June 34, 2004 Tokyo, Japan www'amlcft'org

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June 3-4, 2004Tokyo, Japanwww.amlcft.org

• Strengthening Formal Channels II
• Developing Remittance Specific Products and
  Services
• by
• Safwan Shah, Ph.D.
• President, Infonox

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Background and domain experience (what we have
done)

• Delivery of multiple services to unbanked and
  gaming markets (money transfer, Check cashing)
• Money transfer on self service systems (ATM,
  kiosks, etc.)
• Turnkey delivery of financial services in
  multiple markets banking, gaming, retail
• Biometrics integration and identity management
• Operate infrastructure on-demand in distributed
  datacenters across US
• We are ready to rollout internationally

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Opportunities in the new world

• Formal channels need to get more aggressive
• There are gt than 40M unbanked in US
• There are much more in the rest of the world
• There is a huge market opportunity if banks are
  able to extend services to this sector
• Informal systems only exist because banks have
  not built customer relationship

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Formal Remittance Market Sizing and revenue
opportunity

• Market Statistics for money transfer
• Currently estimated to be 55 billion
• going to 100 billion by 2010
• Average Fee of 8.5
• Revenue of 4.5 billion
• could become 9 billion by 2010

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Drivers of Remittance/Money Transfer

• Increased immigration
• Global mobility
• 50 countries have 15 of population made up of
  immigrants

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Services - Why stop at money transfer?

• Other than Money Transfer there is
• Cashiers Checks/Money Order
• Enrollment, Account opening
• Plastic Card issuance
• Bill payments
• Loans
• More

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New remittance Products

• There is a huge market opportunity for the
  traditional and new players. This opportunity
  exists because
• Banks have been very slow to move
• Banks are reluctant to change
• Banks are restricted by legacy technology
  infrastructures
• Technology has been a key obstacle but
• TIMES HAVE CHANGED NOW!

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Solution strategy in age of terrorism

• Bank in a Box (creates money with footprints)
• Mobile and Nomadic bank branches
• Assisted Self service one person serves many
  and is able to collect customer data at customer
  convenience
• Automated processes help do that and then
• Use trained staff for risk and fraud detection
• This solves first (transaction origination) and
  last mile (transaction consummation) problem in
  one swoop. All intermediate steps (lifecycle) is
  managed with footprints

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Challenges and Solutions

• Connectivity
• Use existing internet infrastructure. Wireless,
  Satellite, others.
• Regulatory and Compliance
• Host/backend can provide all transactional
  footprints in online fashion
• Security
• Encrypted, message based
• Identity
• Biometrics and other means to capture sender and
  recipient
• Cost and expense
• Branch in a box can be a rich PC with
  intelligence in a host

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Next Steps

• Encourage banks to enter the market
• Educate the customers with benefits of formal
  systems
• Prove that formal systems are as reliable as
  informal systems
• Develop customer service methodologies that are
  suited to markets

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Examples in operation today

• Integrated, mobile stations that enroll and
  validate customers
• Interfaces into legacy systems used by tellers
  and cashiers
• Self Service systems for remittance (send and
  receive)
• Workflows and business logic for AML and fraud
  detection

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Contact Information Safwan Shah 2350 Mission
College Blvd 250 Santa Clara, CA 95054,
USA Email safwan_at_infonox.com Voice 1 408 507
9384 Fax [phone]