The currency processing outsource bandwagon seems to be picking up speed – again – in North America. Recent news that Bank of America and CapitalOne have made the decision to move to currency processing outsource solutions has many other financial institutions considering the option. This trend begs the question, what is the best currency processing outsource option? In our experience, there are four to choose from:
Correspondent banking services – this option is sometimes considered the best for very small financial institutions who are challenged both by size and geographic remoteness. In this scenario, small financial institution outsources their currency processing to a much larger institution who has both the necessaryÂ infrastructureÂ andÂ geographicÂ diversity. A credible example of this type of service in the USA is Wells Fargo Correspondent Banking
Cash-In-Transit – this option sometimes appears to be the most logical as it combines both currency processing outsourcing and transportation. In this scenario a financial institution contracts with one or more cash-in-transit companies to provide “full service” currency handling. Credible global examples of this type of service is G4SÂ or Brinks
Currency Services – this option does not include transportation but offers the advantage of a suite of currency related services including ATM reconciliation, items processing, treasury processing, cash forecasting, image capture, deposit processing, etc..Â A credible example of this type of service in Canada is INTRIA Items Inc.
Industry Cooperative – this is likely the least well known, but arguably the most sustainable. In this scenario a group of financial institutions form a not-for-profit cooperative and operate cash processing centres jointly, sharing cost and ancillary services contracts, such as transportation.Â A credible example of this type of service in Australia is Cash Services Australia
It is fair to say that not every financial institution has the opportunity to choose from all of these options. In many countries only one or two of these options exist. In some countries none of these options are available, which is usually a fact of regulatory restriction. In countries where more than one option exists it is often difficult to determine which is the best choice. In these situations engaging the services of an unbiased third-party consultant can often help avoid costly and restrictive mistakes.We are aware of a number of credible consulting companies who specialize in this type of service. Among them are Secura Monde International, Currency Research and KPMG.
While Counting On Currency does not advocate any one option of currency processing outsource, we do strongly recommend making a thoughtful, informed and un-emotional decision. If currency processing outsource is being seriously considered, the best recommendation we can make is to secure the services of a credibleÂ independentÂ third-party to assist with making the right decision. A more complete list of currency consultancies can be found on our Industry Links page. We believe that these consultants will not “borrow your watch to tell you the time“!