How to Improve Your ATM Cash Management

Modern ATMs represent a critical service offering for both on-the-go customers who rely on quick access to cash and the financial institutions that manage them. One major component in keeping customers happy is having ATMs stocked and secure to meet customer demand. However, banks and credit unions are somewhat behind when it comes to cash management and forecasting on ATMs. Most financial institutions use outdated cash ordering methods like spreadsheets or gut feelings when deciding how much cash to order for ATMs which can lead to costly residual fees and holding costs, or even ATM cash-outs. Here are ATM cash management tactics that will reduce residual fees, save employee time, and increase efficiency in your ATM operations and management.

Increase transparency

ATM management and the overall cash supply chain is often an overlooked or underappreciated area of the financial institution. However, the cash supply chain affects a diverse group of stakeholders including Operations, Risk, Treasury and Retail. While many of these groups often work in their own silos, they play a critical role in ATM management. For example, the people that forecast the loads and send the funds back to the Fed often have no idea what their Fed bill is and how much they are being charged for cross shipping. This example shows that there is limited visibility and communication between these siloed departments and that is wasting the financial institution’s money. By adopting a centralized forecasting solution, your financial institution is provided full visibility and transparency so each department in your institution is aware of each ATM’s cash position, reducing the potential for miscommunication. 

Optimize cash inventory levels

Financial institutions have varying degrees of challenges when it comes to their ATM cash inventory levels. Based on industry research, it’s common for banks to carry an average of more than 50 percent in ATM/ITM residuals. This excess cash adds up quickly across an entire bank network, and this trend is only increasing as the market continues to grow for devices. Conversely, other financial institutions run out of denominations in a device, causing emergency shipments, additional expenses, and dissatisfied customers. There’s often a fear of running out of cash, so it’s common for banks and credit unions to carry excess cash in their ATMs. Not having optimal cash levels at the right time and ATM location can negatively impact a financial institution’s efficiency in time, money and customer satisfaction.

As previously mentioned, banks and credit unions carry inventory in the form of cash yet are often antiquated in utilizing the smart tools that exist for every other industry in performing similar functions around inventory. A cloud-based cash forecasting software can help you forecast actual cash usage at each ATM. This ensures your financial institution never runs out of cash, but also isn’t keeping more than necessary in ATMs which lowers liability and decreases costly residual fees.

Stop servicing your own ATMs

An important way to improve your overall ATM cash operations is to stop servicing your own ATMs and to leave it to a skilled cash management partner that is expertly trained on keeping your ATMs maintained and secure. ATM robberies have increased in the last year, and even though your team members may be able to service your own ATMs, it doesn’t mean they should. Not only does it expose your employees and ATMs to theft, but allocating time and budget to training your employees in ATM replenishment can still lead to under-preparedness and dangerous situations, as well as waste valuable resources. By outsourcing ATM servicing to a cash handling expert, you can have peace of mind knowing your employees are safe, but it also allows them to have more time to focus on tasks that help the financial institution run more efficiently and promotes revenue growth through securing more customer depository accounts and loans.

Secure a dependable partnership

Banks and credit unions should seek out a dependable partnership to help with their ATM cash management. Not only should this partnership help you cut costs, increase efficiency and improve your bottom line, but they should be reliable and consultative. Make sure to look for cash management partners that have dedicated relationship managers and can answer your questions and provide support in real time. Another criteria to look for in a cash management partner is that they are investing in and using new technology that benefits you. If you’re looking for an ATM cash management partner, you will want to know where your cash is and when it has been delivered. Technology like Loomis’s track and trace and Loomis Direct help customers consistently know where their cash is and serves as a central customer support portal that can be accessed from anywhere. Lastly, when you’re comparing cash management providers, seek out those who have skilled in-house mechanics who don’t need third-party providers to handle fleet problems, ensuring uptime and minimizing the potential for missed stops or timeline setbacks due to equipment breakdowns.

Optimized ATM management is vital to a bank or credit union’s overall cash supply chain. By investing in technology and dependable partnerships you will have the tools you need to make strategic decisions about ATM cash and its surrounding processes.