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ATM Cash Management: Driving more profitability from the same business Presented by: Mike Plante, Head of Business Development Daniel Cramer, Senior Analyst Slide 2 Presentation Overview Presented by: Mike Plante, Head of Business Development Daniel Cramer, Senior Analyst 1) Introduction 2) Cash Management Cycle 3) Case Study: Bank 4) Case Study: Independent ATM Deployer 5) Key Points Slide 3 Introduction Slide 4 1991 CMS was founded CMS manage sites across 28 Countries Skilled team of consultants & mathematicians Industries we work with 20,000 Sites managed including FX bureaux, ATMs, vaults, banks & shops. ATMs Foreign Currency Financial Institutions Vaults $56BN Cash ordered/sold by our systems every year About CMS Slide 5 Cash management will be the single biggest impact you can have on your business in 2015. Introduction EMV Operation Choke Point Supply Chain Constraints Interest Rates DCC Revenue Phone Card Revenue Cash Management Savings Slide 6 ATM Fixed Costs Equipment & Software Insurance Maintenance Processing Fees Staff Security Rent UtilitiesComms Intelligent cash management allows you to turn your cash supply chain into a variable cost. Cash Management? Slide 7 Comparing costs against your peers isnt the right way to benchmark your business Industry Benchmarking Gain a competitive advantage Slide 8 Cash Cycle Management Slide 9 Traditional approach Cash Cycle Management Forecasting Slide 10 Bank Cash Center Replenishment ATM Residual Cash Center Cash Cycle Management Slide 11 Cassette management Lead time analysis Rebanking targets Residual costs Forecasting Bank Cash Center Replenishment ATM Residual Cash Center Forecasting Slide 12 Global withdrawal limits Lead timesCash costs Bank Cash Center Replenishment ATM Residual Cash Center Forecasting Slide 13 Lead timesRecycling Emergency cash replenishments policy Depot-by-depot performance levels Service level agreements Cash Center Depot-by-Depot Performance Depot-by-depot performance levels Bank Cash Center Replenishment ATM Residual Cash Center Forecasting Slide 14 Simulations to optimize schedules Time windowsPrices per visitRoute management Performance management Replenishment Single ATM Schedule Comparison Schedule Options Simulations to optimize schedules Bank Cash Center Replenishment ATM Residual Cash Center Forecasting Slide 15 Proximity to alternatives Risk policy Denomination profile Capacity Availability levelsVolatility of demand Type of ATM/site ATM Bank Cash Center Replenishment ATM Residual Cash Center Forecasting Slide 16 Price per visit Collection profiles ATM balance Residual Bank Cash Center Replenishment ATM Residual Cash Center Forecasting Residual analysis Example Residuals Reduction Residual analysis Slide 17 Cost of residuals Lead time analysis Reconciliation Cassette management/auditing Cash Center Bank Cash Center Replenishment ATM Residual Cash Center Forecasting Slide 18 Bank Cash Center Replenishment ATM Residual Cash Center Forecasting Areas of Control Slide 19 Case Study: Bank Slide 20 Mid-sized US bank Fully outsourced armored transport (multiple carriers) Internal cash management solution in place The Business High transport costs - Current solution does not seek out cost savings and efficiencies. The Challenges Slide 21 Case Study: Bank Scheduling Improvements Simulate and model scheduling options Simulate Cross-reference scheduling options with demand Demand Rank options by cost Rank Work with armored carriers to implement most efficient option Armored Carriers Slide 22 Case Study: Bank Intelligent Scheduling Scheduling in line with demand Reduce bandwidth issuesImprove delivery success rates Slide 23 Case Study: Bank Outcomes Balance reductions of 30.5% Total supply chain cost savings of 27.8% Increased profitability of operation Slide 24 Case Study: Bank Monitoring Intelligent scheduling is a continuous process Evolving simulations for changing demand profiles and constraints Armored transport monitoring and reaction. Depot and route service level monitoring Slide 25 Case Study: Independent ATM Deployer Slide 26 Case Study: IAD 100 ATMs Internal Armored Transport Limited Cash Supply Cost of Cash: 10% The Business Wanted to reduce costs, grow network without extending line of credit and increasing staff levels The Challenges Slide 27 Case Study: IAD Forecasting Bank Cash Center Replenishment ATM Residual Cash Center The Before and After of Supply Chain Optimization Slide 28 Case Study: IAD Forecasting Bank Cash Center Replenishment ATM Residual Cash Center Forecasting Forecasting the day before Before Daily reforecasting to monitor demand After Balance Reductions Cost Savings: All Supply Chain Costs Impact Slide 29 Case Study: IAD Forecasting Bank Cash Center Replenishment ATM Residual Cash Center Bank Going multiple times a week wasting time and money Before Designated days with optimized withdrawal amounts After Efficiency Increases Cost Savings: Note Supply Impact Slide 30 Case Study: IAD Forecasting Bank Cash Center Replenishment ATM Residual Cash Center Excessive amounts withdrawn and lack of robust processes Before Excess reduced; Process implemented After Balance Reductions | Time Savings Cost Savings: All Supply Chain Costs Impact Slide 31 Case Study: IAD Forecasting Bank Cash Center Replenishment ATM Residual Cash Center Replenishment No clear indication of when the next replenishment would take place Before Replenishment on optimum route and with more advanced notice After Efficiency Increases Cost Savings: Armored Transport Impact Slide 32 Case Study: IAD Forecasting Bank Cash Center Replenishment ATM Residual Cash Center ATM Excess cash in ATM High average balance Before ATM average balance reduced After Balance Reductions Cost Savings: Interest & Insurance Impact Slide 33 Case Study: IAD Forecasting Bank Cash Center Replenishment ATM Residual Cash Center Residual Excessive residuals Before Optimized residuals for each ATM After Balance Reductions Cost Savings: Banking & Interest Impact Slide 34 Case Study: IAD Forecasting Bank Cash Center Replenishment ATM Residual Cash Center Lack of accurate reconciliation process Before Robust and transparent reconciliation process After Time Savings Efficiency Increases Impact Slide 35 Case Study: IAD Pre cash managementPost cash managementSavings (%)Reductions Balances$848,908$543,30036%$305,607 Costs$141,227$91,51235%$49,715 Loads5,5643,67234%1,892 Balances Balance reductions of 36.0% Costs Cost savings of 35.2% Efficiency Load reductions of 34.0% Slide 36 Optimization = A Platform for Growth Slide 37 An efficient cash cycle will enable network growth within existing constraints Platform for Growth Cash Resource Additional capital for 49 ATMs Slide 38 An efficient cash cycle will enable network growth within existing constraints Platform for Growth Armored Transport Constraint Optimized replenishment schedule allowing bandwidth for 45 ATMs Slide 39 Stress-testing for the impact of interest rate rises should be a priority Interest Rates Slide 40 Stress-testing for the impact of interest rate rises should be a priority Interest Rates Slide 41 Stress-testing for the impact of interest rate rises should be a priority Interest Rates Potential savings of $250,000 Slide 42 Key Points to Take Away Slide 43 Create individual profiles for each machine in your network Use simulation techniques to stress test your supply chain Cash management should be one of the key driver s for profitability! Cash management is far more than forecasting. Look at each element in isolation Slide 44 Thank You If you would like to speak to CMS about this presentation or about the Free CMS Cost of Cash Audit, please contact Mike Plante, Head of Business Development: UK t. +44 (0) 1925 420 781 mplante@cashmanagement.co.uk www.cashmanagement.co.uk US t. +1 312-288-8431 mplante@cms-cashmanagement.com www.cms-cashmanagement.com