subject: Branch Cash Management [print this page] even in todays world which witnesses increased use of plastic currency, cash is still the most frequently used mode of payment. Cash worth the greatest value is in circulation at present. According to a report by Wincor Nixdorf, 90% of the transactions across the globe are made with cash. Therefore, financial institutions need to manage the cash flow in each of their branches on an everyday basis so that reserve requirements are met with.
Traditional Methods of Cash Management
typically, decisions on cash management were taken by the more experienced employees of a bank who would decide on the amount of cash which suffices with the requirements of the clients. Secondly, it was also done by maintaining spreadsheets. However, with manifold increase in the number of branches worldwide, it becomes difficult to manage long spreadsheets which are prone to human error as well as bound to take up too much time. This entails a necessity to initiate centralized cash management systems.
Branch Cash Management Systems
As an answer to this difficulty, software solutions companies as well as banks themselves have come up with state-of-the-art technology platforms which better maintain the cash requirements of the financial institutions through a centralized system. The Wincor Nixdorf for example provides the Cash Cycle Management TM Solutions. Similarly, Morphis comes up with the Morphis Branch Cash Management System which is an all-in-one banking solution for its currency operations. On the other hand, the Deutsche Bundesbank has its own BMS (Branch Cash Management) system.
Benefits of Branch Cash Management
Cash management and logistics cost financial institutions both time and money. It is estimated to be somewhere around US$ 300 billion each year.
1.Cost saving In this scenario, the primary aim of cash management is to reduce the cost of maintaining cost at the branches.
2.Centralize information It makes records and is a one-point access to all demand and balance information. While many banks have been successfully building their in-house solutions, these solutions are usually resource-heavy and cannot grow in capacity in the long run.
3.Centralizes expertise It helps the local branch analysts to have an overall view of cash available in the network of branches and take decisions accordingly.
4.Overhaul ordering process Many banks still place currency orders through the telephone. Through cash management system, banks are able to achieve automated ordering systems.
These are the key advantages in branch cash management systems that have made more and more financial institutions to opt for such solutions.
