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TRENDS IN CURRENCY PROCESSING Best Practices for Using Technology to Improve Your Cash Logistics.

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Presentation on theme: "TRENDS IN CURRENCY PROCESSING Best Practices for Using Technology to Improve Your Cash Logistics."— Presentation transcript:

1 TRENDS IN CURRENCY PROCESSING Best Practices for Using Technology to Improve Your Cash Logistics

2 2 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0.1% of all money in circulation is fake or around $780 million 90% of all bills are printed to replace destroyed or withdrawn HISTORY OF CURRENCY

3 3 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 CHARACTERISTICS OF CURRENCY

4 4 CASH IS PROBABLY NOT THE FUTURE… 98% consumer adoption Phone vs. wallet Bitcoin-- $1.3B in 2012 transactions 1 1 Source: bitcoin.org

5 5 BUT, IT’S NOT GOING AWAY SOON… Source: Federal Reserve Bank of San Francisco, 2012 Annual Report Currency in Circulation

6 6 Source: Federal Reserve Bank of Boston 2011 Survey of Consumer Payment Choice Oliver Wyman analysis 21%28% Cash is used more often… $69$75 …carried around in larger amounts… $179$220 …and spent faster! Monthly cash transactions Median cash holdings Median monthly cash withdrawal TRENDS IN CURRENCY USE

7 7 Source: 2010 Survey of Consumer Payment Choice NUMBER OF PAYMENTS BY INSTRUMENT

8 8 Technology has made retail receivables more sophisticated …yet retailers’ cash handling has remained mostly unchanged Prepaid Cards Back Office Conversion Cash Physical handling costs Minimal integration Significant idle cash Debit and Credit Card Growth Self Check Out Check Imaging Prepaid Emerging Mobile Payments RETAIL TRENDS

9 9 Ledgers by hand Drive Thru ATM INNOVATION IN CURRENCY LOGISTICS

10 10 GUNS AND WHEELS INNOVATION?

11 11  Fifth Third Bank | All Rights Reserved THE REMOTE CASH CAPTURE VISION Fifth Third’s Commitment to Currency Logistics Fifth Third’s Innovation... Fifth Third becomes pioneer & market leader for providing provisional credit in the Smart Safe industry Fifth Third’s Vision... Fifth Third expands its view & commitment to the market through it’s CPS strategy & managed services model Fifth Third’s Dedication… Fifth Third invests in a team of industry experts & changes the course of the market Fifth Third develops a strong partnership with Brinks & begins to change the dynamics of the Smart Safe industry Market adoption grows & Fifth Third expands business model with Garda & Loomis. Fifth Third captures 70% of the provisional credit market 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 Fifth Third develops a strategy to expand the market & address key service limitations through a managed service model RCM CPS

12 12 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. Mitigate risk of fraud and theft by securing cash at the earliest opportunity. Cash receipts are deposited into an on-site smart safe. Deposit data is recorded and aggregated for transmission to Fifth Third Bank daily for posting to a clients account. Monitor cash flow activity, including deposit and change order detail by location utilizing a BAI file and Web-based reporting. The safe contents are picked up by a courier on a prearranged schedule and transported to a secure cash processing facility. Operations Treasury Loss Prevention

13 13 Focus Staff on Core Business Activities that Improve Sales Increase floor presence of management Increase throughput and sales per man hour Utilize Cash Handling Technology Reduce non-service administrative labor Minimize cash handling redundancy Optimize device placement Create a closed loop BEST PRACTICES “If more focus was around readiness of store inventory and having the available supply for customer demand, an increase in sales would result.” 1 “Store labor is the 2 nd 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 1 Source : 2 Source:

14 14 Improve Safety and Security Eliminate Bank Runs Reduce Armored Frequency and gain Provisional Credit Reduce Till Balance & Deposit Exposure Reallocate or Extract Labor Cost Eliminate cash rooms or vaults Impact on front end associates BEST PRACTICES “Employee theft represents 43% of the total retail annual loss of over $33 billion, the highest contributor to overall retail loss.” 1 1. Source: National Retail Security Surveyhttp://blog.lpinnovations.com/Loss-Prevention-Leadership/bid/46024/Employee-theft-higher-in-the-United-States

15 15 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 BEST PRACTICES

16 16 Results Achieved 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%(+) CURRENCY PROCESSING SOLUTIONS (CPS) CLIENT SUCCESS – Quick Service Restaurant Background Fifth Third partnered with quick service restaurant chain to deploy remote cash capture technology across a national footprint Realized net impact of $2,679,400 in annual profit contribution

17 17 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 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


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