Introduction
Financial institutions are organizations that constantly move and use cash flows in the economy. One of the major financial systems is MoneyGram, which allows people from all over the world to conduct different transactions. In addition, the company often introduces new technologies in fintech. Although MoneyGram’s operations positively affected the Turks and Caicos Islands’ economy, such systems may have downsides that impede growth.
History of Financial Institutions in the Turks and Caicos Islands
Two companies, Travelers Express in Minneapolis and Integrated Payment Systems Inc. in Denver, merged to establish MoneyGram International. The second-largest non-bank consumer money transfer company in the country, Integrated Payment Systems, changed its name to MoneyGram Payment Systems Inc. and went public in 1996. Before being purchased by Travelers in 1998, MoneyGram was founded as a division of Integrated Payment Systems (“MoneyGram international history,” n. d.). MoneyGram International had more than 96,000 agents worldwide by 2006, including the Asia-Pacific, Eastern Europe, and Central America (“MoneyGram international history,” n. d.). Additionally, the business has launched new services like online money transfers and bill payments.
Contributions of Financial Institutions to the Turks and Caicos Islands’ Economy
The Turks and Caicos Islands (TCI) are in Central America in the Atlantic Ocean. The financial services industry has also drawn attention to investment on the islands, particularly in more recent fields like fintech. The peak of COVID-19, which caused tourism, the primary engine of the economy, to come to an abrupt halt, made it clearer than ever before that TCI needed to diversify its economy and open up other sources of income, such as offshore businesses.
The country is actively collaborating with numerous financial institutions, including MoneyGram. Due to its cooperation with the company, TCI has located numerous offshore businesses where money can be easily transferred, which has impacted the economic growth rate. The other macroeconomic concept influenced by MoneyGram is national income. Implementing new fintech services allowed the country to locate more international companies and deal with exports. Finally, TCI has improved employment by developing fintech services and attracting young individuals. It makes the country more stable in terms of financial development.
Current Digital Advancements Transforming Financial Services
MoneyGram enables consumers to send and obtain money through a digital space for a small portion of the cost of traditional bank transfers. A much more rapid and transparent cash movement is made possible by the capacity to send payments digitally in a matter of minutes, lower transfer fees, and transparency regarding currency rates. MoneyGram has grown its business and provided services to more than 150 million people globally thanks to the ease of sending money in digital format (“MoneyGram international history,” n. d.). Therefore, its digital channel is where the firm is expanding the fastest.
Pros and Cons of Digitalizing Financial Institutions
Advantage
MoneyGram has spread around the islands and positively impacted the fintech industry for several reasons. For instance, online banking platforms process transactions more quickly. In addition, the company operates in more than 200 countries. One of the biggest advantages of MoneyGram is that it provides unrestricted access to the account.
Disadvantages
On the other hand, the fees differ from destination to destination. Bank fees can make it challenging for people to save money or make smart financial decisions. Before providing advantages, such as interest rates on loans or savings accounts. MoneyGram frequently demands a sizable upfront commitment. Hence, digital banking has both advantages and disadvantages, allowing each country to make its own decisions.
Conclusion
In summary, MoneyGram is a multinational financial institution that enables many countries to develop fintech. The Turks and Caicos Islands are not an exception; due to their well-established financial position, MoneyGram enabled the country to gain more economic independence and lower the unemployment rate. Regardless of the benefits of banking digitalization, it is still not quite secure to keep all savings online, as fraudsters may easily access and steal private data.
Reference
MoneyGram international history. (n. d.). Zippa. Web.