Smart safes and the cash in transit industry

30 August 2017

Technological advances in how we pay for goods and services means that an increasing number of payments are being made via electronic or wireless transfer. However, cash remains a necessity in business, particularly for small value purchases such as fast food, gas and beverages.

Currency processing and transport can be time consuming, costly and risky. Many businesses outsource this procedure to cash in transit (CIT) operators as a way of transferring the responsibility in a secure way. Smart safe technology can assist both business owners and CIT firms in leveraging their cash management efficiency.

There has been a marked increase in smart safe deployments in the past couple of years, particularly in the US, as equipment costs have decreased and more retailers are opting to minimise their manager’s involvement in cash management and processing. This trend is further developing into the deployment of recycling technology.

Smart Safes were created to streamline the cash management process and store money in a more secure environment, particularly within retail situations. They offer the ability to monitor and control the cash management system with relative ease, by automatically accepting, validating, recording, and storing notes in a secure safe, until it is removed and taken to the financial institution, typically by a CIT company.

Considering the features above, and since the cash is immediately placed in a centralised location that is safeguarded, employees spend less time handling money and can focus on value producing tasks. Also, cash losses can be reduced by this improved accountability of staff on every shift – in particular, internal theft risks.

Another key attribute of the smart safe is its ability to connect online, which can be to a business network or headquarters, a financial institution, or a CIT provider. This allows closer monitoring of transactions and greater cash management control. It also allows for earlier depositing of cash receipts through provisional crediting (also known as same day credit).

As mentioned above, the amounts deposited are often guaranteed by the CIT company or financial institution, meaning cash flow is improved and discrepancies are greatly reduced.

With the relevant agreement in place, the deposit can be transmitted to the Financial Institution every day regardless of when the physical cash is picked up by the CIT company. There should be no missed or late deposits, as the CIT company now manages this process on behalf of the financial institution. The cash often remains the responsibility of the financial institution, but the CIT company will take care of the process.

Once cash is put into the smart safe, employees will no longer have access to the deposits within the smart safe except in dual custody with a CIT company, giving an added layer of protection. Also, since the staff or manager will no longer have to physically take cash to the financial institution, the threat of robbery or accident resulting in the loss of cash should be greatly reduced.

This reduction in the movement of cash is a positive for the CIT industry. Smart safes are becoming a common way for CIT companies to reduce the number of transits they need to make, along with the costs and risks involved in transporting cash. By enabling cash to be grouped together and moved in larger batches, the number of required pick-ups is reduced, which is more cost efficient and practical for CIT operators. Many CIT operators also provide cash room services for smart safes and verify the deposits picked up at their facilities before consolidation and depositing into a financial institution inventory or the Central Bank. This additional service can provide an extra revenue stream for CIT operators which can help outweigh any negative impact of reduced revenue due to less frequent pick-ups of cash.

As smart safe implementations increase, so may the number of potential clients for a CIT company. Employees are no longer making daily trips to the financial institution, instead companies are employing a CIT company to make regular pick-ups from the smart safe.

As explained, when CIT companies take responsibility for the cash once it is in the safe, they require adequate protection. The CIT insurance policy can be extended to include coverage for cash within Smart Safes, including third party locations. This gives an extra layer of protection for all involved, if a loss scenario presents itself (e.g. forcible entry or fire).

To serve you better, JLT and the London insurance market are constantly making enhancements to their products to move with the changing dynamics and advances in technology of the cash in transit industry. 

For further information please contact Paul Carr, Partner on +44 20 7466 6284 or email paul_carr@jltgroup.com

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contact Paul Carr
Partner, Fine Art, Jewellery and Specie paul_carr@jltgroup.com