TRENDS IN CURRENCY PROCESSING
Best Practices for Using Technology to Improve Your Cash Logistics
HISTORY OF CURRENCY
U.S. Treasury Department’s Bureau of Engraving and Printing
• There are 35 million bills of all denominations produced each day,
• Rough value of daily bills produced is around $1.5 billion
• It costs approximately 8.7 cents for each bill
• 0.1% of all money in circulation is fake or around $780 million
• 90% of all bills are printed to replace destroyed or withdrawn
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CHARACTERISTICS OF CURRENCY
Several benefits of using currency include:
• Easy medium of exchange
• Tangible and easy to validate its worth – store of value
• Retains anonymity of the consumer
• Allows customers privacy of personal accounts
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CASH IS PROBABLY NOT THE FUTURE…
• 98% consumer adoption
• Phone vs. wallet
• Bitcoin-- $1.3B in
2012 transactions1
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1Source:
bitcoin.org
BUT, IT’S NOT GOING AWAY SOON…
Currency in Circulation
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Source: Federal Reserve Bank of San Francisco, 2012 Annual Report
TRENDS IN CURRENCY USE
2008
2011
Monthly cash
transactions
21%
28%
Cash is used
more often…
Median cash
holdings
$69
$75
…carried around in
larger amounts…
$179
$220
…and spent faster!
Median monthly
cash withdrawal
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Source: Federal Reserve Bank of Boston 2011 Survey of Consumer Payment Choice
Oliver Wyman analysis
NUMBER OF PAYMENTS BY INSTRUMENT
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Source: 2010 Survey of Consumer Payment Choice
RETAIL TRENDS
Technology has made retail receivables more sophisticated
…yet retailers’ cash handling has remained mostly unchanged
Emerging
Mobile
Prepaid
Payments
Debit and
Credit Card
Growth
Prepaid
CheckCards
Imaging
Back Office
Conversion
Self
Check Out
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Prepaid
Cards
Cash
Physical handling costs
Minimal integration
Significant idle cash
INNOVATION IN CURRENCY LOGISTICS
Ledgers by hand
Drive Thru
ATM
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INNOVATION?
GUNS AND WHEELS
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THE REMOTE CASH CAPTURE VISION
Fifth Third’s Commitment to Currency Logistics
Fifth Third’s
Innovation...
Fifth Third’s
Dedication…
Fifth Third’s
Vision...
Fifth Third becomes
pioneer & market leader
for providing provisional
credit in the Smart Safe
industry
Fifth Third invests in a
team of industry experts
& changes the course of
the market
Fifth Third expands its view
& commitment to the
market through it’s CPS
strategy & managed
services model
2007
2009
2011
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Fifth Third Bank | All Rights Reserved
2013
2014
CPS
RCM
Fifth Third develops
a strong
partnership with
Brinks & begins to
change the
dynamics of the
Smart Safe industry
2012
Market adoption
grows & Fifth Third
expands business
model with Garda
& Loomis. Fifth
Third captures 70%
of the provisional
credit market
Fifth Third develops
a strategy to
expand the market
& address key
service limitations
through a managed
service model
Fifth Third
introduces the
CPS10K, CPS2K &
CPS1K to address
new market
segments through a
managed services
model
Fifth Third
introduces a device
management
strategy will
revolutionize the
availability of data
& how the network
is managed
Closed Loop Cash Management
Remote Cash Capture provides daily access to cash, improves
liquidity, eases reconciliation, and reduces operating expenses,
while cash receipts physically reside in the safe
Cashiers collect
payments throughout
the course of their shift.
Deposit data is recorded
and aggregated for
transmission to Fifth Third
Bank daily for posting to a
clients account.
Cash receipts are
deposited into an
on-site smart safe.
Mitigate risk of fraud and
theft by securing cash at the
earliest opportunity.
Operations
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The safe contents are
picked up by a courier on
a prearranged schedule
and transported to a
secure cash processing
facility.
Monitor cash flow activity, including deposit
and change order detail by location utilizing
a BAI file and Web-based reporting.
Treasury
Loss Prevention
BEST PRACTICES
Focus Staff on Core Business Activities that Improve Sales
• Increase floor presence of management
• Increase throughput and sales per man hour
“If more focus was around readiness of store inventory and having the available supply for customer
demand, an increase in sales would result.”1
Utilize Cash Handling Technology
• Reduce non-service administrative labor
• Minimize cash handling redundancy
• Optimize device placement
• Create a closed loop
“Store labor is the 2nd largest expense for retailers, often accounting for 10-20% of sales and sometimes
for more than 50% of operating costs – labor planning, execution, and retail store performance.”2
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1 Source: http://www.oracle.com/us/industries/retail/redesign-customer-experience-wp-177586.pdf
2 Source: http://faculty.chicagobooth.edu/workshops/omscience/archive/pdf/Traffic-Product.pdf
BEST PRACTICES
Improve Safety and Security
• Eliminate Bank Runs
• Reduce Armored Frequency and gain
Provisional Credit
• Reduce Till Balance & Deposit Exposure
“Employee theft represents 43% of the total retail annual loss of over $33 billion, the highest
contributor to overall retail loss.”1
Reallocate or Extract Labor Cost
• Eliminate cash rooms or vaults
• Impact on front end associates
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1. Source: http://blog.lpinnovations.com/Loss-Prevention-Leadership/bid/46024/Employee-theft-higher-in-the-United-States; 2009 National Retail Security Survey
BEST PRACTICES
Increase Visibility of Cash Over (Short) Performance
• Enhance accountability
• Improve audit processes
Improve Risk Management
• Utilize time delay functionality
• Manage withdrawal limits
Reduce Operating Supplies
Eliminate Multiple Banks
Improved Reconciliation
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CURRENCY PROCESSING SOLUTIONS (CPS)
CLIENT SUCCESS – Quick Service Restaurant
Background
Results Achieved
Fifth Third partnered with
quick service restaurant
chain to deploy remote
cash capture technology
across a national footprint
• Eliminated need for bank runs, reducing labor costs by
1.13 hours per day
• Deposit prep reduction .41 hours per day
• Till reconciliation process reduced by 50%(+)
Realized net impact of $2,679,400 in annual profit contribution
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CURRENCY PROCESSING SOLUTIONS (CPS)
CLIENT SUCCESS – Big Box Retail
Background
National big box retailer
was seeking a new
approach to eliminate its
cash room and deploy its
resources toward store
sales activities
Results Achieved
• Reduced labor requirements by 6 daily hours
• Re-engineered processes with front end supervisors
• Deployed proof of concept that eliminated cash shortages
• Leveraged Series functionality for efficiencies in opening
• Developed deposit process to support register reconciliation
• Increases and Strips entered in POS prior to Recycler
• Established eFund process to ensure business continuity
• Integrated currency and coin solution
• Provided visibility to cash over (short) performance
• Returned $18,000 of vault funds per location to corporate
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