June 25, 2010

This is bonus coverage from “Recycling Cash?” in the July issue of Credit Union Management magazine.

Financial institutions are embracing cash automation systems, including cash dispenser machines, which provide a secure and efficient means for a teller to dispense cash, and cash recycling machines, designed to do everything a dispenser, plus take cash in, authenticate it, secure it and reuse it.

Credit unions find these machines support the innovative delivery of services to members, reducing or eliminating cash exposure in the retail space, reducing employee opportunity for misappropriation of funds, speeding up “routine” transactions, and reducing member exposure to potentially dangerous situations.

Dialog Tower

Cash automation featuring cash dispensing and/or recycling is also a key element of effective dialog delivery, a branch layout strategy that places a system of kiosks throughout the lobby instead of a traditional teller system. This new layout removes barriers between employees and members, encouraging more robust conversation or “dialog.” The idea behind dialog delivery is to foster relationships with members and create an environment in which they are more open to a selling proposition. As member service representatives work side by side with members on their transactions, they are able to open dialog about the credit union’s products and services.

When cash automation is applied to dialog delivery, the overall effect is a service delivery method that can greatly enhance the member experience while improving the bottom line.

For example, cash automation helps free up the member services representative. Not having to count cash several times enables the employee to speak with and cross-sell other products to the member during the transaction.

Additionally, using teller cash dispensers in the retail lobby eliminates the need to have cash drawers in the teller area, in turn reducing the security risk of having cash in the branch. Using the locked deposit boxes on these machines for cash taken in further reduces the risk. Taking it one step further, if a branch is a net receiver of cash, it may be appropriate to introduce teller cash recyclers, which take in and dispense cash from the same machine.

Cash recyclers also can reduce or eliminate cash deliveries to the branch, providing a net bottom-line impact. As an example, a LEVEL5 client in the Atlanta area indicated the price for cash shipment is $40.95 per trip with a minimum of two trips per month. This works out to an annual expense for one delivery per week of about $2,129. This price does not include the additional charges if the delivery is over the normal shipment, nor the 6.25 percent fuel surcharge.

Cash automation also eliminates any opportunity for misappropriation of funds by employees. The machines are interfaced to the teller platform system, providing an audit trail. The results of each cash transaction are captured in detail on the audit tape, which in turn relates back to a transaction on the teller system. This audit trail serves as a deterrent to employee misconduct.

Finally, Talaris, a leading manufacturer of cash automation equipment provides an example of the value of teller cash automation in a real world example:

Cash automation continues to provide a number of benefits by automating the cash handling process. When applied to the dialog delivery model, the overall effect is a service delivery method with the potential to greatly enhance the member experience while improving the bottom line.

Tommy Loo is director of business strategies for LEVEL5.