their money.

We’ve also helped the Ukrainian Embassy in the UK and charities in EU countries to access donations and finances to help civilians. Providing refugees with access to finances is a human right, and while it is just one of many of life’s necessities, we hope it will support the healing process."

MT: Governments and regulatory bodies have increased their focus on remittance services to combat money laundering and ensure compliance with anti-money laundering (AML) regulations. How does TransferGo navigate these regulatory challenges while maintaining a seamless user experience?

One of the key responsibilities for fintechs is keeping customers protected from fraud. As the world gets accustomed to using digital payments ,fintechs need to be vigilant. While financial loss is damaging to both the customer and financial services provider, fraud can cause emotional distress to customers and also impact the providers’ reputation, resulting in long-term repercussions. So, with fintech being a nascent industry, and a disruptor to established financial institutions, fintechs like us have to do all they can in their power to maintain the trust built with customers.

Part of this will be a greater investment in automated technology that provides a robust first line of defence with strict Know-Your-Customer and Anti-Money Laundering protections. But we feel we have to go one step further and pay closer attention towards the importance of having empathetic and well-trained customer service agents.

Financial services will become increasingly specialist and bespoke to its market segment. Currently, the market is awash with one-size-fits-all solutions, adopted during the pandemic when there was an accelerated need for online, accessible, and secure services.

Banks and financial institutions were forced to expedite their own digital transformation plans to compete with the value provided by fintechs. But while this provided choice and helped drive financial inclusion when consumers needed it most, these services cannot last in a crowded market. In the cross-border payments space, for instance, it’s critical that services reflect the nuances of the remittance market. Every corridor is different, and remitters often have niche requirements when looking to transfer money back home.

Marius Nedelcu, TransferGo CMO

MT: In recent years, there has been a surge in alternative remittance models, such as peer-to-peer transfers and mobile wallets. How does TransferGo differentiate itself from these emerging models and maintain its competitive edge?

Industry partnerships are an undervalued vehicle in allowing fintechs to scale at pace without the same level of risk of trying to develop everything in-house. By partnering with leading financial services organisations, fintechs can expand their service repertoire, widen their network and knowledge-share without the same level of financial or resource cost that would accompany doing it independently. Moreover, partnerships allow fintechs to work with those that have existing market expertise or infrastructure, which means that product development and market expansion has a higher chance of success.

However, for collaborations to be effective, partners need to share in the same values and mission. For example, at TransferGo, we partnered with Mastercard to enable customers across Europe to make international money transfers from any payment card or bank account directly to a debit or credit card. It came at a point during the pandemic when there was increased demand for safe and secure digital payments from migrants.

MT: As the remittance industry continues to evolve, what emerging trends or technologies do you foresee having a significant impact on the sector in the next few years? How is TransferGo preparing to adapt to these changes and stay ahead of the curve?

Financial services will become increasingly specialist and bespoke to its market segment. Currently, the market is awash with one-size-fits-all solutions, adopted during the pandemic when there was an accelerated need for online, accessible, and secure services.

Banks and financial institutions were forced to expedite their own digital transformation plans to compete with the value provided by fintechs. But while this provided choice and helped drive financial inclusion when consumers needed it most, these services cannot last in a crowded market. In the cross-border payments space, for instance, it’s critical that services reflect the nuances of the remittance market. Every corridor is different, and remitters often have niche requirements when looking to transfer money back home.

At TransferGo, for example, we have built a specialist payments service for the migrant customer segment through corridors such as between the UK, Ukraine, Turkey and more. Next year, those with a blanket approach to money transfers – or indeed the wider financial services market - will find themselves falling out of favour. These companies will either need to pull back entirely or develop a bespoke approach to compete.

MT: Lastly, what is TransferGo's vision for the future of the remittance industry, and how does the company plan to contribute to its growth and development in the coming years?

Whether it’s the service provider or the end-user, there’s no doubt that the future of international money transfers will be grounded in digital solutions. The pandemic has taught us that the online experience is king and there’s no reason for this to change once lockdown restrictions ease.

Customers want fast, easy access to their remittance services, they don’t want to queue in long lines or get stung with unnecessary fees. This will likely mean that providers will consolidate their services around a digital-first experience, while customers will have a greater choice in the services available to them.