Comments on: Retail Currency Management – Short-term solution, long-term gain http://countingoncurrency.com/wp/2009/10/23/retail-currency-management-%e2%80%93-short-term-solution-long-term-gain/ a resource for cash supply chain management professionals Fri, 23 Jul 2010 00:12:16 +0000 hourly 1 http://wordpress.org/?v=abc By: Mike Bielamowicz http://countingoncurrency.com/wp/2009/10/23/retail-currency-management-%e2%80%93-short-term-solution-long-term-gain/comment-page-1/#comment-88 Mike Bielamowicz Sat, 24 Oct 2009 03:08:18 +0000 http://countingoncurrency.com/wp/?p=1543#comment-88 I agree that CIT participation is a gating factor, but the gating is simply one of "who gets what piece of the revenue/profit pie. The major CIT's all support these solutions today, and until recently at least one of the big 4 owned/designed/manufactured it's own RCM solution. I'm not sure I buy the 'loyalty' issue, but agree that there is extreme stickiness for the FI in the solution, particularly if the FI charges the customer inside their normal bank account fees (as opposed to an additional outside purchase item or rental/lease.) The CIT's win by gaining market share that otherwise never opens to them - creating route efficiencies, adding revenue. If they can win "remote vault" business from the bank as well, even more revenue flows their way. The big question is: can the FI's price the service such that they at least break even on the baseline costs of the service? I agree that CIT participation is a gating factor, but the gating is simply one of “who gets what piece of the revenue/profit pie. The major CIT’s all support these solutions today, and until recently at least one of the big 4 owned/designed/manufactured it’s own RCM solution.

I’m not sure I buy the ‘loyalty’ issue, but agree that there is extreme stickiness for the FI in the solution, particularly if the FI charges the customer inside their normal bank account fees (as opposed to an additional outside purchase item or rental/lease.)

The CIT’s win by gaining market share that otherwise never opens to them – creating route efficiencies, adding revenue. If they can win “remote vault” business from the bank as well, even more revenue flows their way.

The big question is: can the FI’s price the service such that they at least break even on the baseline costs of the service?

]]> By: Bob Meara http://countingoncurrency.com/wp/2009/10/23/retail-currency-management-%e2%80%93-short-term-solution-long-term-gain/comment-page-1/#comment-85 Bob Meara Fri, 23 Oct 2009 13:46:44 +0000 http://countingoncurrency.com/wp/?p=1543#comment-85 Seems to me that from the cash logistics provider level, broad-based financial institution participation is neither necessary or desirable. Once a critical mass of mid to large banks are onboard, the additional systems integration and coordination effort required to bring on additional banks see rapidly diminishing returns. Because RCM is a closed-loop service requiring cash logistics provider participation, the willingness and ability of the four primary US armored courier companies to expand financial institution participation is a gating factor. Banks simply can’t act independently as they can with most products. Seems to me that from the cash logistics provider level, broad-based financial institution participation is neither necessary or desirable.
Once a critical mass of mid to large banks are onboard, the
additional systems integration and coordination effort
required to bring on additional banks see rapidly diminishing
returns. Because RCM is a closed-loop service requiring cash
logistics provider participation, the willingness and ability of
the four primary US armored courier companies to expand
financial institution participation is a gating factor. Banks
simply can’t act independently as they can with most
products.

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