Definition: Holism - the theory that whole entities, as fundamental components of reality, have an existence other than as the mere sum of their parts.

I have spent two decades marketing and implementing various components that comprise “cash management” – sorters, counters, dispensers, recyclers, vault management systems, forecasting and optimization solutions to name a few.  No matter the effectiveness of the specific component(s), the clients I have worked with have always faced a challenge that is larger than any one solution or set of solutions can resolve – the challenge of holistic cash management.  This challenge takes different forms depending on the specific need of the client – Central Banks, Commercial Banks & Credit Unions, CIT’s, Casino’s and other large cash volume retailers.  The trouble is that there are many obvious variables in each category and an equal number of less obvious or even invisible components.

Many solutions providers profess to offer “true end-to-end cash management solutions” and yet none of them (that I am aware of) consider all the moving parts of this complex challenge.  While it is true that some suppliers offer more components than others, not a one of them can truthfully say that they offer a solution for every aspect of the cash life-cycle.  Many consultants and integration specialists offer the opportunity to attempt to integrate various solutions from multiple vendors in an attempt to create the holistic solution.  Again, I have not yet seen a true end-to-end solution.  Either less obvious and invisible components are ignored because their inclusion creates levels of complexity beyond the  developers ability to incorporate them, or the developers and clients themselves are unaware of the all the variables that come into play.

Let us examine the case of Bre Bank, Poland’s third largest commercial Bank.  I recently read an article that described their efforts to find the holistic “holy grail” cash management solution (the full article can be acquired here, from Banking Technology).  The article I read describes first the Bank’s effort to find a vendor or vendors who could singularly or collectively supply an efficient and effective solution.  Their search lead them to the conclusion that such a solution could not be purchased off-the-shelf.  Their resulting decision was to embark, like many others have done in the past, on a journey to build it themselves.  Of particular interest are three core goals for the project: “(1) implementation of a sophisticated stochastic model for predicting future cash balances that allows cost optimisation, (2) the change of management mindset and intensive development of internal cooperation between corporate, retail, operations and IT necessary for successful project completion, (3) the use of purely internal resources to build the IT platform”.  They felt they were successful.  In the end they built a solution that was 98% effective (based on what measurement criteria the article neglected to say) and they built it within 6 months. While I am sure that the solution effectively managed the internal challenges of cash management for the Bank, I am equally dubious that it effectively considered two of the more obvious components – Central Bank policies and practices and CIT operations. I am sure the reader will agree that both of these external components have significant impact on cash operations, yet remain elusively outside their ability to manage consistently.  In my humble opinion, unless the Central Bank owns all the commercial banks and CIT’s within it’s borders, not one player amongst these three has a hope of coordinating the continuing cooperation of the other two such that a consistently effective solution can be realized.  The only country that I am aware of that might have a hope creating a truly holistic solution is China.  In mainland China the Central Bank owns and/or controls absolutely the operations of all commercial banks and all CIT’s.  However I am equally aware that their are forces both internal and external that are pushing to dismantle this monopoly – a reality that I fully expect will eventually come to pass.

I do not profess to know the answer to this challenge.  I do believe that if an answer exists it will only be found through the impartial and un-selfserving cooperation of all the various players.  I also believe that the realities of capitalism, free enterprise and profit-driven philosophies stand in the way of achieving such cooperation.  Although the proponents of a “cash-less society” would have us believe they hold the solution through the eventual abolition of hard currency, I believe they are simply trading the known complexities of the current system for the unknowns or a theoretical one.

Lastly, I encourage you Dear Reader to send us your comments and ideas regarding the holistic cash management challenge.