Cash recycling technology and as a Service unlocks a world of improved efficiency

Published April 18, 2022


Banking has been transforming for years, but the impact of the last two years has greatly accelerated existing trends. For example, we now see more utilization of digital banking and more transactions completed at the ATM or ITM.

The banking business model is also shifting. As in all industries, financial institutions (FIs) are feeling pressure on their bottom line. There are less resources available and the need to find efficiencies across the board has become critical.  To deal with this, FIs are looking at how they can make their ATM networks work better, for less.

Enter as a Service, a more effective way of outsourcing that involves hiring a strategic partner to run, manage and operate your ATM network. For FIs, this means more efficient management of the self-service channel from end to end. Whether at the branch, off site or both, outsourcing the ATM channel in its entirety shifts  the operational support burden to a third party, freeing up your team to focus on new initiatives, build customer relationships, generate revenue, and deliver innovations that keep you ahead of your competition.

One area of the self-service channel that’s going to grow over the next few years is cash recycling. RBR predicts that more than 1.1 million recycling-capable machines will have been installed globally by 2024.

Related: National Bank of Egypt utilizes cash recycling ATMs

What is cash recycling? An NCR Explainer Video

That's around 30% of all ATMs. In some markets throughout Europe and Asia, cash recycling is a well-established part of the self-service mix. For the U.S., Canada and parts of Latin America, it’s still a fledgling technology that’s seen limited penetration — but that’s set to change.

Cash recycling technology allows FIs to optimize their cash management processes. With cash recycling ATMs, one customer’s deposited cash can be instantly withdrawn by the next customer. What’s more, internal bill validation technology recognizes counterfeit and suspect notes, as it validates each note and either siphons out any that doesn’t pass its stringent checks into a separate exception cassette or returns them to the consumer.

When it comes to supporting an FI’s objective to reducing expenditure, cash recycling can play a significant role. It can reduce the need for cash-in-transit (CIT) replenishments by as much as 50%. Additionally, demand for cash is high despite the growth of digital. In many regions, it’s even growing. Take India for example — RBR predicts a 23% rise in cash demand by 2025, and in the U.S. and Europe cash in circulation is higher than ever.

With almost $11 trillion dollars withdrawn from ATMs every year, being able to reduce the frequency of cash replenishment has a significant impact on an FI’s bottom line.

But the real value in cash recycling is found beyond the physical technology. Combining it with the right cash recycling software and support services allows you to increase your savings by as much as 70%. How? It’s simple: the cash management software lets you analyze the transactions taking place at each ATM, providing an accurate picture of current cash trends and helping you optimize your cash replenishment schedules as trends shift.

Related: How to boost customer engagement and adoption of cash recycling technology

Such insights can also help you identify the best locations for cash recycling technology as ensuring the right mix of cash in and cash out transactions is also crucial to maximizing the technology’s potential. The key is getting the balance right and ensuring predicted cash levels are optimal for the location that the ATM is deployed in. This ensures greater availability at the ATM and ultimately, a better consumer experience.

By striking the right balance of cash in and cash out, CIT requirements can be transformed from weekly to monthly, making a significant different to both the bottom line and your ESG (the new CSR — Environmental, Social & Governance) performance by removing hundreds, if not thousands, of vehicle movements a year depending on the size of your ATM network. Imagine the reduction in C02 emissions if every FI in the world adopted cash recycling across their self-service channel and reduced the number of CIT visits to the +3 million ATMs located across the globe.

But FIs can also go one step further by turning to strategic partners to take ownership of the cash recycling network. Most importantly, this allows FIs to streamline the cost of cash recycling operations — including management, cleaning, security, compliance, and cash management — into a simple monthly fee. It’s that easy.

Of course, choosing the right partner is crucial. It’s imperative to find a team with the skills, experience, people and resources to meet your needs.  But once you have this partner in place, you can focus your energies on other things that matter while the day-to-day is covered.

Cash recycling is on the rise and it being delivered via an as a Service model can help your FI reap significant and tangible benefits. What’s holding you back?

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