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Currency Supply Chain Optimization and Yield Management

01.26.2010
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To tie the concepts of optimization and yield together as it refers to currency we need to understand the need for money. Without some form of money we would have no way to trade. Without trade we would have no commerce and without commerce we would have no way to better our station in life. Betterment of our situation is as fundamental to the human condition as breathing – we all want to succeed and make a better life for our communities (communities of family, friends, neighbours, countrymen, etc.). Therefore the faster we can make money move the more opportunity we have to profit from that movement.

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Parting Thought on the FDIC Study….and 2009

12.21.2009

So you’ve heard me rail on about the unbanked and underbanked for the last couple of weeks and I’m not quite ready to let it go. In addition to outlining the results of the FDIC study, I’d also like to give one final thought on what we as banks do about it.

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The Underbanked – Are we making cross-selling efforts or are they just not working?

12.14.2009
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The FDIC study – take two. In my last post, I focused on the unbanked and some misconceptions about that group. Today I’d like to focus on the underbanked — those households that have a deposit account but rely on non-bank financial services. These are households that are already bank customers but are also using alternative financial services (AFS). The FDIC study provides great insight into what those AFS products are – good information for a bank that’s looking to improve cross-sales to existing clients.

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The FDIC’s New Study on the Un- and Under-banked – Will It Help or Hurt?

12.09.2009
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Last Wednesday, the FDIC released the results of the National Survey of Unbanked and Underbanked Households. The survey found that over 1 in 4 US households are unbanked or underbanked. There have always been outreach efforts by some banks to bring the unbanked into the fold. But as I’ve included unbanked information in my presentations on self-service, I’ve had some comments that these groups are not “good” bank clients so banks don’t see any need to reach out.

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Cash is Back – At Least This Year

12.04.2009

The New York Times recently published an article indicating that the percentage of people planning to use cash for holiday shopping in 2009 is up 9.2% over 2008 and this isn’t the first time we’ve heard that cash has made a comeback in 2009. But will it last? Is this a permanent philosophical and practical change? Or is cash actually experiencing death throes as debit cards, prepaid cards and contactless payments continue their steady rise?

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Overdraft Fees or ATM Fees – which would you prefer?

11.30.2009
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Following from Nicole’s post about the choices US banks are facing in their replacement of overdraft fees comes news from UK banks regarding their choice pending final court rulings on overdraft fees there. With traditional straight back and stiff upper lip, the UK banking industry is prepared to answer the demise of overdraft fees with a reinstatement of ATM fees. Said one UK banking spokesperson, “We are an industry, not a charity. People have to remember that it does not cost nothing.”.

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New Overdraft Regs Are Coming — So What Do We Do About It?

11.23.2009
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Brendan gave a great outline of the new overdraft fee regulations coming into effect in the US in 2010. Given, these are the new Fed rules and we haven’t yet heard what the damage will be from legislation pending in Congress, but at least we have something to work toward now. But what does that mean? In my estimation, banks have four options for how to address the new legislation.

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Overdraft Reform – who wins and who loses?

11.18.2009
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The news hit the wire late last week and now it is official. For those of you who don’t live in the US, a little background before we start. There has been great discussion and debate at the Federal Reserve Bank about changing some of the service fee allowances that financial institutions are allowed to levy their customers. Like other countries (Australia for one, regarding ATM interchange fees) the United States banking regulators have seen the need to start regulating how customers are charged for some of their banking services.

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The ATM, Debit & Prepaid Forum – Will the More Focused Conferences Remain a Trend?

11.16.2009

I’m a little off my blog game as I flit from conference to conference this autumn but I’m picking up lots of great information along the way. I started out a couple of weeks ago at the ATM, Debit & Prepaid Forum in Las Vegas which was very well attended. This was my first one and I have to say that it was nice to be among a group of people speaking the same language. While there, I hosted a workshop on successful deployment of self-service. I thought I would share with you a couple of key points that came out of that session.

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The Cashless Branch (continued) – Is it possible to be cashless and still make customers happy?

10.07.2009
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So how can a bank transform itself to a cashless branch without scaring away the customers that still want and need to come to the branch? Any hardware manufacturer will be happy to tell you how as it relates to the layout and functionality. But the key question is how to do it in such a way that the branch is more profitable and the customers are not alienated.

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if the recession is over can we go back to normal?

10.01.2009

I have heard and seen editorials in the past few weeks warning of the complacency that comes with narrowly escaping an economic depression. These same editorialists are asking the same questions – mostly of our leaders – why are they not warning us of not heeding the lessons we apparently just learned. If this recession was so quick to fix (I said quick, not inexpensive), then why can’t we just continue with our cavalier ways. If it happens again the governments and central banks will just bail us out again, right?

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The Cashless Branch – Scaring the Customers or Just the Next Step?

09.29.2009

If you haven’t considered the cashless branch before, you may be asking “Why?”, quickly followed by “How?” I could do entire presentations and research notes on this topic, so I’m probably not going to do these questions justice here. But let me just hit on some highlights on the “Why” today and the “How” in my next post.

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the recession is over, now get back to work!

09.16.2009

I guess it must be official, if Ben said it. Today at 10:56:40AM Eastern Time MarketWatch started spreading the news, “Fed Chief Bernanke: The Recession is Likely Over”. Watch your words here folks, the vocabulary is littered with exception traps! Here’s another classic, directly quoted from the closing lines of their newsflash, “Bernanke noted that many economists now expect the labor market to recover slowly. But he said this was only a forecast and might be wrong”.

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is cash becoming king again?

09.09.2009

Has the consumer learned their credit-aversion lesson yet? Ask this question of any cash manager at a bank – whether in retail (Branch and ATM) or in vaults and their answer is likely to be in the affirmative. I have not heard from any of my cash management network that the demand for cash has started to fall off in recent months. In fact anecdotal evidence would seem to support the idea that we are all using our cash – and only cash – as a simple yet effective way to control our spending and consequently bolster our meager savings.

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Counting On Currency welcomes a new contributor

09.02.2009

The height of confirmation that one is doing something of meaning for a community (to me at least) is when others want to voluntarily join in to help make it even better. This small contribution to the voice of the currency community has been so confirmed – a second time! First it needs to be [...]

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defining and regulating systemically important institutions

08.12.2009

As readers will know I have noted with interest the gestation of proposed financial institution regulatory and policy changes. First was the question of Who would be made responsible; would it be just one government department?; more than one?; would non-government bodies be involved? After that question was settled we moved on to What were they going to do, to Whom and How? These are the threatening three questions that (in my humble opinion) still cause affected professionals to lose much sleep.

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authenticating currency with numbers

08.07.2009

In a past life I worked for one of the premier currency sorter manufacturers, which is primarily where I cut my teeth in this business. One of the things that impressed me then (and still does now) is the technology that goes into authenticating currency. One technology in particular that I saw as revolutionary was the ability to read the serial number of a note as it flew down a track on a sorter at something like 30 feet per second. The system not only reads the serial number but can compare it to a known database of “authentic” notes and “tracked” notes (the latter having been identified as used in criminal activity).

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bidding for my bucks

07.24.2009

Imagine my surprise (and delight at the timely irony) when I discovered the business model that is unfolding as a type of eBay for cash. In this scenario, you register an account with the likes of Licuro.com, Moneyaisle.com or Spaarbod.nl (brush up on your dutch before visiting that last site!) and put your cash up for auction.

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banking on the basics with SmartyPig

07.15.2009

There are few people in the developed world who have not been affected in some way by the economic meltdown that started in ernest last year. One of the fundamental shifts that I see occurring is the real skepticism we now approach our financial services with.

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reduce, reuse and recycle!

07.07.2009

We have all heard the litany of requests from governments, eco-agencies and individuals as they call for the mobilization of the individual to assist in making the planet a healthier place to live. So how does this apply to the currency management supply chain? Interesting question – and one that (surprisingly) has an answer.

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banks are making the move to SaaS

06.23.2009

More and more financial institutions are making the move to utilizing Software as a Service (SaaS) instead of incurring the expense and required internal effort to setup and maintain in-house software solutions. Let me point out that SaaS applications are not about to replace core banking systems anytime soon. However when it comes to managing discretionary services that are free of risk when it comes to identifying personal information (see previous post) financial institutions both large and small are now seriously considering such applications.

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the new single regulator for banks

06.17.2009

Don’t hold your breath just yet, but I think the US Administration may be getting ready to announce the new primary regulator for the banking industry – the Federal Reserve! There are also a few more moves being telegraphed ahead of tomorrow’s announcement.

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can customer data be protected?

06.16.2009

A headline from Finextra caught my attention this week – “Financial institutions have lost battle to protect customer data”. Lost the battle? As in past tense? Oh-oh!!

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banking on tomorrow in the US – sole-source policy control

06.02.2009

According to a number of stories in recent media (new an traditional) the US Treasury with support from other concerned interests is about to propose what could amount to paradigm shift for the banking industry. According to reports, Treasury Secretary Timothy Geithner and others will be sponsoring a proposal to Congress for the creation of a new government agency whose responsibility will be as the ultimate and only banking sector regulator.

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I trust my bank – then again, maybe I don’t

05.29.2009

Having made a career in sales and marketing the biggest single competitive advantage I have over the sales people with whom I compete is my trustworthiness and my credibility. Oh, there are other attributes that I believe make me effective in my career, but trust is by far the most important. I work very hard to maintain the trust and confidence of my customers and this hard work has served me well by allowing me to continue in this field where many others have withered.

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when is a note or a coin like a seat on a commercial aircraft?

05.21.2009

I could think of a few cute answers to that question, which surely would not suit this occasion. The relevant answer is that both the seat on the plane and the note/coin, cost someone more than their intrinsic value* to provide for your convenience right when you need it. In other words it is a thing of relatively high value, which we need on demand.

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making change – two dollars, twenty pesos, 300 renminbi … and swine flu?

05.06.2009

“I got it from my wallet?” – or at least what was in it. According to current research there is some possibility, within a relatively short period of time, that a flu virus could be passed from an infected person to a healthy one via common cash/currency. With the current alerts from the World Health Organization and the commonality of international travel it is no wonder that we have a growing fear that perhaps our money could make us sick.

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economic recovery – the neighborly way!

05.04.2009

Many years ago I worked in the broadcasting industry, spanning media to include both radio and television. A good friend of mine was and is the sole regional source for a smokin’ hot local market retail promotion call the 69 cent dollar. The basic concept is that a group of local retailers sells scrip in the form of a copyright protected scrip ($.069 cent dollar) for which they pay $0.69 but which is worth a full dollar at any participating retailer. In this case a focused marketing effort with creative use of radio, television and/or other guerilla media opportunities. The 69 Cent Dollar promotion is wildly successful in the right kind of market and yet sometimes delivers less benefit than expected in others. There is much science, with liberal doses of marketing voodoo that can be used to define a good target city from a bad one.

Therefore, in the category of “I’ve now almost seen it all” comes a story first passed to me by a mentoring muse and thought-provoking bon-vivant at “big-bank”. Given my past experience I can tell you with some modest amount of confidence that this “promotion” is hardly that and yet has a huge amount of potential for short-term benefit to certain communities that are faced with sector-related economic strife.

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bo knows! – banking?

04.24.2009

Athletic superstar of both the NFL and MLB Bo Jackson has decided that this is the perfect time to open a bank. Some of us on the inside might think he and his partners are crazy to try this at a time in history when US banks are as strained and constrained as they have ever been, but… it is still a question of timing.

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world currency – how about linden dollars?

04.22.2009

North America has seen its fair share of debate and argument over the years on the subject of a harmonized currency. I have yet to find anyone other than an economist that is for that idea. So much of a nations identity is defined in the color, size and design of their currency that I can’t imagine any country voluntarily disposing of their notes and coins. Until the Euro came along. Next to the US, I expected Europeans love affairs with their scrip to be so zealous that they would never consider a change – but switch they did, with only the mildest public objections.

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