The modern world is more interconnected than ever, with people frequently moving across cities, countries, and even continents in search of better opportunities. This global migration, coupled with rapid population growth, has brought immense economic benefits but also created a less visible challenge: the rise of dormant accounts.
These forgotten financial assets are accumulating in financial institutions worldwide, often left untouched as individuals move and lose track of their finances.
The Growing Impact of Population Mobility
Population growth has led to an expanding global workforce, with millions seeking employment far from their hometowns or countries of origin. According to the International Organization for Migration, over 280 million people lived outside their country of birth in 2023, a number that continues to rise. Domestic migration is also significant, with rural-to-urban movement reshaping economies and societies.
Over 280 million people lived outside their country of birth in 2023
In the process of relocation, many individuals open new bank accounts and financial products to meet local requirements, while their previous accounts are often forgotten. The hustle of moving, language barriers, or even changes in banking or financial regulations can make it difficult to maintain older accounts including financial products, turning them into dormant assets over time.
How Migration Patterns Contribute to Dormant Accounts
- Frequent Account Switching: Migrants often switch financial institutions as they move to regions where their old financial institutions have no branches or relevance. New accounts are opened to receive salaries or comply with local regulations, while previous accounts are neglected.
- Unclaimed Wages and Benefits: In cases where employees change jobs or return to their home countries, wages or retirement benefits deposited into old accounts may remain unclaimed.
- Name and Address Changes: As people move, they may fail to update their personal details with financial institutions, making it difficult for financial institutions to maintain contact. Name variations due to marriage, cultural adjustments, or clerical errors exacerbate the challenge of reconnecting people with their accounts.
- Temporary Employment: Short-term or seasonal workers, especially in industries like agriculture, construction, or tourism, often open local accounts for convenience. When their contracts end, many leave without closing these accounts, leaving small balances behind.
The Scale of the Problem
The financial impact of dormant accounts is significant. Globally, billions of dollars sit untouched in financial institutions, unclaimed by their rightful owners or heirs. In countries with high levels of migration – such as India, the Philippines, or Mexico – dormant accounts are particularly prevalent as workers move abroad or between regions within their countries.
In 2021, 76% of adults worldwide had an account with a bank or other financial institution, of which up to 26% of accounts were dormant.
Financial institutions are required by law in many jurisdictions to attempt to contact account owners, but outdated contact information and lack of global coordination make these efforts challenging. For financial institutions, managing dormant accounts also creates operational inefficiencies and compliance risks.
Technology Offers a Solution
Advances in technology and emergence of the platform like WIOLP are revolutionizing the way dormant accounts are identified and reclaimed. Artificial intelligence can analyze migration patterns, trace name variations, and cross-reference global databases to reconnect individuals with their lost assets. By streamlining the search process, these tools help individuals regain access to forgotten funds while assisting banks in managing their dormant account portfolios.
Why This Matters
Dormant accounts are not just about unclaimed money; they reflect the mobility and dynamism of the modern workforce. Addressing this issue not only returns funds to their rightful owners or heirs but also promotes financial inclusion and trust. As migration continues to shape the global economy, tackling dormant accounts will become increasingly vital.
Have you or your family moved for work in the past? You might have a dormant account waiting to be rediscovered. Start exploring today to uncover potential lost assets and reconnect with your financial history.
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