Royal Bank revamps cash management for ATMs

The Royal Bank of Canada is rolling out a software system that will help it do a better job of figuring out how much cash it needs to transfer from its vaults to its ATM network.

The system, which will be based at an NCR Canada data centre in Mississauga, Ont., will act as a repository, with models and rules built into it that govern other currency management applications. These include a program called OptiCash from Transoft International Inc., which gathers data to forecast how often ATMs will run out of money, and OptiNet, which allows banks to generate emergency orders when a machine runs out sooner than expected.

NCR has been handling currency management for RBC since 2000 as part of a seven-year outsourcing agreement. Although the bank had previously developed its own applications to handle some of these functions, an analysis of the service costs for its ATM network led executives conclude it would have to invest more to keep its technology up-to-date, said James McGuire, senior manager of Self Service Networks at RBC Royal Bank.

To keep ATMs replenished, banks like RBC store cash in a treasury area. The vault management will help optimize the amount of cash required by RBC’s treasurers to supply them.

“”It’s something that they’re working with us to develop, but obviously they’ll then take that to other customers as well,”” he said. “”We’re looking at (a complete rollout) before our fiscal year-end, which is about the Oct. 31 timeframe.””

Brenda Kettering-Peck, a senior member of NCR’s Managed Services organization, said the NCR team was about halfway through the implementation, which involves about 68 RBC vaults. “”They go vault by vault,”” she said.

The demand requirements from each location are fed into the OptiCash application, which spits out a forecast at the end of each day. A team at NCR Canada processes this information and provides Web-based reports that can be accessed at the branch level so they know how much cash to load into each machine.

“”In some cases we’re replenishing machines daily, but in other cases we’re replenishing much less frequently than that,”” McGuire said. “”It allows us to maximize the number of times that we’re going to a machine.””

RBC has been using OptiCash and OptiNet for several years, which is partly what prompted the bank to move into the vault area, McGuire added.

“”Our cash balances is much lower than it’s ever been,”” he said. “”And our frequency of ‘cash-outs’ is also reduced. So we’ve seen benefits from both sides.””

Kettering-Peck said RBC was an example of a natural progression that’s occurring among many other financial institutions.

“”The vault is an area that I would say has gained more of a focus and attention than ever before,”” she said. “”I think it’s just a maturity of the market and the fact that every financial institution globally is looking to get operational efficiencies and reduce costs.””

NCR is providing similar services to Akbank in Turkey and Nordea in Scandinavia.

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