Cash Cows

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Eyeing cash recycler machines for faster, more efficient service

By Katie Kuehner-Hebert

Cash recycler machines, souped-up ATMs that function as compact electronic vaults at teller lines or self-service kiosks, are drawing increasing attention from community banks that want to speed service and cut their retail delivery costs, according to bank retail experts. The machines can be used to replace traditional teller stations with universal tellers and self-service lobby kiosks, which in turn can free staff to sell more products and provide more complex services.

Cash recyclers, which recirculate currency and coins received and withdrawn by customers at a bank office during a business day, can reduce the need to withdraw and deposit as from the branch vault. Connected directly into branch cash-management software systems, the machines can handle bulk cash deposits and then validate and recycle notes for other customers’ withdrawals, explains Micki Nguyen, director, product marketing, cash and logistics at Fiserv Inc., a bank software and technology company in Brookfield, Wis. The company develops software for cash recycler manufacturers.

Under the right circumstances, the machines can reduce cash-handling costs within a bank and moving cash between individual branches, says Bob Meara, senior banking analyst for Celent, a technology research and consulting firm in Boston. Cash recyclers also can reduce the time required for end-of-day cash balancing. “Virtually all banks have tellers count cash twice with another person validating the count,” he says. “So moving cash is costly and it’s a good idea to automate.”

“Adding the ability to provide cash deposit and even recycling at an ATM or self-service kiosk creates a better customer experience and helps to offload cash transactions to free up branch staff,” Nguyen offers.

However, the $15,000 to $20,000 cost for a single cash recycler requires banks to analyze carefully whether purchasing these machines would save costs for a particular bank or retail location, Meara says. The business case for purchasing the machines is best for branches with lots of “buys and sells,” the times when tellers take cash out of the vault and when they put cash back into the vault.

Cash recyclers are designed to reduce the time tellers need for these internal vault transactions, making the machines best suited for branches that handle a considerable number of cash transactions. For that reason, recyclers can be particularly useful for branches that have a lot of merchant customers who make withdrawals containing a large amount of lower-denomination notes, because the same machines would likely be recycling similar cash deposits with lower-denomination notes from other merchants during a business day.

“Vendors can help banks develop business cases for recyclers on a branch-by-branch basis.”
—Bob Meara, retail consultant

Meara says some banks that install teller cash recyclers in traditional branches might deploy a recycler for every two tellers. Another approach could place a single recycler shared by all tellers in a branch. “Vendors can help banks develop business cases for recyclers on a branch-by-branch basis,” he points out.

Because cash recyclers are higher functioning but more expensive than curbside ATMs, Nguyen says, deploying cash recyclers isn’t likely to generate the efficiencies banks are looking for without developing a complete cash- management strategy for their particular retail locations. Such an analysis would determine how cash is managed to ensure machines not only minimize costs but ensure high levels of service, she says.

“Banks can expect cash inventories to fluctuate after deploying recyclers, and using solutions like cash forecasting can help branches figure out how much cash to order and have on hand,” Nguyen says.


Katie Kuehner-Hebert is a freelance financial writer in California.

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