ABA Banking Journal - August 2011 - (Page 24)

tech topics    |   cash handling Putting some new moves on “old” money Smart safes and virtual vaults enable banks to streamline that old standby: cash By LIsA vALeNtINe, cONtRIBUtING edItOR T he first use of currency dates back to 3000 B.C. in Mesopotamia and for more than 5,000 years, merchants and banks have been involved in the timeconsuming, largely manual cash logistics business. Whether or not currency will last another 5,000 years is anyone’s guess, but talk about a “cashless society” (along with the prediction for a paperless office) has ebbed as it becomes clear that cash and coin is not going away, at least not during our lifetimes. “As a society, we never sunset a payments system,” says Jim Poteet, senior vicepresident, product strategy and innovation, U.S., for Brinks. “Instead, we just keep adding new payment methods.” Poteet is right: for example, the barter system that came into existence perhaps 100,000 years ago as a way for the first homo sapiens to exchange goods and services is still in use today. In an effort to make currency management less of a profitability drain, banks began outsourcing cash and coin transportation to armored vehicle providers—“guns and trucks”— years ago. Cash logistics is a business of scale, explains Bob Meara, a senior analyst with Celent. “Cash vaults are expensive in terms of t h e bu i l d i n g and the physic a l s e c u r i t y. It’s difficult to right-size your vault,” he says. In an outsourcing arrangement, a bank contracts with a cash-in-transit (CIT) provider to handle currency processing, explains Poteet. “Banks will outsource processing work to take advantage of a variable cost model and supply chain efficiency,” says Poteet. “Banks are also attracted by the high degree of technology that a third party can provide.” Like cash, which has basically been the same for thousands of years, the CIT industry is not a glamorous or quickly changing business, notes 24  |  ABA BANKING JOURNAL  |  august 2011

Table of Contents for the Digital Edition of ABA Banking Journal - August 2011

ABA Banking Journal - August 2011
Content
Chairman’s View
Editor’s Column
The Economy
Bank Notes
ABA Community Banking
Pass the Aspirin
Tech Topics
Cover Report: Branch Banking
Branch Design Portfolio
Will Local Players Win Reverse Mortgage Turf?
Compliance Clinic
Compliance Inbox
ABA Resources
Legal Issues
First Person

ABA Banking Journal - August 2011

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