Automated cash management is king

March 2016 Security Services & Risk Management

While cash-in-transit crime is down from its peak, that doesn’t mean cash isn’t still a tempting target for the morally deficient. The fact is, in South Africa and in Africa, despite hearing about mobile money and all sorts of alternatives, cash is still king as it is in most parts of the world.

The result of this is that retailers and any other company dealing with consumers will need to have a plan in place to deal with volumes of cash. To highlight what is happening in the cash-handling world, Hi-Tech Security Solutions asked some of the leading cash management companies for their insights into the cash management market.

Our answers came from:

• Gawie Du Preez, cash solutions divisional exco, strategic business executive, Fidelity Security,

• Hannes Venter, MD, Gunnebo sub-Sahara Africa,

Shaun Nicholls.
Shaun Nicholls.

• Shaun Nicholls; executive, business transformation, SBV Services, and

• Christo Terblanche, MD, G4S Cash Solutions (SA).

Hi-Tech Security Solutions: Are you seeing a move away from cash in business today? Are we heading for a cashless society? Are there any benefits of still using cash today?

Gawie Du Preez: As a cash industry, the compounded growth over the last number of years has been above inflation on an annual basis, indicating significant growth in cash in circulation. In a country with such a large informal sector, there will always be a need for cash to facilitate trading at an informal level. Cash not only has the benefit of immediate liquidity, but eliminates credit risk and fraud.

Hannes Venter: Yes and no. We are seeing the introduction of many new payment mechanisms in the market, from cellphones to specific apps and so on. The reality, however, is that all transactions end in cash. In Kenya, for example, MPESA is resulting in more ‘non-cash’ transactions, but it has not influenced the cash in circulation in the country. The fact is, cash is still growing.

Shaun Nicholls: Cash in circulation is growing by 8% to 9% per annum and has consistently increased over the last decade. Despite all the payment technology available to consumers, cash remains a preferred method of payment.

Christo Terblanche.
Christo Terblanche.

Christo Terblanche: The “move away from cash” is merely a message generated by suppliers who gain to benefit from the demise of cash. As it currently stands, cash still accounts for 84% of all payment transactions globally. It is true that the number of cash transactions as a percentage of total transactions has declined, but when you consider the increase in the total number of transactions year-on-year, it stands to reason that the cash in circulation is on the increase. According to the South African Reserve Bank, cash in circulation has exceeded the R119 billion mark.

The reasons most commonly cited for the use of cash very closely mirror the benefits thereof and include its ease of use, integrity and anonymity.

Hi-Tech Security Solutions: Statistics show that cash-in-transit heists have declined significantly. Is there still a need for “full solution” cash services in retail or other industries?

Gawie Du Preez: The statistics actually show a migration of crime away from bank ATMs to cash devices at retailers. Unfortunately, crime necessitates end-to-end solutions, not only to protect physical cash, but also to create a more secure environment for staff and

customers alike. We believe an end-to-end solution should be considered by all retailers for managing their cash. These solutions incorporate in-store devices, collection of cash and the processing of cash. An additional service that Fidelity views as important is the armed response linked to an alarm.

Hannes Venter: The decline is because there has been a dramatic increase in CIT security and crime always moves to easier targets – it doesn’t go away. The catch is, you can’t relax your security because then the criminals will return.

Shaun Nicholls: Cash handling consistently presents a business with the potential risks of robberies and thefts. Crime in the cash environment is becoming more sophisticated with technology, violence and intelligent mechanisms playing a greater role as criminal syndicates continuously change their tactics in their plots to take on the cash industry. Criminals are also prepared to take higher risks, with the use of violence and heavy armour becoming more prevalent. Companies such as SBV Services make it their business to understand these dynamics and adjust services and solutions to keep pace with changing trends.

Processing and holding cash on business premises, the movement of cash, the handling of cash and the costs of cash on hand need to be managed effectively. From the moment that cash enters a business’s premises, various challenges are to be considered. Aside from the potential robberies and losses due to theft, one needs to consider the interest that could have been earned or saved had the money been in the bank.

Cash services and solutions companies such as SBV Services are able to help businesses identify and mitigate their risk and to ensure that all their cash is not only safely collected and transported, but also accurately attributed to their accounts. This is particularly valuable in freeing up businesses to focus on their primary purpose, rather than having to devote resources to cash management. It also saves businesses money in the long term as cash services companies use volumes of scale to negotiate better insurance on cash and valuables that they handle on behalf of their clients. Costs also have the potential to go down when businesses apply a full range of security solutions, such as deposit systems, vaults and safes, and CIT services from one provider.

Christo Terblanche: The most recent statistics released by SABRIC shows a 34% increase in the number of cash-in-transit incidents by August 2015 when compared to the same period in 2014.

If 85% of transactions processed in South Africa are cash-based today, the importance of a “full solution” cash service is more important than ever. Not only are these solutions important to the retailer and other industries, but cash-in-transit is critical to the stability of the economy.

Hi-Tech Security Solutions: When it comes to cash handling within a retailer or another industry, are businesses tending to use automated solutions rather than manual processes to count and sort cash – and keep it safe? Or are businesses still careless about their cash handling?

Gawie Du Preez: Retailers today are informed and very aware of the risk physical cash poses in-store. We experience a continued growth in automated solutions; these solutions create efficiencies in the cash back office of retailers while protecting the actual cash. The cost of cash services remains a key driver in the decision to automate.

Hannes Venter: Unfortunately, there is still a large portion of the retail market that is not using the latest automated solutions. There is a tendency to do things as they always have been done until something goes wrong. Having said that, this attitude is changing and we are seeing growth in the uptake of these solutions. The key is to ensure the buyers see value from their spend.

Shaun Nicholls: Many businesses that handle cash rely on manual processes to process, deposit and reconcile their cash. This can largely be attributed to cultural beliefs and a reliance on traditional methods of doing business. A large part of the population, specifically in the informal trade sector does not have confidence in new technology and views the new methodologies available to them as a threat to their business.

Christo Terblanche: The choice whether to move from manual based processes to automated solutions is ultimately that of the retailer. However, increasingly, retailers and other industries are realising the significant benefits of automated cash handling solutions.

There are a number of factors that need to be considered when making this choice. Businesses need to take into account costs such as insurance, shrinkage, additional staff employed to manage cash processing on site and deposit and banking fees, to name a few. But possibly the deciding factor, in many instances is the risk of doing business in our current environment and the potential for cash loss or worse still, the loss of life and the significant resultant reputational risk. Not to mention the trauma of such incidents experienced by staff and customers.

Businesses are increasingly viewing the move from manual to automated processes as an investment and a way in which to streamline processes and improve their bottom line.

Hi-Tech Security Solutions: What can businesses do to ensure their cash is safe at all times?

Gawie Du Preez:

• Maximum security during opening and closing times.

• Daily cash-ups should be done in a secure environment.

• If large amounts of cash are left in the store overnight, it should be placed in a categorised safe or device, with proper key management controls.

• Adequate early warning systems and intruder alarms, with armed response linked to it.

Hannes Venter: A fundamental issue is to ensure that cash is touched by humans as little as possible. Every time someone handles cash, there is the potential for theft or fraud. By automating cash handling processes, one reduces the number of ‘touches’, and limits the opportunities for crime.

This should be backed up by proven back-office processes that keep cash safe, including the appropriate storage and the right category of safe.

Shaun Nicholls: Some of the measures that can be used to mitigate cash risks include:

• Use employee-vetting services to ensure trustworthiness of those handling cash.

• Outsource the movement and processing of cash with a reputable cash services company.

• Outsource your float and payroll orders to reduce cash volumes on hand.

• Use web-based systems for managing cash orders, deposits and clearances.

• Two solutions that can be used by retailers are cash acceptance and cash recycling devices. Both these solutions provide added security as your cash is stored in a secure safe while it is on your premises. Furthermore, the devices provide added benefits to your cash handling process:

- Cash acceptance devices allow for accurate counting of notes and remote banking, saving retailers time; they also enable increased employee productivity due to the absence of errors in the act of physical cash counting. Another advantage is to curb shrinkage in cash takings by ensuring that sales receipts balance with physical cash before the cashier retires for the day.

- Cash recycling devices, can further optimise cash handling efficiencies, thereby limiting the potential of cash losses, errors, and frequent visits to the bank to make deposits or draw floats. These devices allow for the depositing of higher value denomination notes and the withdrawal of previously deposited smaller denomination notes at any time during trading hours. This eliminates the need to run to the bank during trading hours to secure change in smaller denomination notes.

Christo Terblanche: For a business to ensure the safety of their cash, they need to completely understand the risks they face. These are easily identified by conducting a risk audit. Once a customer knows what they are dealing with, each of those compromised areas can be addressed by partnering with specialists in this field. The safekeeping and transportation of cash is the responsibility of all parties involved and requires a mutually beneficial business partnership to get it right. Ultimately, businesses want to ensure that cash is handled as little as possible and when it is handled, there are processes and procedures in place in order to account for the cash at all times.

Hi-Tech Security Solutions: What services/products does your company provide with respect to cash handling and management?

Gawie Du Preez: Fidelity prides itself on its ability to provide an end-to-end solution. We provide the following services:

• Cash in transit, ensuring cash is collected and delivered securely.

• Cash services, Fidelity processes the cash and deposits money electronically into the customer’s account. Supply of payrolls and change / float orders.

• ATM servicing.

• Cash device solutions, a wide range of both bag and canister device solutions that can be tailored to the requirements of the customer.

• Armed response services.

Hannes Venter: Gunnebo can provide a full solution for front and back-office cash management to all our customers. Our latest front office solution, SafePay, combines cash handling and till points.

SafePay acts as a slave to many current POS points, meaning the cashier won’t have to learn to use a new system, but the company will still benefit from the automation and security of the solution. The benefit of SafePay is that the built-in scanner automatically accepts notes from customers without the cashier touching them, or the teller can accept and feed the notes into the scanner and the customer can add in coins – whichever system the business prefers.

This ensures the right amount is entered and the right change given in every transaction, without the possibility of anyone skimming from the till. At the end of the shift, the system automatically reconciles the cash and retains a float for the next teller. Excess cash is stored in a sealed cassette which can’t be opened (and can be provided with ink protection). When the cassette is full, a message is sent to the back office and a supervisor is given a PIN to use to extract the cassette from the SafePay point. The cassette is them docked into a Chubb safe in the back office where it is again reconciled for CIT collection.

This system ensures that nobody touches the cash, while keeping accurate records, the correct floats and avoids human mistakes. The system has a 3-way check for fraudulent notes to ensure real notes are deposited. It also allows for people to transfer cash to friends and family via their retail stores, which means the cash can be deposited and drawn from the same system if the owners so desire.

Shaun Nicholls:

• Solutions for the banking industry: SBV provides secure and efficient cash services and solutions to all the major banks and is an approved cash-in-transit carrier for the South African Reserve Bank. In addition, we are the custodian of the South African Reserve Bank’s off-site vaults. Guarding is offered for bank branches, together with tactical armed reaction and offsite monitoring.

• End-to-end solutions for ATM management: Tailor made specialised solutions in ATM management allow our customers to outsource most of the business processes involved in ATM operations. Various service models are available to improve efficiencies and reduce operational costs.

• Retail cash solutions: SBV provides an integrated range of cash services and solutions customised for businesses including cash in transit, cash processing, packing of bulk orders, payroll preparation and float orders. We also offer a combination of devices and technology to make the cash handling process more efficient and secure. As part of our service offering, we conduct risk assessments to secure your premises and enhancing the safety of employees and the public.

One of our solutions for the retail environment is the Shopping Mall Cash Recycling (SMCR). SBV’s SMCR creates a safer commercial environment by reducing both armed and unprotected cash movements in shopping centres.

• Industry specific solutions: SBV provides services and solutions to the cash industry including capacity planning, cash processing and cash supply chain optimisation.

Christo Terblanche: G4S South Africa is able to assist customers, throughout the country, with end-to-end secure solutions.

G4S Deposita and G4S Cash Solutions specialise in cash handling solutions. Cash on the customer’s site is secured in customised automated banking machines (ABMs). These machines ensure that the cash is secured during the collection and processing of funds. Cash recycling and dispensing functionality is available should the customer require it.

Not only does G4S Deposita manufacture and supply a broad range of automated banking machines, but they have been innovative in the self-service and payment sectors too. Many retailers are increasingly offering extended services to their customers, services that range from pension payouts to the selling of pre-paid electricity and vouchers, all of which have value and need to be secured.

Increasingly, G4S Deposita has seen the need for a bulk cash acceptance device coupled with a solution for the acceptance of coins. The new ergonomic and scalable DBTS 10 000 and DCS 1000 coin sidecar, with enhanced security features including a CAT 3 equivalent security rating and ceramic cladding fills this need.

The DBTS 10 000 is a robust yet compact cash acceptance device that accepts and validates up to 600 notes per minute with a capacity of more than 10 000 notes.

This is available as a stand-alone device for retailers banking only notes or can be coupled with the DCS 1000 coin sidecar, a high-speed coin acceptor that validates 1000 coins per minute. This solution is tailored for the larger retailer.

The d2400 automated banking machine is still the preferred device used by medium sized retailers. G4S Deposita currently has more than 4000 devices in use in South Africa and has expanded its footprint internationally.

The locally manufactured and customised G4S Deposita hardware, that forms part of an end-to-end solution for retailers, ensures that our customers enjoy complete peace of mind knowing that their cash is effectively and securely managed, and that they are not exposing their staff and customers to unnecessary risk.

Having ensured that the cash is secured on the retailer’s premises, G4S Deposita further assists our customers with all aspects linked to their devices. This includes transaction recording by cashier, and user activity, allowing store owners to monitor the level of cash dropped per till. The physical and component monitoring of devices, for maintenance purposes, is managed through this software and a team of technicians are on call to assist customers via a call centre or on-site. The reconciliation, settlement and management reporting functionality of the Terminal Management System (TMS) is viewed by customers as one of the most advantageous features of the software, assisting with bank reconciliation and query resolution. Other than the obvious benefits of increased security when installing such devices, the functionality and benefits of the TMS are what make these devices a contributing asset to the businesses.

Having ensured that cash is safe on a customer’s premises, G4S Cash Solutions is able to ensure the safety and security of the remainder of the cash cycle through the provision of professional cash-in-transit services. G4S Cash Solutions operates a fleet of more than 700 armoured vehicles that travel the equivalent of three times around earth each day. Fully armoured and fitted with the latest track and trace and security technology, this service, coupled with on-site solutions helps to secure our customers’ cash.

What’s more, G4S Deposita’s risk transfer options ensure that the retailer’s cash is always covered.


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