In a period where traditional indicators of market direction have become less clear or opaque altogether, the analyst community begins to look farther afield for signs of weakness or improvement. Take remittances for example. A blog post on Bank Talk examines the recent earnings call from Western Union and finds a few troubling signs for the larger global economy.
The first sign is the potential weakening of cross-border movement between Mexico and the United States. Resources migrating from one country to another need financial services that provide cross-border money movement, yet Western Union reports that they are ending a significant agent relationship in Mexico.
From Western Union’s Q3 analyst call:
“We ended relationships with over 7,000 Vigo agent locationsthat could not meet our new compliance requirements. We also experiencedoperational challenges from related system implementations for our Vigo brandin Latin America, as we move this onto our Western Union platform,” said Hikmet Ersek, Western Union’s Chief Executive Officer.
Given the reach of these agents, with no replacement service, this action might result in a large population group that has a more difficult and/or more expensive means of accessing or sending funds. But as physical locations begin to disappear, it will put more emphasis on the market to create even more digital-based money movement products to fill in the gap.
Click here to read more from Western Union’s analyst call.