Blog: What Questions Should You Be Asking About Cash Cycle Optimization?

This post is guest authored by Dr. Joachim P. Walser, CEO and co-founder of planfocus® Software GmbH.

Meeting with customers is the most rewarding part of my work experience. I’m always fascinated to learn how financial and retail organizations develop business strategies and execute against their plans. Of course, almost everyone I meet with is involved in a “transformation journey” and some are farther along than others. Most are looking to become more efficient, save money and improve the customer experience. That’s my cue to guide the conversation toward cash cycle optimization – an industry buzzword that’s cropping up on priority lists around the world.

After all, with an estimated $5 trillion in currency changing hands around the globe, fintech and retail leaders realize that cash doesn’t appear to be going away anytime soon. According to both the European Central Bank and the U.S. Federal Reserve, nine out of 10 payment transactions are handled in cash. Additionally, between 2016 and 2021 the annual volume of ATM cash withdrawals worldwide is forecast to grow by 5% per year on average, reports Retail Banking Research. At the same time, the cost of cash is much more than meets the eye … because it’s complex and expensive to circulate. That’s why we need ways to make cash management and distribution as efficient as possible.

The key to smart cash processes

We’ve spent the last 15 years working to turn cash cycle optimization into a science. Customers typically save between 10% and 30% of tangible costs, depending on the actual organization framework conditions. For example, did you know that the simple act of replenishing currency in a cash recycler doesn’t always mean filling it up to the top? Have you ever thought about the impact interest rates have on the cost of cash, especially if you’re sitting on millions or billions in self-service machines? A tiny rate move, up or down, can actually cost you a tidy sum, as does the total cost for refill activity (security guards, armored vehicles, cash counting, etc.) every time you re-supply your fleet.

Our multi-vendor software solutions can help you:

• Optimize resources: minimize the time employees spend on repetitive cash handling tasks.
• Enhance interactions: gain time for more meaningful consumer interactions. And reduce the cost of replenishment.
• Increase satisfaction: enable more responsive service to increase consumer confidence, trust and loyalty.

Last fall we exhibited at the Americas Cash Cycle Seminar (ICCOS) event in Miami, Florida and delivered a presentation titled “The Road to a Truly Optimized Cash Cycle.” Our discussion focused on the hidden costs of cash management that could be limiting the potential to optimize branch processes and automate cash recycling. Many of the financial institutions we talked with from the U.S. expressed a huge sense of urgency to prepare for interest rate increases by the FEDs because it will mean significantly higher costs for cash in ATMs and branches. So, don’t let cash holding costs reduce your profits.

Based on the positive feedback we received in Miami, we decided to present a similar workshop at the upcoming Europe Cash Cycle Seminar in Budapest, Hungary on March 20-23.  Cash recycling devices are becoming more prominent in Europe and cash cycle optimization software is a major enabler for recycling. We’re excited to demonstrate how a True Cash Cycle Management solution can provide tangible cost savings and shorten the entire cash cycle using new, sophisticated just-in-time optimization solutions.

What’s your plan to optimize cash cycling? Let’s continue the conversation.

Dr. Joachim P. Walser is CEO and co-founder of planfocus® Software GmbH, the world’s leading provider of cash cycle optimization software. The company is headquartered in Munich, Germany and has deep expertise in the area of supply chain management and significant experience with modern cash handling systems.