As of 2015, banks held over $2.6 trillion in excess reserves. But managing all of that extra cash requires time and money.
If you want to streamline your bank's cash management, you need to automate your process. The right software can help you, and it can help you optimize your time and cash flow.
Keep reading to learn more about modern cash management software.
A customer deposit or withdrawal at a bank can change a few things. It can change how much money is in the customer's account, and it can also change the amount in the ATM or the bank teller's drawer.
Money will come in and out of the bank or ATM throughout the day. The daily cash load may be hard to predict, though. With traditional banking software, it can take a couple of business days to resolve cash loads.
However, new cash management software can track money in real-time. That way, banks can resolve any issues more quickly.
While a customer may not be able to cash out a ton at once, cash management can help predict when customers will deposit or withdraw large amounts of money.
Over time, the cash load trends can tell banks how much money to keep on hand. If a lot of people cash their paychecks on Fridays, a bank can use cash management software to confirm they should have more cash available then.
Tracking money and customer trends allows a bank to predict what type of cash to have on hand. If a bank branch has a lot of business customers, the branch would need different bills than a branch with mostly personal customers.
Businesses and individuals manage their money differently. A business that sells physical goods may need change on hand. However, an individual probably won't need a ton of coins.
Using this information and the right banking software, a bank can forecast future cash loads. That way, the branch can order the right type and amount of bills.
Part of a bank's cash management requires ordering cash from the Federal Reserve. A typical banking program works with cash flow and cash forecasts.
However, it doesn't always work with cash loads or treasury reconciliation. But cash management software for top banks should incorporate all of these elements.
Every branch needs to order cash each week, so the key is minimizing the excess cash. Ordering more cash means someone has to spend more time counting through it and making sure everything is accurate.
The right cash management software can help you limit excess cash. That way, a branch has the money it needs, but you won't have to count and organize more than necessary.
Treasury reconciliation is another essential step for banks when tracking money. It involves reviewing deposits for accuracy. You can use treasury reconciliation to help detect fraud and other issues.
When checking records, you can consider a few things, such as bank cutoff times and human errors. Usual banking software reconciles each week or each month.
However, modern cash management allows a bank to reconcile each day. You can do so automatically, and it will track and resolve exceptions quickly.
Because of this, banks can find fraud more quickly, and you won't have to wait until the end of the month to follow the process.
Treasury reconciliation can help banks ensure financial transactions are valid. Automating the process can save time and money, so banks can focus on other tasks.
One of the benefits of switching to modern cash management software is that you can use existing data. If a branch has been open for a while, there will be transaction records that you and the system can use.
The banking software can use that data to determine how much cash to order and how much to sell. You won't have to wait weeks or months to start taking advantage of the new system.
Customer actions and data may change over time, though. Luckily, a good cash management program can adapt. Then, a branch will be able to order cash based on the new trends.
Customer records are key to cash management, and they can help you save money. If you know what money to keep on hand, you can fulfill customer requests without wasting time managing excess cash.
Whether you have a small bank branch or a massive one, you need to optimize your cash. While having too much cash may not seem like a big deal, it can waste time.
After all of that money comes in, someone has to count it and verify it. The vault will then need room to store those bills.
You can use proper cash management software to reduce the cash you need to order. If the system finds you hardly every give out $10 bills, you won't need to have them in the vault.
You won't need to organize or count them, and other tellers won't need to exchange them from the vault. All of that can take up time which you could use to help customers.
Banking may seem like an industry where you need some human interaction, and that's true. However, you can automate more than your bank ATMs.
Banking software can use AI technology to learn how a particular branch operates. While you will still need tellers to perform in-person transactions, the system can eliminate other work.
Your vault teller can spend more time working with customers and less time managing the vault. By automating part of the vault, you can reduce the number of tellers you need.
If the vault teller can be with customers more, you won't need as many other tellers to take care of customers. All of this can help a bank save money and save time.
Cash management is essential for small, regional banks and national ones. Luckily, you can switch to a modern banking program to help optimize your cash flow.
Then, you and your team can spend less time counting money and more time helping customers. You'll be able to invest more time into helping grow the bank as a whole.