What is Important in Cash Management?

Auriga has won the ATMIA’s cost of cash contest for the best white paper on how to improve cash management and logistics. The white paper lays out how Auriga’s WWS Cash Management solution can help banks manage their cash inventory and replenishment processes from beginning to end.

The white paper describes Auriga’s solution to managing the complexity of ATM networks and the priorities of those responsible for them. It sees reducing costs being the overall priority. The solution is designed to be used in simple or complex models, ie. with multiple vendors, multiple cash in transit (CIT) companies and pooled arrangements.

The software is based on predictive learning. 12 or more months of cash order data from individual ATMs back through branch cash depots, cash centres, cash management offices, and even stretching back to the central bank, is used. Predictive mathematical logic is used to calculate optimal cash orders. There is self-learning built into the algorithms.

The predictive modelling assesses daily data from the cash management console on the ATM and, based on historical and seasonal cash use, it ‘instructs’ the appropriate cash replenishment requirement. The modelling takes into account notified exceptional events such as public holidays or local events. The instruction is approved by the designated CIT, authorised by the cash owner and then incorporated into the operational packet of the CIT, cash centre and cash depot. Each ATM gets a specific forecast.

The quality of the cash forecasting should result in a reduction in the cost of cash handling and transportation by between 10% and 25% over an 18 month period. These reductions come from increased self-service availability and reduced warehousing of all cash points, cash procurement costs and CIT costs.

Predictive analytics anticipates cash needs, provides counting rooms with estimates of the amount of cash they will receive, increases service level quality and avoids unexpected cash outages.

Detailed tracking of orders is part of the system. Order adjustment is possible mid-order if required. The order tracking shows ATM availability both historically, in real time and it predicts future availability. The tracking is reported by the coins and notes withdrawn, loaded, deposited and recycled by branch, central cash office and counting room. It gives a clear view of ATM operations and balances for branches, orders, packages, costs, types of transfer and cash holdings.

An important part of this tracking and reporting is automated cash reconciliation. The software can be set up to apply different reconciliation rules. Should there be a mismatch, a ticket is raised with full information for investigation.

Although a marketing piece for Auriga, what the white paper does is detail what is involved in cash management and what is important to cash management organisations. Every cash management company will have their own solution with different strengths and focuses, but this is a useful description of what matters.