After an initial decrease in cash usage during the pandemic, we see worldwide that the trend is reversing and that the amount of cash being circulated through the ATM is going up in aggregate. That means cash is a mainstay as a form of payment around the globe.
But cash handling is expensive, and the costs of handling it rise with the volume of cash in circulation. As long as cash is available—whether it’s driven by consumers’ desire to pay however they want, or a response to consumer security and fraud concerns related to paying electronically, financial institutions (FIs) need to organize their cash management to keep the cash supply most efficient. In this context, the ATM remains a critical on and off-ramp for cash in circulation, since the self-service channel is the most efficient way to provide easy access to cash to consumers.
Get the most out of the self-service channel with a phased approach to optimization
Implementing self-service options is an important first step in automating processes, but to truly maximize your ROI, the real answer lies in end-to-end optimization of cash processes, something Diebold Nixdorf has helped FIs with for many years.
The first step in the
cash automation journey is teller automation with cash recycling at the teller Line. According to the British research and consulting firm RBR, Teller Cash Recyclers (TCRs) now account for almost 86% of all teller assist units and an additional 11,500 TCR units are set to be installed by 2025
1. Teller automation solutions with retail channel integration enable 90% of transactions to be automated without losing the human dimension. Counter formats from teller-operated solutions to consumer-operated solutions with teller assistance are possible.
Without a doubt, though, it’s even more efficient from a cost and availability perspective, to migrate transactions from the teller to self-service. Cash dispensers are very well accepted from a consumer standpoint and automation of withdrawals has reached globally a satisfactory level. And, ATMs enable consumer access 24/7, without the limitation of business hours.
Modern ATMs enable a stronger payment infrastructure in smaller towns and cities, as well as in emerging markets, contributing significantly to financial inclusion.
A Critical Tool on the Cash Automation Journey is Recycling Technology
The biggest lever for reducing cash management costs is the automation of cash deposit transactions, which should be a key target in your automation strategy. This can be achieved by introducing cash recycling technology. In a cash recycling scenario, your own consumers are replenishing your ATMs for free. A balance of cash-in and cash-out in a system’s closed cash cycle should lead to perfect cash management. Of course, this requires the migration of cash deposits from the counter to self-service. In fact, cash deposits make up, on average, more than 50% of the cash handling efforts in a branch and personnel expenses make up a majority of these costs.
The ratio of private to small- and medium-business (SMBs) clients has a key impact on recycling efficiency. The ratio of private to business customers usually directly correlates to the ratio of withdrawals to deposits. To benefit from a Cash Recycling System (CRS), a cash balance ratio of 70:30 to 30:70 between the number of dispensed versus deposited notes is optimal.
The migration of business customer deposits from counter to CRS is necessary in most environments to achieve the best balance. And costs for deposits at a recycling self-service system are lower than transactions conducted at the teller line. Our new DN Series enables FIs to “turn on” recycling with a software update, so your organization has the flexibility to implement recycling where and when it makes the most sense.
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