Three big ways outsourced cash management can help your financial institution

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The consistent shift toward outsourced cash management services (CMS) in the banking industry has grown so much in recent years that it can’t truly be considered a “trend” anymore. Instead of relying on in-house cash management and processing, or even outsourcing those services to another bank using a correspondent model, banks and credit unions of all sizes are adopting a different approach to CMS. Regardless of the size of the financial institution, the reasons behind the switch are often the same.

  • Internal cash management detracts from the financial institution’s core business.
  • Processing facilities and the requisite personnel are an expensive fixed cost that can also hurt efficiency.
  • There’s a desire for quality and innovation that financial institutions and their customers expect and deserve.

So how can the right outsourcing partnership help your financial institution?

It should let you focus on your core business.

Handling and processing cash is not always a money-making venture for many banks and credit unions. Many larger financial institutions have facilities and staff solely devoted to those processes, which requires enormous fixed costs. If they assist smaller banks or credit unions in a correspondent approach, there are government regulations with which to contend and added costs associated with having a middle man managing cash. For financial institutions of all sizes, a do-it-yourself approach also requires lengthy employee training. And the time employees spend handling and processing funds is time taken away from more lucrative banking activities.

“Outsourcing CMS to a dependable, technologically advanced partner organization allows financial institutions to focus on what they’re good at—securing retail and commercial deposits and new loans,” says Robert Lynch, Senior Vice President of National Financial Business Development at Loomis. “For financial institutions that handle and process cash in house, outsourcing CMS frees up valuable time and labor, which makes operations more efficient and lucrative, helps mitigate potential liabilities and security issues, and allows tellers and treasury management professionals to be more customer-centric.”

It will help you cut fixed costs.

Handling the responsibilities of cash processing in house comes with a lot of overhead in the form of dedicated facilities and personnel. By removing the fixed cost of a brick-and-mortar facility, as well as the time and labor associated with training and processing, financial institutions can turn that expenditure into a pay-as-you-go variable cost.

“Outsourcing makes costs more predictable,” says Lynch. “Avoiding the investment in fixed assets, as well as in security, training, and IT, means banks and credit unions cut costs.”

It inspires confidence through quality and service.

Though there are many third-party CMS providers available, few have adopted new technologies and training of personnel, or made investments in infrastructure that are necessary to effectively and securely provide quality processing services. Additionally, few providers offer a comprehensive CMS model that includes multiple service lines and offerings. To make outsourcing worthwhile, third-party providers should be offering a more modernized approach to CMS.

One such approach is Loomis’ Managed Cash Services, a full range of configurable solutions that help financial institutions reach beyond their brick-and-mortar brand network without growing the physical footprint by using a robust vaulting network of over 150 branches. These services include:

Comprehensive cash management and vaulting services, specially designed to meet the complex needs of financial institutions, up to and including full cash process outsourcing.

Leading cash-in-transit services, with a fleet of over 4,000 vehicles enhanced with the latest technology and operated by the best-trained staff.

The nation’s leading ATM service, with a network of more than 85,000 ATMs throughout the United States and a comprehensive solution of replenishment, settlement, pickup, processing, maintenance, and forecasting.

Treasury Management expertise, which helps financial institutions grow their commercial portfolios, scale clients’ businesses, and reduce walk-in branch traffic and risk.

The Loomis advantage, giving clients access to the most dedicated support and service teams in the business, as well as complete reporting and account visibility.

“We’ve made tremendous investments in our facilities, in cutting-edge new technology, and key infrastructure,” says Lynch. “What we’re able to offer clients, in addition to service and quality, is improved customer perception and expectations of how cash processing should be done.”

Outsourcing is gaining momentum in the industry and will continue to do so. When considering a partnership with a third-party CMS provider, financial institutions should look for a relationship and solutions that remove obstacles, help cut costs, and ensure outstanding quality and service.

 

 

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