Expatriates lose billions a year to the charges associated with sending money home, but this old business model will be "disrupted" by new technology
The National Future Forum: Remittance charges will be tackled by blockchain
Money exchange companies that charge migrants and expatriate workers millions to send money home will find themselves disrupted by new technologies in the near future.
That was the assessment from Jassim Alseddiqi, chief executive of Abu Dhabi Financial Group, who was speaking at The National's Future Forum in the capital on Tuesday.
He said old business models should be challenged, and predicted that the rise of blockchain technology would greatly benefit the consumer.
Mr Alseddiqi, whose company manages $6bn in assets, said remittances are a "very inefficient system that needs to be disrupted".
Of the $613 billion (Dh2,252bn) in global remittances last year, about 7 per cent was taken by banks and agencies – that is some $50bn lost to charges and profits, he estimated.
Blockchain technology, which can facilitate secure payments, is expected to cut those costs significantly, Mr Alseddiqi said.
"Today there are a quarter of a billion [migrants] living in all different parts of the world and they send money back to their home countries.
"Blockchain, cryptocurrencies ... are all trying to tackle this issue because there's a lot of value in it. It is a very inefficient system that needs to be disrupted.
"Blockchain, in my opinion, will be the greatest technology that will decentralise and disrupt the status quo of the financial services industry," he said.
"I think in the next five,10 years or 20 years we will see central banks disappearing, because of the advances of blockchain."