Bigger is not always better, even when it comes to having cash on hand. There is a delicate balancing act, when it comes to having the right amount of cash at the ready. The right balance allows you to meet your customers’ needs without overwhelming staff with managing cash coming in and going out.
Since each bank and credit union branch strives to provide a rich and satisfying customer experience, efficient, secure and error-free cash handling at the branch remains a priority. This is why, for financial institutions, there are a number of benefits to having less cash on hand.
Determining The Appropriate Amount of Cash on Hand
Keeping cash on hand requires accurate cash counting, authentication and security. For financial institutions, banks and credit unions, most in-person services require quick, efficient and accurate cash handling, rather than managing large cash reserves.
There is a sweet spot between having too much and not having enough cash on hand. Forecasting your cash flow projection for the next 6 months to a year can help you find the appropriate amount. Of course, when calculating the amount of cash on hand for your organization, it’s a good idea to err on the side of caution and be conservative with your estimate.
On the one hand, you will want enough cash available to cover your customers’ transactions. The size of your institution, as well as anticipating your customers’ daily needs, can help you with your decision. Other factors, such as busy seasons and holidays, may require more money to meet your customers’ demands. And, of course, it is imperative that you be sure to keep enough cash available to agree with the Federal Reserve requirements.
Reserve Requirements for Cash On Hand
Reserve requirements are put in place by the Board Governors of the Federal Reserve. While this reserve requirement was reduced during the COVID pandemic, to encourage banks to lend, financial institutions follow these requirements closely. In addition, you may find it useful to consider historical reserve requirements as a good starting point for determining the appropriate amount of cash on hand, and then alter your reserves as needed.
Ultimately, every financial institution will have different needs. Take into consideration your customers’ needs, your cash flow projections, and consider adding in a buffer for unexpected large transactions and holidays. To aid your team in its daily cash management efforts, Cash Automation can be helpful.
What does Cash Automation mean?
Cash automation refers to tools that optimize cash handling operations. Since each bank and credit union branch strives to provide a rich and satisfying customer experience, cash automation within the branch remains a priority. One cash automation tool is the TCR (Teller Cash Recycler). With the addition of TCRs, you can automate your cash handling and achieve a number of efficiencies: TCRs empower tellers to deposit cash into a machine that counts and sorts the bills, then authenticates them. The bills are then stored in an internal vault. The TCR also provides the capability to dispense cash as needed. In essence, the TCR is able to process automated cash transactions for tellers from the cash inventory, including deposits and withdrawals, to help each location operate with less cash on hand.
Our partners at Hyosung Innovue offer TCR products whose technology provides automated and accurate reporting that details cash on hand at any given moment. Their state-of-the-art solution, the MS500 TCR, acts as a small vault, bill counter, and ATM-like cash dispenser.
TCRs such as the MS500 can reduce human error, accelerate a teller’s pace, reduce queues, and quickly count and handle high volumes of cash. TCRs provide the support tellers need to handle the same number of transactions – or more – with less cash.
Because the MS500 recycles and safely stores cash in a miniature built-in vault, there are fewer instances of replenishing cash, which also reduces the need to hire security for cash transport since the cash is not being replenished as frequently.
Hyosung’s MS500EL has been designed as the entry-level TCR model for financial institutions. The MS500EL offers the most reliable, smaller capacity, and proven cash recycling technology to maximize a branch’s return on investment. At a smaller price point, the MS500EL streamlines cashier productivity with TCR functionality previously unavailable in its class, leveraging the latest in TCR technology: 7 stacked cassettes; 8 notes per second and 200 notes per transaction, and 8500 note capacity (perfect for smaller branches or businesses); with the security of Windows 10; and the industry’s most advanced entry level TCR, featuring a 7’’ touch screen display, and now, add-On Technologies DynCorp integration. Click here for more information about the Hyosung MS500EL
In partnership with Hyosung Innovue, we aim to empower financial institutions, large and small, to manage cash coming in and going out more efficiently. Innovative solutions, like Hyosung’s MS500 series, advance this objective. Each machine has been purposely designed to allow branches and credit unions to do more with less cash on hand, support their staff, and above all, deliver world-class cash handling to ultimately keep customers happy.
Wittenbach’s Managed Services
Regardless of how much cash on hand you choose to have, you need a trusted partner to help you manage your ATM/ITM network. Let Wittenbach become your trusted resource for managing and optimizing your fleet.
Wittenbach’s Managed Services can keep your ATM/ITM network optimized and functioning at their peak, thereby avoiding downtime. Our Managed Services team performs patch management, status monitoring, and diagnostics. Plus, we provide ongoing reports to keep you informed about your institution’s cash contents, cash loads, and transaction volume.
Based in Maryland, we partner with leading ATM/ITM, and TCR manufacturers, such as Hyosung Innovue, to service financial customers throughout the Midwest and East Coast.
To get started, give us a call at 410-667-6400, and we can discuss your unique needs and set up a consultation. Or send us a message to set up a tour, a visit our Solutions Center, or to speak with one of our experts to explore any questions you may have.