DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT

The report addresses the 'crisis in remittances' caused by bank de-risking in the UK-Somalia corridor due to AML/CFT compliance concerns. It proposes a 'third mile' risk management framework centered on a Trusted Third Party (TTP) system and a biometric registration process for recipients in Somalia. The TTP would track transactions, audit Money Service Businesses (MSBs), and assign risk ratings to transactions to provide UK settlement banks with greater confidence in the legitimacy of the funds flow. The authors suggest a six-month pilot starting in early 2015 involving 500 customers across two Somali locations.

• Remittances are critical to Somalia's economy, with an estimated US$1.3 billion sent annually by the diaspora, representing approximately 50% of the country's GNI and 80% of its investment. About 3.4 million people, or 40% of the population, depend on these funds for basic needs.
• The 'crisis in remittances' is driven by banks becoming increasingly risk-averse in fragile corridors to ensure compliance with anti-money laundering and counter financing of terrorism (AML/CFT) regulations, leading many banks to close accounts held by MSBs serving the UK-Somalia corridor.
• To manage 'last mile' risk, the report recommends a registration process where recipients are issued contactless cards by MSBs. Personal details, including photographs and biometrics, would be stored and authenticated via NFC-enabled tablets during each remittance collection.
• A Trusted Third Party (TTP) system is proposed to track transactions from the UK sender to the Somali recipient. The TTP would assign risk ratings to transactions based on the legitimacy of the individuals and the MSB's adherence to KYC/CDD best practices, rather than preventing withdrawals directly.
• The TTP would be responsible for auditing MSB KYC/CDD processes through on-site and off-site supervision, including 'secret shopper' testing, to verify the quality and veracity of customer due diligence.
• The proposed pilot should run for six months starting in the first half of 2015, involving approximately 500 customers across one urban and one semi-rural location in Somalia.
• A significant risk identified is that MSBs operate as 'closed loop' services, which may lead to under-reporting of transactions to the TTP. This could be mitigated if UK settlement banks only clear transactions recorded within the TTP system.

APA

Makin, P., Clark, D., & Lonie, S. (2015). DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT. FSD Africa. https://fsdafrica.org/wp-content/uploads/2025/05/15-01-30-Safer-Corridor-Pilot-Service-Description-Executive-Summary.pdf

Chicago

Makin, Paul, Dick Clark, and Susie Lonie. DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT. FSD Africa, 2015. https://fsdafrica.org/wp-content/uploads/2025/05/15-01-30-Safer-Corridor-Pilot-Service-Description-Executive-Summary.pdf.

Wikipedia

{{cite report |last1=Makin |first1=Paul |last2=Clark |first2=Dick |last3=Lonie |first3=Susie |title=DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT |publisher=FSD Africa |date=30 January 2015 |url=https://fsdafrica.org/wp-content/uploads/2025/05/15-01-30-Safer-Corridor-Pilot-Service-Description-Executive-Summary.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{makin2015detailed, author = {Makin, Paul and Clark, Dick and Lonie, Susie}, title = {{DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT}}, institution = {FSD Africa}, year = {2015}, month = jan, url = {https://fsdafrica.org/wp-content/uploads/2025/05/15-01-30-Safer-Corridor-Pilot-Service-Description-Executive-Summary.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }