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Pacific Remittances Project

This page describes our work in the Pacific Remittances Project (PRP) which addresses challenges facing remittance services both within New Zealand and in the Pacific region. 

Remittances are a main source of foreign exchange for many Pacific Island countries. They are crucial income for many families in these communities.

With support from the Ministry of Foreign Affairs and Trade (MFAT), we are working to improve access to and reduce costs of remittances to the South Pacific. This in turn will help improve access to banking facilities and improve regulatory compliance.

Challenges in the remittance space

Remittance transactions in the Pacific are expensive due to the region’s small size, remoteness and limited infrastructure. Banks in the Pacific struggle to access global financial services that enable money transfers to and within the region.

This problem is being made worse by international regulations and associated de-risking (how banks remove service to a category of customer), along with the impacts of COVID-19.

PRP workstreams

There are two main workstreams for the Pacific Remittances Project (PRP). Together they intend to:

  • increase operational efficiency
  • improve the standards and culture of compliance
  • reduce cost
  • reduce the likelihood of de-risking
  • better detect and deter financial crime
  • improve financial inclusion.

Workstream 1 looks at the ongoing changes to guidance, legislation and policy relating to anti-money laundering and countering the financing of terrorism (AML/CFT) – that are needed to increase compliance culture, upskill remitters, increase banks' comfort with remitters as customers and stem de-risking – to better facilitate the flow of funds to the region.

Workstream 2 is focused on developing a regional ‘Know Your Customer’ (KYC) facility. This refers to the process of obtaining and verifying the identity of customers, before and during the time they have a business relationship with a reporting entity. The term ‘KYC’ also refers to practices which assess and monitor customer risk.

We have been developing the facility together with South Pacific central banks, the International Monetary Fund and other partner agencies.

The first phase of this work has been successfully completed and approval for the second phase agreed at the South Pacific Governors’ Forum in November 2020. This will include working with commercial banks, remitters, and other important stakeholders in the remittance sector. If successful, this work will also help drive financial inclusion in the region.

Next steps for the project

Currently, we are working with banks and remittance service providers in the Pacific region to help the remittance sector enhance its compliance with regulatory and legal obligations.

This includes:

  • exploring potential policy, legislative and regulatory changes to help stem de-risking
  • providing coordination services
  • providing subject matter expertise around verifying digital identity and payment systems.

At the same time, we are continuing to work with both New Zealand-based stakeholders and regional and international agencies to develop pan-regional guidance.

Our other work in the Pacific

Aside from Pacific remittances, there are several other cross-cutting themes across all parts of our work. These themes present both challenges and opportunities for us in achieving our mandate.

We take an integrated, flexible approach to dealing with these themes which allows us to explore a range of tools and engage with different stakeholders while considering what action to take.

Over the next 12 months, our focus will be on climate change, technology, and fintech.

Subject matter expertise to support regulatory standards

We also provide subject matter expertise to international forums and initiatives to support and enhance regulatory standards globally. These organisations are:

  • the Financial Action Task Force
  • Asia Pacific Group on Money Laundering
  • International Monetary Fund
  • World Bank
  • United Nations
  • Asian Development Bank.

More information

2021

Correspondent banking in the Pacific (PDF 496 KB) – Special report, 1 July 2021

Tide going out on Pacific banking services – News release, 1 July 2021

Keeping the bank door open for Pacific peoples – Opinion piece by Reserve Bank Governor, 27 April 2021

2020

Reserve Bank supports global call to action on remittances – News release, 19 June 2020

Call to Action: Remittances in Crisis: How to Keep them Flowing

SendMoneyPacific.org – a government-funded website with the latest information on international money transfers to the Pacific

2019

34th South Pacific Central Bank Governors' Meeting – News release, November 2019

The FinTech Opportunity in Personal Finance – a speech delivered at the Singapore FinTech Festival by Assistant Governor Simone Robbers, November 2019

Pacific central bankers prioritise capital flows and climate change – News release, April 2019

2018

Joint statement from the South Pacific Governors' Meeting – News release, November 2018