Cash
Management
& Security
Banking and Financial Services
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Most readily available payment alternative
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Most used for smaller-value purchases
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Used most often in emergencies
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Increased use of cash due to ATM convenience
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Increased demand for cash in foreign countries
Purposes for Cash
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Cash dispensers
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Recyclers
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Smart-safes
Cash-Handling Devices
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Drawer that contains various denominations of cash
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Stored in the vault during non-banking hours
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Form, paper or electronic, shows beginning and ending
balance for the day
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Form also shows dollar amount of each denomination in
cash drawer at beginning and end of day
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For unbalanced cash drawer, verify if a counting error or if it
is actually short or over, then follow bank procedures
Cash Drawers
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12th District Cash Operations responsible for procedures to
process currency and coins to the banks and financial
institutions in the largest of the 12 districts that make up
the Federal Reserve
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12th District covers 35% of the country
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High-speed sorting and processing of the currency
Federal Reserve’s Role in Cash
Management
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Public
withdraws cash
from a bank.
If needed, banks
make loans for
cash from the
Federal Reserve
Banks receive
deposits from
customers
Excess cash is
deposited at the
Federal Reserve
Federal Reserve
checks currency
for “fitness” and
removes “unfit”
currency.
Flowchart of Cash Circulation
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Cash that has outlived its useful life, for exampleDenomination
Useful Life (in Years)
$1
5.9
$100
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Damaged currency
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Worn currency
Destroyed by the
Federal Reserve
Turned over to the Secret
Service for investigating
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Possible counterfeit cash
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Partially destroyed notes can be exchanged by the Treasury
Types of “Unfit” Cash
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Two divisions of the Treasury
– The U. S. Bureau of Printing and Engraving
• Prints currency
– The United States Mint
• Prints coins
Who Creates the Cash?
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Watermark – appears when held up to the light
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Color-shifting ink – changes at different angles
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Low-vision features – larger numbers
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Fine-line printing patterns – difficult to copy or scan
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Enlarged off-center portrait – more room for security
threads
Security Features of Cash
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U. S. Treasury ships currency notes to the Federal Reserve
banks, which pay the Fed the cost of shipping
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The Treasury delivers coins from the mint to Federal
Reserve banks in armored cars
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The banks pay the Fed for the face value of the coins
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The Fed can make arrangements for banks to buy coins
from banks that have excess
Transport of Cash
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Bank teller – a bank employee with the most customer
interaction of any bank employee, whose main
responsibilities involve processing deposits and
withdrawals
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Organizing and balancing a cash drawer
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Counting cash
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Process deposits
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Process cash for transport
Roles of a Bank Teller Regarding
Cash Handling
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Process initial deposit for new accounts
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Assists in marketing by offering specials to customers
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Reports need for additional cash to head teller or branch
manager, so it can be ordered from the Federal Reserve
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Processes end-of-day cash to be sent to Federal Reserve by way
of armored vehicle according to procedures found at the
following web site:
http://www.frbservices.org/files/regulations/pdf/operating_cir
cular_2_cmop.pdf
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Banks need protection from
– Hackers- experts in obtaining or manipulating
computer data
– Viruses- computer infections that can spread through email and other files that are shared
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Banks can get protection from
– Firewalls- a way that a business can block unauthorized
access to its network
Online Security Measures
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Required for FDIC-insured state banks that are not
members of the Federal Reserve System
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Divided into three sections
–
–
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Security officer
Security program
Reports
Minimum Security Procedures
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Designated by the board of directors
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Develops a written security program
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Program developed within 180 days
Designation of a Security
Officer
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Procedures for safekeeping of currency
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Maintaining cameras
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Identification devices
– Serial-number bills
– Chemical or electronic devices
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Training of employees and officers
Security Program
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Testing and maintaining security devices
– Vault or safe
– Lighting system
– Alarm systems
– Tamper-resistant locks
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Factors to consider
– Costs
– Distance location is to law enforcement
– Incidence of previous crimes
Security Program (continued)
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Report annually on
– Program administration
– Program effectiveness
– Program implementation
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Report to board of directors
Security Reports
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Bank Teller Performance Evaluation Assignment #1 – Students will research
performance evaluations for bank tellers. They will create a word processing
document that contains what they think an evaluation should look like. At the very
minimum, it should include sections for customer service skills, cash handling
procedures, professionalism, and marketing efforts (such as upselling or selling
additional services). Include appropriate graphics.
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Counterfeit Money Assignment #2 – Students will go to the Secret Service website
listed in the references above and develop a step-by-step guideline regarding
counterfeit currency detection. This can be done in report form, brochure, flowchart,
or any medium as long as the procedures are thorough and complete. Include
appropriate graphics.
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Security Issues Report Assignment #3 – Students will research the amount of money
that banks lose each year due to identity theft, hacking, counterfeit money, and other
security issues. They will prepare a one-page report detailing the losses and what has
been done to alleviate these problems with security. Proper writing conventions
should be followed.
Independent Practice
Assignments
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