Faster, fit-for-purpose and fraud-proof: Digitalizing financial aid distribution
Financial services and public sector development organisations are turning to innovative technology to secure access to financial aid.
regional head, Europe, public sector and development organisations, Standard Chartered
The Meheba Refugee Camp in north-western Zambia is home to 12,000 refugees , each of whom rely on money from international aid organizations to survive. Not long ago, these funds took up to 10 days to reach the refugees’ pockets. Today, they can arrive within an hour.
This change reflects a larger transformation in how aid is delivered globally. Nearly one-third of the world’s poorest people  live in countries that experience regular humanitarian crises such as natural disaster, disease and displacement by armed conflicts. Often, the first aid to arrive is physical: food, blankets, medicine and other emergency supplies. While this is vital to save lives at the beginning of a humanitarian crisis, the need soon shifts to financial aid in order to sustain them.
Physical to financial aid
That reality is reflected in the data. In 2018, total international humanitarian funding reached $28.9 billion, up an estimated 30% ($6.7 billion) since 2014. The enduring challenge, however, has been distributing those funds safely, on time and to the right people. In regions suffering humanitarian crises, physical transportation infrastructure is often limited or even non-existent. Where it does exist, usage costs ‒ including security arrangements in some cases ‒ can make the cost prohibitively high.
The benefits are enormous when aid is delivered and disbursed in an efficient and timely manner. Financial stability and independence start to take hold, and consumer spending patterns emerge. As local economies experience growth, new job opportunities arise. Over time, a helpful development cycle can emerge.
To overcome the challenges of aid delivery, many development organizations have begun relying on mobile money, prepaid cards, e-vouchers and digital wallet solutions. Standard Chartered plays a key role in this, working with aid organizations, public sector bodies and development agencies to provide financial infrastructure such as cash management, payments and foreign exchange services.
Standard Chartered has also beefed up its ability to accelerate the speed and ease of aid distribution in crisis situations by enabling expedited account opening and securing priority access to funding. The bank also offers a blockchain-based cross-border wallet remittance service in partnership with Ant Financial. Using AlipayHK in Hong Kong and GCash in the Philippines, this service enables Filipino workers in Hong Kong to send money back home in real time, providing a convenient, secure and affordable way for overseas Filipino foreign workers to support families in need back home.
Financial inclusion and financial controls
Standard Chartered sees an opportunity to do even more. Already, the bank has rolled out mobile money solutions in more than 10 markets that are home to vulnerable communities. So long as the telecoms infrastructure supports this digital initiative, further expansion is planned.
In Zambia’s Meheba Refugee Camp, a vast area spread across nearly 700 square kilometres, a Standard Chartered mobile money solution is enabling the rapid disbursement of cash to the refugees. This solution – jointly developed by the bank and the United Nations High Commissioner for Refugees (UNHCR) – was awarded the 2018 Banker Magazine Bank of the Year Award for Financial Inclusion.
The UNHCR pays a monthly physical cash stipend to each household in the camp, and prior to the rollout of the mobile money solution, refugees travelled to regional distribution centres to receive the funds. Once there, they would queue for up to 10 days before receiving the money, preventing them from engaging in more productive economic activities. At the same time, the large volume of cash payments proved extremely difficult to accurately audit, raising governance challenges around the process.
To address this, Standard Chartered began working with mobile money partners to distribute SIM cards and register eligible beneficiaries for mobile money. Under this programme, UNHCR pays stipends directly to beneficiaries through Standard Chartered’s Straight2Bank Wallet platform. Payments can now happen in a flash and can be easily and fully audited. Refugees, instead of having to queue for days on end, now receive their funds within an hour.
Balancing risk, regulation and need
Although mobile money and other digital cash solutions are increasingly prevalent, gaps remain, especially in high-risk countries where international banks are unable to operate directly. Through digitization and partnerships, Standard Chartered is helping to meet urgent humanitarian needs whilst strictly adhering to international sanctions and regulatory requirements, as well as donor needs for transparency and accountability.
In Somalia, Standard Chartered has a long-term partnership with Al Amal Express Exchange to disburse funds for the humanitarian sector. For this high-risk country, the bank has created a cash disbursement transaction model for its development organization clients. This is fully supported in the bank’s systems, processes and controls – including sanctions screening.
Successfully screened transactions are transmitted to the bank’s local service provider Al Amal Express Exchange through an application programming interface (API). Funds are distributed to beneficiaries, and payment status data is returned for automatic confirmation and reconciliation, giving users full visibility over the end receipt of funds.
Standard Chartered’s mobile cash payment services are being used by development organizations around the world. ChildFund, a charity that helps deprived and vulnerable children through sponsorship programmes, uses the bank’s Straight2Bank Wallet service to deliver funds to the charity’s vendors and staff, to support beneficiaries directly. Jhpiego, a charity affiliated with John Hopkins University and dedicated to mother and child health, is using Straight2Bank Wallet to instantly disburse cash to beneficiaries in Kenya.
The bank’s regulatory, operational and technological expertise – coupled with on-the-ground knowledge across developing and frontier markets – have been instrumental in helping development organizations meet their humanitarian objectives. The result? Secure, timely and transparent aid delivery solutions, helping vulnerable people gain a new measure of financial independence and supporting the welfare of vulnerable communities.
 United Nations High Commissioner for Refugees (UNHCR), Meheba Refugee Settlement Profile, 30 November 2018.
 Global Humanitarian Assistance, Key trends in global humanitarian assistance 2019, extreme poverty defined as those living on less than $1.90 per day, page 1, para 1.
 Global Humanitarian Assistance, Key trends in global humanitarian assistance 2019, page 1, para 3.
 We have been appointed by Ant Financial as core partner bank for its new blockchain cross-border remittance service, Standard Chartered press release, 25 June 2018.
 Finextra.com, ChildFund to utilise Standard Chartered Straight2Bank wallet service, 03 November 2014.
 Business Chief, Straight2Bank: the mobile banking solution driving growth in the developing world, 15 June 2018.
About the Authors
Karby Leggett, Global Head of Public Sector and Development Organisations, Standard Chartered
Based in Singapore, Karby became the Head of our Public Sector and Development Organisation (PSDO) team in June 2019, responsible for the Bank’s coverage of Ministries of Finance, Central Banks, Development Organisations and other Government related institutions across our global footprint. He was previously the Head of the Asia PSDO Business. Prior to his expanded role, Karby ran the Capital Markets business in the Greater China & North East Asia region. Before joining Standard Chartered, Karby worked at Goldman Sachs where he oversaw the firm’s Europe, Middle East and Africa sovereign ratings advisory and risk management. Karby has over 20 years of experience in capital markets, finance, risk management and sovereign ratings advisory and international affairs including a decade during which he worked as a foreign correspondent for The Wall Street Journal. Karby has lived in China, Korea, Japan and the Middle East, and speaks fluent Mandarin.
Katharine Steger – Regional Head, Europe, Public Sector and Development Organisations, Standard Chartered
Based in London, Katharine is European Head of Public Sector and Development Organisations client coverage, responsible for relationships with clients including sovereigns, quasi-sovereigns, central banks, public pension funds, supranationals, microfinance institutions, humanitarian and development agencies and NGOs.
Previously Katharine had a global remit in Standard Chartered’s Public Sector and Development Organisations team. Operating as COO for the segment, she worked on strategy, risk management and thematic issues, with focus areas including blended finance, microfinance and development priorities. She also managed European client relationships, predominantly sovereigns, development organisations and NGOs.
In prior roles Katharine was Deputy Chief of Staff for the Group Chief Executive, responsible for external affairs; managed Standard Chartered’s relationships with international organisations, policy engagement and thought leadership platforms, building the Bank’s profile among decision makers and opinion leaders; and prior to that had a number of roles focussed on environmental finance & management, sustainability and project management.
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