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CASH OPTIMIZATION

When considering cash optimization, the

Financial Institution usually completes a

number of phases of assessment. In most

cases, the first phase of assessment is to

determine the potential benefit from the

implementation of sophisticated forecasting and

cash supply chain management applications.

This benefit is estimated by comparing current

key performance indicators to global best

practice standards.

The simulation will show what the current cash

management levels are compared to what they

should be if an automated approach and

streamlined processes were in place. It also

indicates the margin of error in cash forecasting

and allocation compared to best practice.

To assist the with this phase of assessment, it is

proposed that we conduct an analysis of

transaction history from the ATM and Branch

network, and a quick review of cash handling

processes.

The business opportunity report offers an

excellent analysis of potential cash and related

expense reduction throughout your enterprise.

Upon completion of the analysis, we will provide

a report detailing any potential benefit that could

be achieved through optimized management of

the branch and ATM network.

How much cash to allocate to branches/ATMs in the

periodic plan ?

What is the cash replenishment level?

When to order cash ?

What is the utilization level compared to industry

averages?

Which processes can be streamlined for improved

efficiency?

What tool will be used to determine daily cash limits?

What tool will be available to centralize the monitoring

and management of cash balances and demand ?

How to Improve availability levels?

How to control the cash inventory ?

How to reduce subjective decision making ?

How to optimize cash within the cash reserve ratios

mandated ?

We help the bank answer the following:

Location analysis and optimization

Strategy/positioning

Business Plan

Service Levels

Profitability

Value proposition ( e.g. 24/7 )

Number of ATMs in operation and expansion plans

Customer Experience Management

Priorities and resource allocation

Customer satisfaction

Regulatory Compliance

Competitive environment

ATM Cash cycle

Forecasting

Ordering

Cash Reorder point

Replenishment/Scheduling ( Branch/Offsite )

IT Helpdesk

IT support

Branch

Cash Centers

CIT

Reconciliation ( Manual/Automated)

Uptime calculation

SLAs

Escalation

Reporting

FLM

SLM

Availability

Cash

Transaction types

Utilization

Withdrawals

Performance at peak

Historical trend

Seasonal trends and public holidays

Incidents

Cash Out

Technical

Float

End Balance

Excess

Network/region/machine

Trends

Cost of funds

Replenishment

Scheduled

Unscheduled

Scope

Business Process Data

The scope is focused on conducting an analysis of transaction data from

selected ATMs and branches; this is run through a cash optimization solution

to determine the degree of improvement that would result if such a solution is

implemented in the Bank. The scope of this phase includes:

•Data required is from 90 days consecutive transaction history

•Transaction data from 90 ATMs from representative types and locations

Through the Wall

Standalone

Standard Option

CDM/ CAM (Cash Accepting Machines)

Central/Eastern/western region

Busy areas (high withdrawals), city/rural area, mall/station/government

office, etc.

•Transaction data from 10 branches from representative locations

Central/Eastern/western region

Large/Small ( in terms of deposit/withdrawal volumes )

SCOPE

•Process to be reviewed include:

IT helpdesk

Monthly cash allocation planning

Reconciliation

Replenishment requests ( Planned/Unplanned )

Cash loading entries

Corrective entries

CIT reconciliation

Cash outs

Escalation procedures

Setup of cushion

Re-order point

Returns

Bank / CIT Interface

Current automation

SLAs Replenishment scheduling process

SCOPE (Cont’d )

APPROACH

APPROACH (Cont’d)

Recommended roadmap for implementing projects to address

gaps

Analysis of the current state Identified opportunities for closing gaps in current state

DELIVERABLES

Cash balances vs. optimal ending cash balances

Average amount per order vs. average amount per optimal order

Cash allocation as is compared to simulation

Availability

Comparison with industry average (and/or acceptable level as specified by Bank & Regulator)

Cost of downtime*

Float

Cost of Funds

Process rationalization

Areas for improvement in operational efficiency

Suggested Quick Wins: to optimize cash balances and processes with recommendation for a long term solution to maintain at required level

Quick wins

Long term requirements and roadmap

Actual Ending Balance vs. Optimal ending balance

The Phase I report will highlight what the bank has done in cash management over the 90 day period in

comparison to what the results would have been if the solution was in place. This will enable the Bank to

assess the measurable areas of improvement before moving into the next phase. The report with

highlight:

•Average Withdrawal amount per ATM/branch vs. Average Optimal & Actual Ending Balance

•Average ending cash balance vs., the average optimal cash ending balance ( see sample above)

Week 1 Week 2 Week3 Week 4

Track 1 Bank approval/Team

mobilization/Data Request

Data Extraction

Data Analysis

Track II Process review

Key areas for process

improvement

Final

Report

Findings and discussion with

Sponsor in Bank

TIMING

About FANERA A Cyprus-based company that provides business & technology services to financial

institutions in CEMEA

Our team includes a number of bi-lingual professional bankers and IT professionals with

experience at international and regional banks combining industry best practices with local

and regional culture and approach to assure success in all related initiatives.

Our approach to consulting is practical. We provide simple, implementable solutions and

participate actively in implementing our recommendations to assure maximum value for our

clients.

FANERA’s Services deliver direct impact on business improvement and ROI realization by

matching business targets with best-of-fit IT solutions.

Our services include:

Cash Optimization

Cards and payment systems

Mobile Payments and Remittances

Customer Experience Management

ATM/POS

BPR

Channel Optimization

Capability Assessment

Sales Acceleration

Cost Management

Cyprus-Headquarters

1, Poseidonos Street,

LEDRA BUSINESS CENTRE,

2406, Egkomi, Nicosia,

Cyprus

Athens, Greece

44 Kousianosfschi

Neo Psychiko

Athens 11515

P +30 690 9542288

Amman, Jordan

8th Circle Business Plaza

P.O. Box 140359

Amman 11814

P+962 79 6644424

FANERA Offices