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TRENDS IN CURRENCY PROCESSING Best Practices for Using Technology to Improve Your Cash Logistics. HISTORY OF CURRENCY. U.S. Treasury Department’s Bureau of Engraving and Printing There are 35 million bills of all denominations produced each day,

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trends in currency processing best practices for using technology to improve your cash logistics
TRENDS IN CURRENCY PROCESSINGBest Practices for Using Technology to Improve Your Cash Logistics
slide2
HISTORY OF CURRENCY
  • 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90% of all bills are printed to replace destroyed or withdrawn

slide3
CHARACTERISTICS OF CURRENCY
  • 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

slide4
CASH IS PROBABLY NOT THE FUTURE…
  • 98% consumer adoption
  • Phone vs. wallet
  • Bitcoin-- $1.3B in 2012transactions1

1Source: bitcoin.org

slide5
BUT, IT’S NOT GOING AWAY SOON…

Currency in Circulation

Source: Federal Reserve Bank of San Francisco, 2012 Annual Report

slide6
TRENDS IN CURRENCY USE

2008

2011

Cash is used more often…

Monthly cash transactions

21%

28%

Median cash holdings

…carried around in larger amounts…

$69

$75

Median monthly cash withdrawal

…and spent faster!

$179

$220

Source: Federal Reserve Bank of Boston 2011 Survey of Consumer Payment Choice

Oliver Wyman analysis

slide7
NUMBER OF PAYMENTS BY INSTRUMENT

Source: 2010 Survey of Consumer Payment Choice

slide8

RETAIL TRENDS

Technology has made retail receivables more sophisticated

  • Debit and Credit Card Growth

Prepaid Cards

  • Emerging Mobile Payments
  • Cash
  • Prepaid

Physical handling costs

Minimal integration

Significant idle cash

Prepaid Cards

Check Imaging

Back Office Conversion

Self

Check Out

…yet retailers’ cash handling has remained mostly unchanged

slide9
INNOVATION IN CURRENCY LOGISTICS

Ledgers by hand

Drive Thru

ATM

slide10

INNOVATION?

GUNS AND WHEELS

the remote cash capture vision
THE REMOTE CASH CAPTURE VISION

Fifth Third’s Commitment to Currency Logistics

Fifth Third’s Dedication…

Fifth Third invests in a team of industry experts & changes the course of the market

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 introduces a device management strategy will revolutionize the availability of data & how the network is managed

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 develops a strong partnership with Brinks & begins to change the dynamics of the Smart Safe industry

Fifth Third develops a strategy to expand the market & address key service limitations through a managed service model

2007 2009 2011 2012 2013 2014

CPS

RCM

closed loop cash management
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
  • Deposit data is recorded and aggregated for transmission to Fifth Third Bank daily for posting to a clientsaccount.
  • Cash receipts are deposited into an on-site smart safe.
  • Cashiers collect payments throughout the course of their shift.
  • The safe contents are picked up by a courier on a prearranged schedule and transported to a secure cash processing facility.
  • Mitigate risk of fraud and theft by securing cash at the earliest opportunity.
  • Monitor cash flow activity, including deposit and change order detail by location utilizing a BAI file and Web-based reporting.

Treasury

Operations

Loss Prevention

slide13
BEST PRACTICES
  • 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
  • “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 2nd 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

1Source: http://www.oracle.com/us/industries/retail/redesign-customer-experience-wp-177586.pdf

2Source: http://faculty.chicagobooth.edu/workshops/omscience/archive/pdf/Traffic-Product.pdf

slide14
BEST PRACTICES
  • 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

  • “Employee theft represents 43% of the total retail annual loss of over $33 billion, the highest contributor to overall retail loss.”1

1. Source: http://blog.lpinnovations.com/Loss-Prevention-Leadership/bid/46024/Employee-theft-higher-in-the-United-States; 2009 National Retail Security Survey

slide15
BEST PRACTICES
  • 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

slide16
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
  • 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%(+)

Realized net impact of $2,679,400 in annual profit contribution

slide17
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
  • 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