There seems to be a recent shift in commercial cash operators approach to currencyÂ operations optimization, most notably in the North American market. Whether this will become a global trend will surely be known in the next few years as the payments industry as a whole undergoes changes as the result of more recentÂ technology shifts – like ApplePay and BitCoin.
Although the title of this article “Forecasting OutsourceÂ Currency Operations Optimization” is most obviouslyÂ a play on words, it is also makes for aÂ playful sound bite to describeÂ the new challenges and opportunities facing traditional currency processing operations. The costs, logistics and product supply/demand components of the cash cycle are undergoing market and/or technological challenges that are forcing supplier, processor, transporter and customer to rethink multiple aspects of this line-of-business. Creativity and compromise are required in equal measure and the path to acceptance has many risks.
Recently in the USA, Bank of America deftly shed the remaining operational burden of 32 cash vault operations in a facilities purchase arrangement with GardaWorld. The spoils of this 3 year outsourcing effort have been divided amongst multiple national CIT companies. GardaWorld is believed to have acquired the largest share. The resonance of this move by the largest “in-house” US commercial cash processor is felt far and wide throughout the industry.
While the physical product management arena is changing and shifting in ownership, the management of inventory is also undergoing change. Not so many years ago it was rare to find a financial institution that paid more than cursory attention to physical cash holdings much below the granularity of a regional breakdown. Those that did seemed to recognize that controlling cash holdings might benefit other areas of the operation, but getting cross-divisional attention did not seem worth the effort, in most cases. Not until regulation began to shift and global economic challenges came to bear, did conditions shift significantly enough to force a re-think. It is now increasingly more common to find financial institutions that use software drivenÂ currency operations optimization solutions at a very granular level to monitor and optimize inventories in individual ATM’s, Recyclers, Dispensers, Branches, and both physical and virtual cash vaults. Even in an environment of historically low interest rates these operators have found ways to squeeze more opportunity from more tightly controlled assets.
The sure indicator of these trendsÂ are the renewed and expanded marketing efforts of both CIT and Forecasting & OptimizationÂ Software companies. If ever one is curious about the direction the industry is being pushed or pulled at any given time, one need only attend two or three conferences within a year in order toÂ determine which vendor segments are well represented and most professionally offered for consideration. At the moment and predominantly in North America, those vendor segments appear to beÂ CIT and CashÂ Forecasting & Optimization.