In the last few blog posts we’ve mentioned seeing a 20 to 24 percent increase in cash since the beginning of the COVID-19 pandemic, and there plenty of articles from outlets like Forbes and BankRate.com that are reporting similar numbers. Most FIs are just hoarding the cash, even though cash demand has been lower than normal after the initial spike 3 months ago when the pandemic started. Today, we want to discuss how banks and credit unions can find out their actual current cash demand and usage. This is more important than ever right now because we have learned that the old ways of ordering cash are not reliable during this unprecedented time. No longer will gut feelings and old spreadsheets work, and just because we’ve seen an overall increase in cash demand doesn’t mean that you should just up your orders by 20 percent. There are a lot of important factors to consider including branch locations, and actual cash usage down to the denomination.
Understanding current demand right now is complex, and it will continue to be a challenge in the future. As of right now, most banks and credit unions do not have the tools, reporting, or resources in place to truly understand what their daily demand in usage is. It is important to remember that daily demand today will be different than one year from today. Financial institutions must not get trapped in the fallacy of holding cash levels steady year over year or quarter over quarter, but should proactively adjust cash levels to meet growth, seasonal trends, and even pandemics or other unpredictable events that affect our economy.
The best way to understand your actual current cash demand and usage right now is to invest in a branch, ATM, ITM, vault and device cash inventory management software that easily provides visibility into actual demand and usage, but also visibility into the entire cash supply chain. We previously wrote a post on the top five features to look for in a branch cash management software that we encourage you to check it out here, but here’s a quick list of what to look for:
- Track denominations and cash levels across the entire branch and ATM/ITM/Device network
- Collect and analyze data on cash usage relative to historical pattern
- Predict denomination needs based on statistical modeling, the branch’s actual cash replenishment cycles and demand volatility
- Incorporate staff members’ knowledge and experience
- Integrate with other cash vendors and software like armored car carries and money suppliers
To learn more, register for our on-demand webinar “Crisis Management and CASH: COVID-19 & Future Pandemic Planning” by clicking on the button below. This webinar is in partnership with Loomis and provides a more in-depth look into pandemic planning guidelines, new regulatory changes and reviews effective ways to address the current cash management challenges to keep your financial institution's cash operations running efficiently.
To learn more, register for our on-demand webinar “Crisis Management and CASH: COVID-19 & Future Pandemic Planning” by clicking on the button below. This webinar is in partnership with Loomis and we will be providing a more in-depth look into pandemic planning guidelines, new regulatory changes and review effective ways to address the current cash management challenges to keep your financial institution's cash operations running efficiently.