An efficient cash management system is essential for financial institutions due to a number of reasons. Most importantly, cash management helps increase profits and cut out all unnecessary expenditures.
ATM deployers often find themselves in a bind, trying to juggle the two important aspects of cutting down costs and ensuring cash availability. Cash management solutions help find the right balance between the two sides, and promote the holistic growth of the firm, complete with satisfied customers.
When it comes to managing the cash available in their ATM networks, financial institutions are presented with a variety of cash management options to choose from. Making the right choice for the firm depends on a number of factors including the size of the company, the available resources, the priorities, etc.
Many bigger financial institutions believe themselves capable of managing their cash. So, a group of the institution’s employees will be tasked with managing their ATMs and making decisions regarding cash distribution. One of the biggest advantages of this option is the privacy it provides. The decisions taken by the firm and its plans will be contained within its premises and will not be shared with any outsiders. Those within the firm will also be made aware of what is best for the bank, unlike a complete stranger they have partnered with.
But in-house cash management comes with several issues of its own. When utilizing such a system, an employee or several employees must be relieved of their other duties, so they can give their full attention to dealing with CITs and managing ATMs. Expecting them to be responsible for various tasks at the same time could lead to decreased efficiency and more mistakes. It has been discovered that in-house cash management is significantly more expensive than other options due to its capital expenditures. The employees associated with these tasks will also lack the necessary training and skills required since their expertise lies in other fields.
Partnering with a well-reputed external firm that deals with cash management services is another popular option among financial institutions. In this case, the company no longer has to deal with the various issues associated with managing ATMs. Trained staff from the ATM service will quickly rush to the scene if an issue has been discovered.
Since this is their field of work, these companies will be aware of all the changes in regulatory policies regarding the operation of ATMs. This enables them to quickly make any upgrades or changes to the machine to ensure compliance at all times.
ATM services also provide the banks with systems that analyze historical data to make accurate predictions regarding the cash demands of each machine. The banks, with these insights, will adequately fill each ATM at regular predetermined intervals to ensure cash availability and prevent excess money in specific machines.
Outsourcing ATM cash management functions considerably helps in reducing the costs encountered by the financial institution. They will also have a single point of contact who deploys and maintains all their machines; instead of several vendors that they have to deal with.
Many firms feel reluctant to outsource tasks related to handling their cash to an external firm due to the fear of lack of control. Privacy provided by an in-house system is no longer available when partnering with an ATM service.
Cash management systems and software
Some financial institutions make the decision to develop a system in-house that can manage various activities related to the cash in their ATMs. Banks can create a system that can be extensively customized for their particular needs, but this system will need to be transformed every few years. As external factors change, the system that was developed many years ago might turn inadequate and hinder many activities. There is also the risk that the system they develop might not function as effectively as the ones developed by companies who work in this field. But this option is much less expensive when compared to the others that are available today.
Financial institutions also choose to purchase cash management solutions from external providers. Though commercially developed software is comparatively more expensive, it receives regular updates and advancements in accordance with the developments in the world.
A purchased software will enable the automation of a majority of processes associated with cash management. Institutions will only have to employ a worker to approve various processes put forth by the software. Since the software is equipped with the ability to detect anomalies, carries out constant checks and delivers regular reports, the chances of mistakes and security breaches are lowered significantly.
Some ATM deployers use a combination of both these solutions in cash management. Their cash management system will include software developed commercially and one created by their own team. Experts do not recommend such a system since it is much harder to control all the machines if they are divided between two different software. There is also a chance that while some receive the latest updates, others will lag behind. The better option would be to make use of a particular software to manage your machines and then add other machines to it as you deploy them in the future.
A competent cash management system is essential for every Financial Institution that desires growth and increased profits. Today, there are several options that ATM deployers can choose from when deciding how to manage their ATM network. Some of the most common methods include in-house cash management, outsourcing the job to an ATM service or using software that was developed either by their own team or commercially.