logicpath Blog | Whoknew

Are We There Yet?? A Dodd-Frank Deregulation Update

Apr 5, 2018 | Kelly MacConnell

Update: Are we there yet? On March 14, 2018, the Senate passed a bipartisan measure to exempt dozens of small community and regional banks and credit unions from the Dodd-Frank Wall Street reform law enacted in 2010. The bill, which recognizes that smaller financial institutions are disproportionately burdened by regulatory demands, now moves to the House of Representatives, where it faces a tougher approval battle because conservatives believe the Senate version doesn’t go far enough in disman...

Topics: Dodd Frank

When Should I Implement Deposit Reclassification?

Mar 29, 2018 | Meghan Quinlin

Deposit Reclassification, commonly called a retail sweep program, helps banks and credit unions reduce and even eliminate reserve balances; allowing them to deploy the freed-up funds for profitable lending and investment purposes. A bank or credit union’s motivation to implement deposit reclassification depends on costs versus benefits. Implementing Deposit Reclassification makes sense at all times, but is even more important when interest rates are rising and expected to continue to rise, whe...

Topics: Deposit Reclassification, Federal Reserve Balance

Deposit Reclassification vs. other Retail Sweep Programs

Mar 22, 2018 | Kelly MacConnell

A Comparison of Deposit Reclassification and the core providers’ Retail Sweep Programs Deposit Reclassification, commonly referred to as retail sweep programs, help banks and credit unions recover their Federal Reserve balances due to reserve requirements and quickly improve profitability. These programs reduce reserve requirements to the point where in most cases, they can be met with vault cash alone, without parking funds at the Fed. Financial Institutions can then invest these freed-up fund...

Topics: Deposit Reclassification, Retail Sweep Program

5 Warning Signs of Poor Branch Cash Management

Mar 15, 2018 | logicpath

Most retail operations and branch managers at banks and credit unions believe that they are doing a good job of managing cash. While they may admit to some room for improvement (nobody’s perfect, right?!), many don’t believe that tweaking their branch cash management practices would significantly improve the branch’s operations or profitability. As a result, many branches operate under the myth that they are doing a good job of managing cash. However, here are five warning signs that might revea...

Topics: Cash Management

3 Branch Cash Management Mistakes That You Don’t Know You’re Making

Mar 8, 2018 | Kelly MacConnell

According to the Federal Reserve Bank of San Francisco, cash is still the most frequently used retail payment instrument; used in nearly one-third of all transactions, even when other options are available. Data also shows that 89 percent of all Americans carry cash to some extent, and nearly two-thirds hold cash every day. As a result, consumers are dependent on banks and credit unions to get the cash they need for everyday spending. However, branches and ATMs do not always meet their demand fo...

Topics: Cash Management, Cash Usage

FinTechs – No Longer Competitors, but Partners

Nov 30, 2017 | Meghan Quinlin

Today, there are a slew of fresh, young financial technology firms – or FinTechs for short - that are leveraging technology, the Internet and smartphone apps to address inefficiencies across the spectrum of financial services. These FinTechs are well-financed by venture capitalists, private equity firms and forward-looking FIs (financial institutions) who see the enormous profit potential of innovation and disruption in the financial sector, and want a slice of it. So, should financial instituti...

Topics: Technology, FinTech

Jerome Powell for Federal Reserve Chair – What Does That Mean For Banking?

Nov 14, 2017 | Kelly MacConnell

On 11/2/2017, President Trump nominated Jerome Powell to be the next Chair of the Board of Governors of the Federal Reserve System, replacing incumbent Janet Yellen. Powell is widely expected to sail through Senate confirmation hearings and commence his four-year term as Chair on 2/1/2018. He is currently a member of the Board of Governors. So let’s get to know the man and predict how his tenure might impact jobs, interest rates, GDP growth, the financial markets and the banking sector.

Topics: Federal Reserve, In the News

Make Running Out of Cash a Thing of the Past

Nov 9, 2017 | Kelly MacConnell

Straps of Cash - Emergency Shipments At one point or another, most customers have probably experienced an ATM that’s out of cash, or had trouble getting the denominations they need when they visit a branch. It’s rare, but it happens from time to time at most branches, and sometimes more often than some would like to admit. Why are branches running out of certain denominations and cannot fulfill demand? How does this shortage impact the branch and its customers? What can branches do to address th...

Topics: Cash Management, Vault Cash

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Myth of Branch Cash Management: Reducing Cash equals Optimal Cash Levels

Nov 2, 2017 | Kelly MacConnell

#1 Myth of branch cash management: Reducing Cash equals Optimal Cash Levels While cash is central to banking operations, most financial institutions (FIs) carry too much of it (about 20-30% more than what they actually need) and unwittingly bear the direct and indirect costs of carrying excess cash. When banks and credit unions find out that they’re carrying too much, they often reduce their cash levels by a flat percentage across the board and assume that they’ve addressed the issue and solved ...

Topics: Branches and ATMs, Cash Limits, Cash Management, Vault Cash, Cash Usage

Top Four Underlying Costs of Branch Cash Management

Oct 26, 2017 | Teresa Romero

Cash is the lifeblood of financial institutions (FIs) and our economy, but when a bank or credit union carries it in excess, cash can end up being an idle, non-earning and deflationary asset, with a high cost of carry. While FIs strive to minimize reserve requirements, they must also optimize cash inventory levels and reduce the following four underlying costs of cash related to poor branch branch cash management and logistics: