SIX TRIGGERS FOR AUTOMATING CASH MANAGEMENT

Why does a bank decide to automate cash management? Many would say that spreadsheets work adequately enough and there is no strong case for automation.

However, there are several compelling reasons for banks to choose an automated cash management solution.

Embrace productivity
Cash is still king and regardless of how much electronic payments gain share, ATM transaction volumes and values are rising. The U.S. Federal Reserve predicts that cash will grow an average of 1.7% per year from 2012 to 2022. The cost of cash remains the highest contributor to the overall running costs for the ATM channel, according to industry experts.  Manual processes, such as filling out spreadsheets and phone calls to check orders, greatly adds to the cost and increases risks. Moreover, by reducing time spent on cash ordering, it’s possible to reallocate tellers to more profitable tasks.

Improve customer experience
An ATM running out of notes is one of the biggest frustrations for consumers. Yet another one of the many benefits that a Cash Management system can bring to a Financial Institution  as it enables banks to more accurately forecast demand and respond quickly when an ATM or branch is low on cash. Moreover, a finely tuned cash optimization solution will also take into consideration the costs associated with cash distribution to ensure that even though an ATM is able to dispense, it is doing so in the most productive way, without ever leaving a customer without the ability to withdraw funds.

The most sophisticated versions will also factor in competing costs with this forecast to deliver a highly cost-optimized order schedule that balances fixed and variable costs. This combination of forecasting with cost optimization is at the heart of reducing costs, delivering a better experience.

Better visibility
Cash management solutions offer greater visibility of your branch network’s cash position day-to-day, helping cash teams to make better decisions. For example, excess cash holdings can be reduced, trimming interest losses.

In addition, third party cash in transit (CIT) costs can easily spiral if there is no clear view of this function – how do you know if drops/pickups were fulfilled? Does the invoice match the deliverables? Some banks do their own CIT – visibility of this segment means they can make decisions on routes, the number of trucks they need to invest in, staffing and so on.

More flexibility
Is your bank ready for the ‘what if’ scenario? What if the three other ATMs in the vicinity go out of service – is your cash management process ready to respond quickly enough to satisfy the increased demand?

Support branch transformation
Automated cash management is a key tool in the wider branch transformation process as it performs a vital linking role between the branch network and self-service channels as they become increasingly interconnected. Building in sophisticated reporting and ordering tools for cash is part of optimizing branch back end processes. It also means tellers are not counting, ordering and checking cash. When combined with a cash hands-free branch practice – tellers can dramatically increase overall branch productivity, leading to increased customer face-time and the freedom to perform a more gratifying value-add role within the branch.

Comply with central bank regulations
Finally, banks in some markets need to automate cash management in order to comply with regulations. For example, banks in Saudi Arabia were recently told to automate cash ordering by the central bank so it could get a firmer, more accurate picture of the retail demand for banknotes.