Commercial Cash Operations

Cash recycling has existed for many years in over-the-till transactions, but banks and retailers are increasingly interested in reducing the costs of cash logistics by recycling cash locally.

However, this poses certain questions:

• Is it cost effective for an organisation to buy cash recycling equipment itself, enabling bank branches to process cash locally or even in-machine, or does effective recycling not exist due to the imbalance of deposits and withdrawals of low and high denominations?
• Does the reduction in CIT and 3rd party cash processing costs outweigh the increased costs of funding cash stocks locally?
• Is it sensible for a bank to process cash itself or outsource it to a 3rd party cash service provider which can offer greater operating efficiencies from bulk processing, particularly one which acts on behalf of multiple banks?
• What is the regulatory position of the Central Bank for holding cash off-balance sheet?

The answer?

SMI’s consultants have many years of experience in all aspects of cash operations and are able to model different scenarios to

• allow banks and retailers to decide the most effective structure for recycling cash locally
• analyse the business case for local recycling based on an examination of the technology investment cost, and the cost of finding the cash holdings versus the reduced CIT cost
• assess the viability of local recycling taking into account such factors as the denominational balance between deposits and withdrawals so as to make local recycling a practical option, and reduce the risk of internal theft (shrinkage)
• assist the client in choosing the appropriate cash handling equipment for its needs
• advise how to make better use of cash service providers for cash recirculation requirements