How cash recycling is boosting branch efficiency

Cash handling is a core part of a bank’s branch operations. But all the counting, recounting, checks, transit, security and other factors make it a draining task for tellers. So, it’s no surprise that finding ways to automate cash handling at self-service is key to driving important efficiency savings and boosting security.

While some may argue that rising digital transactions mean cash use is becoming obsolete, that's far from the reality. There’s still an important role for cash—whether it’s providing consumers with a simple means of payment, serving cash-heavy countries like Germany and India or providing critical access to a form of payment for underbanked populations.

The pandemic has had an interesting impact on cash trends, too. While the number of cash transactions at the ATM fell by around 60 percent in some countries, withdrawal amounts increased. And now, as the pandemic continues to dip and spike, so do cash banking patterns, increasing the complexity and costs of managing cash and ensuring customers have access to it at all times.

This is where the benefits of cash recycling really come into play, enabling deposited cash to be reused for cash withdrawals (once it’s gone through internal bill validation to ensure no counterfeits or unfit notes reenter circulation).

That’s why financial institutions (FIs) in various parts of the world are using ATMs with cash recycling capabilities, easing the costs associated with their branch management. It’s also why cash recycling is expected to see significant growth in the coming years. 

Cash recycling ATMs deliver immediate increased profitability, cost savings, better customer service and more security. But it’s the combination of this hardware with cash management software that increases operational efficiency—on average, with an integrated cash management solution, FIs can save an additional 20 percent in operational costs.

Combining cash recycling with cash management software also delivers more innovation. Modernized cash recycling ATMs can help businesses gain more revenue from a wider range of transactions, which is also a boost in customer service. They can also make it simple to provide additional services like bill payment, fund transfer, mobile phone top-up or mini-statements for customers—with forward-thinking features like contactless card readers, multi-touch and biometric capabilities.

An integrated solution offers FIs greater visibility and control to gain insights into how customers are using cash, such as how often they make deposits and withdrawals. And that makes for more efficient cash management processes within the branch.

The combined solution is an example of the innovation taking place across the self-service banking channel as a whole, which is a hugely significant trend for FIs and their customers.

• For customers, a modernized self-service channel enables them to complete tasks and transactions with maximum speed, convenience and security.
  
• For the FI, it creates modern, highly competitive and innovative self-service that drives branch transformation, brand differentiation, purpose-built branches and a more efficient operation.

Consumers place a high value on convenience, so the ability to make deposits and get cash whenever needed is always appreciated. But, during a pandemic when there’s a greater demand for self-service, convenience is something your customers expect. So, being able to count on your ATMs always being available improves your customer satisfaction.

For business banking customers, the convenience and safety of making large cash deposits at the ATM is a big advantage that helps set your bank apart from your competitors, particularly if your business customers can access these services outside of normal hours. These large deposits also help enable the cash cycle for your other customers and further reduce the need for your staff to make replenishments or CIT visits.

Banking, while there are similarities, isn’t the same in every country or region of the world—and that goes for the adoption of recycling ATMs as well. Here’s a brief look at how cash recycling is being adopted in several countries.

• Brazil: Latin America is set to increase its recycling ATMs. And Brazil, where replenishing ATMs in remote sparsely populated areas is expensive and where security is at another level it is projected to add 40,000 units over the next five years.
• Mexico: The country is expected to make a big leap into the cash recycling arena. In 2018, they only had 100 cash recycling ATMs, but advances in technology and an increase in cash deposits are adding more value to cash recycling for FIs in Mexico.
  
• Russia: The transcontinental country is poised to increase their recycling ATMs by an estimated 18,000 by 2024. While Russians have been embracing digital payments, they often still use cash to pay bills, including loan payments. So, SMEs are clamoring for automated deposits.
  
• India: FIs are beginning to expand into more rural areas—taking banking services to the 190m unbanked population. Cash recycling ATMs will help move more transactions to self-service, reducing the number of necessary branches and cutting down on CIT demands and costs in remote areas.
  
• The United States: While the U.S. has been slower than other regions to deploy cash recycling ATMs, an increase in cash deposits is also setting up the country for an increase in recycling ATMs.
  

It’s clear that cash recycling offers FIs a lot of potential benefits—from reduced costs and better security to improved branch efficiency and cash optimization. And with greater adoption around the world, FIs will need the most competitive solution that combines cash management software and cash recycling ATMs to rake in the wins—and keep them coming.