Beyond Safekeeping: How Cash Analytics Will Reshape Retail

A new white paper lets LP leaders glimpse the future of cash management.

Sponsored by the Anti-Counterfeit & Currency Expo

Traditionally, cash management systems have focused almost solely on security. While it’s certainly a fundamental element—and one no less critical today—enhanced security features have done little to improve or advance the cash management function.

That, explains a new white paper, is a missed opportunity.

The value case is clear for loss prevention leaders and retailers to embrace smarter approaches to cash management, notes the study, which is being released in conjunction with the upcoming Anti-Counterfeit & Currency Expo, a free-to-attend conference in Las Vegas, November 6-8.

The average cost of managing and processing cash is 9 percent. Meaning, that out of every dollar taken in, nine cents are being spent to receive, count, safeguard, transport, and deposit cash. Moreover, even with an increase in use of debit and credit cards, the traditional burdensome costs of cash management remain the same, whether retailers take in 10 or 90 percent of their sales in currency.

Leading retailers are starting to catch on. They recognize the unnecessary costs they’ve been paying, according to Dr. Rory Herriman, chief technology officer for software and digital systems at SUZOHAPP, a leading manufacturer of input device components for vending machines, industrial control systems, and more. “Retailers are now aggressively demanding greater efficiencies along with the same level of tracking capability and analytic functionality from cash management systems as they derive from digital transactions,” said Herriman. He adds that this demand-driven move—from simple secure treasury functions of safekeeping to increasingly sophisticated analytic features—”is very rapidly defining the industry’s winners and losers.”

Leading retailers are starting to catch on. They recognize the unnecessary costs they’ve been paying, according to Dr. Rory Herriman, chief technology officer for software and digital systems at SUZOHAPP, a leading manufacturer of input device components for vending machines, industrial control systems, and more. “Retailers are now aggressively demanding greater efficiencies along with the same level of tracking capability and analytic functionality from cash management systems as they derive from digital transactions,” said Herriman. He adds that this demand-driven move—from simple secure treasury functions of safekeeping to increasingly sophisticated analytic features—”is very rapidly defining the industry’s winners and losers.”

The need to marry security with business efficiency has ushered in an entirely new generation of “smart cash devices,” including smart safes, cash and coin recyclers, and smart POS recyclers, pairing innovative data collection functions with advanced security features. SUZOHAPP’s CashComplete™ products, for example, validate and process banknotes while providing real-time reporting, management, and cash analytics.

The white paper explains how new features and functions—which include everything from automated counting and bill validation to full enterprise visibility and predictive analytics for cash forecasting, in addition to cashier balancing, a real-time view of cash shrinkage—allow retailers to leverage data to create previously unattainable efficiencies.

“The transition from basic cash protection to analytics holds the potential to not just reduce the costs associated with currency handling, but also provide many of the same business efficiencies enjoyed by digital transactions,” explained Herriman. “In this respect, cash handling not only becomes less expensive, but also reduces costs across an entire business enterprise.” Simply put, according to Herriman, retailers can reduce the hidden overhead costs of cash while simultaneously generating high-value data.

The value of advanced cash management systems is poised to grow even more with help of granular cash flow forecasting using artificial intelligence (AI). AI techniques will allow businesses to effectively manage working capital, whether it be external cash management associated with currency logistics, such as cash-in-transit (CIT), or overnight lending from banks. For instance, a company will know much more than just how much cash they have on hand; they’ll also know much cash they will need, allowing them to get ahead of future currency requirements.

In all, a retailer can tally up to 90 percent savings in associated fees by employing near-real-time analysis to perform balancing functions with greater speed and accuracy.

Another powerful tool coming is the ability to merge or co-mingle cash analytics with data collected from cashless payments, noted Herriman. “[It will] offer the merchant an ‘end-to-end’ understanding of all payment method transactions,” he said.

Fueled by advances in the Internet of Things, machine-to-machine communication, and cloud computing, experts are predicting that analytics software for cash management hardware is poised to become an integral part of all major retailers’ operations, concludes the study.

But isn’t cash dead? It’s not. The white paper explains how the cashless society, as appealing as it may sound, is as elusive as the paperless office. Indeed, a study by the Federal Reserve shows that cash is widely used among all demographics, is the most common payment instrument of households making less than $50,000 yearly and is especially popular among debt-averse millennials. Far from being able to ignore cash in the hope it goes away, it’s retailers that take first advantage of the rapid advances in cash management that will gain the most. “The ability to drive greater efficiencies and lower the costs of working in cash is simply too great to ignore,” explained Herriman.

In the past, cash management was not considered to be a competency required of functional teams outside of banking, CIT, or ATM management. That has changed. As the complexities of retail operations have evolved, so has the need for loss prevention, operations, and IT teams to proactively engage in cash management, monitoring, and protection. Retailers traditionally accepted overhead costs associated with cash. They saw it as the cost of doing business, sometimes not even recognizing cash as their most expensive form of payment. But that thinking needs to evolve alongside technology, explains the new study. Retailers and LP executives need to shift the way they think about cash management—to be profit-minded as well as security-conscious.

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