Malaysia’s Automated Cash Centre Project

Yuserisal Mohd Noor, Head of Automated Cash Centre (ACC), Bank Negara Malaysia (BNM), is a professional project manager and was made responsible by BNM for its project to fully automate its cash centre. He presented at the recent Silk Road Cash & Payments conference on his work.

BNM had identified that by 2016 it would have run out of storage space. The existing site, however, did not have sufficient room to allow for additional cash processing machine capacity and storage space. The existing site was also in the middle of a town and BNM regarded this as making it vulnerable to physical attacks.

When considering its options, BNM decided that the current manual, labour-intensive processes created operational and security risks which an automated plant would significantly reduce.

Outline solution

The plan for the new operation envisaged issuing and receiving of currency to become fully automated and self-service, including storage and handling. The only processes still requiring operator input would be processing and the warehouse management system (WMS).

Banknote printers, BNM offices and financial institutions and cash in transit (CIT) companies would connect with the ACC through the loading dock, which would connect to the automated storage and retrieval system, with the capacity to store 8 billion pieces of currency, via the WMS. The cash processing machines (CPMs) would process notes and either return usable notes into the storage system or send them for shredding to the shredded banknotes disposal system.

The plan

Planning started in 2013 with implementation and construction starting two years later. Migration of operations to the new site started in 2017 and the old facility is closing in 2023.

The pre go-live work included risk assessments, industry wide testing, the development of standard operating procedures and business continuity plans, user acceptance testing and commissioning, and system and stock migration activities.

Implementation and construction included appointing consultants and contractors, construction and installation, operational and industry readiness testing and commissioning. The move to full operations started with a volume ramp up, parallel operations and then full migration.

The building cost 51% of the budget, equipment 37% and security 3%. The project came in 5% under budget.

Benefits achieved

Automation has reduced the number of people per machine from four to 1.5 (three people for two machines). Total headcount has been reduced by 54% to 67 people and security headcount by 33% to 29 staff.

Higher processing capacity has accelerated turnaround times for deposit and withdrawals. The site has storage and processing capacity for at least the next 20 years. In addition to greater physical security, banknote packages now have barcodes and RFID, allowing tracking.

Critical success factors

BNM assigned dedicated IT support to the project and set up a multi-disciplinary team to work on the project. It engaged with stakeholders early on to ensure the cash industry was aware of the planned operational and process changes. Communications across departments within BNM ensured support and a smooth transition. The plan included increasing the skills of the non-technical team in order to reduce dependence on service providers.

With the increase in digitisation, getting the cross over between Information and Operational Technology right was critical. This required early and proactive involvement of internal and external subject matter experts.

A key factor in achieving success was getting the building contractor, automation contractor and cash processing machine contractor to collaborate and act as one. There was a cooperative agreement between them to acknowledge and agree on the interdependency of their deliverables and the impact of each on the others.

The building contractor was required to provide a storage area in case of delay from the originally agreed access date.

Finally, experienced project team members who had worked on the ground throughout the project were retained until the closure of all final accounts and any outstanding issues such as defect rectifications. This validated the completeness of the work performed.