A Penny Saved Is a Penny Earned: Currency Management Produces Cost and Operational Efficiencies

Published by: TowerGroup

Published: Jul. 14, 2008

Table of Contents

Report Coverage

The Current Cash Management Process

The Cost of Money

Deployment Strategies

Software Functionality and Vendor Overview

Summary

Abstract

TowerGroup Take-Aways

• A holistic approach to cash supply chain management is the best way to achieve cost savings and efficiencies.
• Banks need to implement a centralized authority that is responsible for enterprise-wide currency management.
• Software as a service (SaaS) and branch automation technology can facilitate currency management cost savings of up to 40% in year 1.
• A low cost of funds does not obviate the requirements for efficient currency management; rather, it compels a focus on transport and handling costs.
• Organizational complacency, not inadequate technology, is the root cause of inefficiencies in cash supply chain management.
• Institutions that demonstrate leadership will seek out and implement solutions that have the extensibility to support cross-border requirements.

Report Coverage

Finding a balance between meeting customer demand and keeping costs down is a constant challenge for any business. For financial services institutions (FSIs), the challenge applies to currency management, a critical function that is complicated by the fact that the distribution of costs across the FSI has resulted in disparate decision making for each link in the cash supply chain.

The focus of this TowerGroup Research Note is to examine why the cash supply chain is broken and what should be done to repair it. The Note identifies the challenges and the solutions to accurately manage the cash supply at the lowest possible cost while eliminating the banker's worst fear: running out of cash at the point of delivery.

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