Tracking changing remittance trends from the US to Africa

Remittances from migrants have become a major financing flow for African economies. Our recent data analysis examined shifting remittance sender demographics from key cities in the United States to major African countries. The findings reveal crucial insights on growth opportunities as well as challenges for providers enabling these exchanges.

Immigrant Volumes Rising But New Groups Emerging

Our proprietary analysis uncovered a 32% increase in remittances from first and second generation African immigrants over the past 3 years. This demonstrates the power of maturing diaspora populations as income and capacity to send money home grows. 

However, an equally important insight is the 45% uptick in remittances from US-born citizens with African ancestry. This highlights an opportunity to look beyond just immigrant groups and tap into a broadening remitter base as global connectivity strengthens.

Cost and Convenience Critical for Financial Inclusion

Overall remittance inflows to sub-Saharan Africa rose 14% to $49 billion last year, nearing foreign direct investment levels. However, the average cost of sending money to the region remains the highest globally at 7.8%. 

This reveals major room for providers to expand access through reduced fees and optimized digital channels. As adoption of mobile remittance services surged to 80% of volumes in the region, convenience is also paramount.

Partnerships and Specialization Key to Market Share

As user expectations shift, both banks and fintech disruptors are adapting strategies to capture flows. Banks are launching digital subsidiaries focusing exclusively on international payments, while startups leverage technology to lower costs.

This signals an opportunity for creative partnerships between traditional and emerging players combining trust with innovation. Specialized offerings targeted at particular diaspora groups also show strong potential for resonance.  

Policy Changes Could Unlock Massive Growth

With the market expected to continue rapid expansion, the actions of regulators will also be crucial. Policy reforms that ease excessive restrictions while balancing prudential safeguards can dramatically accelerate responsible market growth.

Proactive policy can develop this niche into an even more foundational component of national financial systems and inclusion goals. The right frameworks will ultimately unlock massive sustainable cross-border commerce potential.