Stash. A new frontier on Cash Management

transcript

A New Frontier on Cash Management.

Introducing new methodologies to approach cash management process in Bank market, to achieve

relevant saving and first-class process optimisation.

Mr. Fabrizio MineoFounder and Chairman

Sikelia Service S.p.A.

•SAVING

•SAVING•INNOVATION

•SAVING•INNOVATION•OPTIMISATION

CASH MANAGEMENT

ACTUAL LEADING FACTORS:

• National Central Bank rules• National Central Bank interest

rate• Bank rules• Security policies• Insurance policies• Vaults and counting centers

localization• Internal• Outsourced

• Rules• Security policies• Insurance policies• CIT contract• Workflow

LEADING FACTORS UNDER BANK CONTROL:

LOOKING FOR THE RIGHT MIX

LEADING FACTORS UNDER BANK CONTROL:

• Introducing cash-in system in the branch and/or off premise

• Optimisation of cash processes given by recycler exploitation

• New services offered to retailers (e.g. department stores) based on smart safes: immediate cash crediting

NEW OPPORTUNITIES

• A deep optimisation • A new workflow• An expert system for order

generation and management to be integrated with Bank IT

• Savings

WHAT BANKS ARE LOOKING FOR

Main Banks’ targets

An innovative solution

Powered and supported by a qualified company

Easy to be integrated with Bank’s IT system

Real time data and information

Customizing by the user

Preserving the precious heritage of experience of Treasury Manager and branch operators

Powerful workflow engaging all the actors involved in the cash management process

Automatic order process based on forecast based algorithm, experience based algorithm and threshold management

Easy to integrate with the CIT information system

Management tools on Bank roles respect

Management tools on SLA respect

High save on cash management costs

Reducing explicit and hidden costs across the whole cash management chain

Cash planning and strategies depends on external economic forces (e.g. interest rates, CIT list price, internal FTE costs): a cash management solution able to automatically check any variable involved in the process is needed.

Current static approach is inefficient.

Cash management optimizationis not a standard process

SAVINGS/AUTOMATION BENEFITS COME FROM

Forecasting

Smart exception handling

Cost balancing and optimization

Dynamic cash distribution

Dynamic scenario optimization

STRENGTH WEAKNESSReducing cash transports

• Maximum CIT cost reduction

• Elimination of cash outages

• Higher risk for more cash in the branch

• Rising of insurance costs

Reducing cash levels • Less costs for idle cash• Lower risk for less cash

in the branch• Lower insurance costs

• Possible CIT rising costs

• Higher risk of cash outages

Banks’ cost reduction strategiesDynamic approach

• CIT cost optimization

• Elimination of cash outages

• Less costs for idle cash

• Lower risk for less cash in the branch

• Lower insurance costs

Banks’ cost reduction strategiesBest approach: balance!

It’s time to change

• A deep optimisation

• A new workflow

• An expert system for order generation and management

• Tailored on Banks needs

• Fast ROI

• Significant savings

… # 64 EUROPEAN BANKS ALREADY SAID “YES” AND MANY OTHERS ALREADY SIGNED AN AGREEMENT TO VALIDATE THE SOFTWARE SOLUTION BY 2015…

Does it exist a software solution with these features?

About Stash: cash management solution

• Manage all cash flows in a Bank

• Rationalize cash levels

• Optimize cash transports

• Respect Bank’s rules

• Ensure cash-point availability

• Accessible by branch, Central cashier, Supervisor and CIT

• Immediate reporting

A cash management application must have at least three features

Features 1/3: cash in real time

• Real-time balances

• Threshold alerts

• Orders

Features 1/3: cash in real time

• All note denominations

• Cassette configuration

• Counterfeit or unfit notes

Features 2/3: workflow and order processing

• Workflow for four different profiles

• Automatic order scheduling (also manual orders)

• Explicit / implicit authorization• Banknote bundling• Security and tracking• Event analysis• Integration with technical

monitoring

• Order status

• Order details

• Manual orders for integration with Central Banks

Branch balance: € 60.975Positive weight: € 0Amount needed: € 22.000Minimum threshold: 50,000 €Min amount for transport: € 20.000Delivery required: € 20.000So grouped:N° notes of € 200: 10N° notes of € 100: 40 N° notes of € 50: 200N° notes of € 20: 200

Balance ATM B4021: € 2.000Amount needed: € 1.730Min threshold: € 10,000Restock ATM: € 11,000

Features 3/3: forecasting, experience, thresholds

• Statistical functions determining the cash needed for the next working day(s)

• Functional data analysis of historical data

• Scientific approach of the algorithm to be presented at IFCS 2015 conference next July with our University partner

About forecasting algorithm

• Registering specific events• Accepting predetermined

behaviors

About experience algorithm

• Thresholds initially determined by the Bank

• Limit and guide the order generation

• Dynamic threshold adjusting

About thresholds

Case studies

Bank’s size:• almost 6,000 branches in Europe

(20 thousand cash-points)• almost 200 in Africa• 2 in America

Purposes:• rationalizing CIT costs (currently

70 million euros)• enforcing respect of Bank’s rules• improving the service for

externalized ATMs

Case study #1 – a huge international Bank

International RFP among:• 3 independent companies• 2 ATM manufacturers

Stash winner of both technical and economical evaluation

Case study #1 – a huge international BankATM balance comparison – side-effect: minimizing cash-levels

7/1/2013 8/20/2013 10/9/2013 11/28/2013 1/17/2014 3/8/2014 4/27/2014 6/16/2014 -

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

manual Linear (manual) with forecast Linear (with forecast)

Real costs Compared costs SavingsBranches 1.316.542,66 € 1.130.672,63 € 185.870,03 € 14%

Off-site ATMs 1.159.431,00 € 826.386,00 € 333.045,00 € 29%

Total 2.475.973,66 € 1.957.068,63 € 518.915,03 € 21%

Savings on counting, sorting and transport:

As it was: 2.475.973,66 € As it is: 1.957.068,63 €

Savings: 518.915,03 €, that is 21%

Comparison on 200 branches and 500 ATMs

Case study #2 – an ATM service provider

Banks’ size:• 80 Banks• 1 billion transactions per year

Purposes:• Widening their offer with a new

service• Improving the process of ATMs’

replenishment

International selection among:• 2 independent companies• 2 ATM manufacturers

Case study #2 – an ATM service provider

Case study #2 – an ATM service providerComparing one months on 1 branch: cash balances

Case study #2 – an ATM service providerComparing one months on 1 branch: costs

as it was 2/5 4/5 8/5 9/5 11/5 14/5 15/5 16/5 17/5 18/5 22/5 23/5 24/5 25/5 May

Transport 25,50 25,50 25,50 25,50 25,50 25,50 25,50 25,50 25,50 25,50 25,50 25,50 25,50 25,50 … € 433,50

Coinstransport 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,24 … € 126,30

Picked-up coins counting 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 … € 186,99

Picked-up notes counting 0,81 0,55 2,50 0,00 1,22 0,00 1,38 0,00 1,33 0,00 0,82 0,60 0,49 0,00 … € 11,29

Delivered coins counting 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,20 … € 0,20

Delivered notes counting 0,00 0,25 0,00 0,10 0,00 0,13 0,00 0,08 0,00 0,31 0,00 0,00 0,00 0,21 … € 1,28

26,31 26,29 28,00 25,60 26,72 25,63 26,88 25,58 26,83 25,81 26,32 26,10 25,99 26,15 … € 759,55

as it is 3/5 8/5 15/5 18/5 22/5 25/5 May

Transport 25,50 25,50 25,50 25,50 25,50 25,50 € 153,00

Coinstransport 0,00 0,00 0,00 0,00 0,00 0,24 € 0,24

Picked-up coins counting 0,00 0,00 0,00 0,00 0,00 0,00 € -

Picked-up notes counting 0,00 1,62 1,61 0,00 1,72 0,00 € 4,95

Delivered coins counting 0,00 0,00 0,00 0,00 0,00 0,20 € 0,20

Delivered notes counting 0,10 0,00 0,00 0,24 0,00 0,17 € 0,51

25,60 27,12 27,11 25,74 27,22 26,11 € 158,90

Saving, saving, saving...

Case study #3 – a Banks consortium

Banks’ size:• more than 100 national and

international financial institutions

• more than 3,000 cash-points• 20 million transactions per dayPurposes:• outsource the whole cash

handling process• minimizing CIT costs

International RFP among:• 2 independent companies• 1 ATM manufacturers

Comparing one month on 100 branches and 160 ATMs: cash balances

Comparing one month on 60 branches and 160 ATMs: costs

Saving, saving, saving...

Stash. A new frontier on Cash Management

Presentations & Public Speaking