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U.S. Treasury Department’s Bureau of Engraving and Printing• There are 35 million bills of all denominations produced each day, • Rough value of daily bills produced is around $1.5 billion• It costs approximately 8.7 cents for each bill• 0.1% of all money in circulation is fake or around $780 million• 90% of all bills are printed to replace destroyed or withdrawn
HISTORY OF CURRENCY
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Several benefits of using currency include:• Easy medium of exchange• Tangible and easy to validate its worth – store of value• Retains anonymity of the consumer• Allows customers privacy of personal accounts
CHARACTERISTICS OF CURRENCY
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CASH IS PROBABLY NOT THE FUTURE…
• 98% consumer adoption
• Phone vs. wallet
• Bitcoin-- $1.3B in 2012 transactions1
1Source: bitcoin.org
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BUT, IT’S NOT GOING AWAY SOON…
Source: Federal Reserve Bank of San Francisco, 2012 Annual Report
Currency in Circulation
6Source: Federal Reserve Bank of Boston 2011 Survey of Consumer Payment ChoiceOliver Wyman analysis
21% 28%Cash is used more often…
$69 $75 …carried around in larger amounts…
$179 $220 …and spent faster!
Monthly cash transactions
Median cash holdings
Median monthly cash withdrawal
2008 2011
TRENDS IN CURRENCY USE
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Technology has made retail receivables more sophisticated
…yet retailers’ cash handling has remained mostly unchanged
Prepaid Cards
Prepaid Cards
Back Office Conversion
Cash
Physical handling costsMinimal integrationSignificant idle cash
Debit and Credit Card
Growth
Self Check Out
Check Imaging
Prepaid
Emerging Mobile
Payments
RETAIL TRENDS
11 Ó Fifth Third Bank | All Rights Reserved
THE REMOTE CASH CAPTURE VISIONFifth Third’s Commitment to Currency Logistics
2007 2009 2011 2012 2013 2014
Fifth Third’s Innovation...Fifth Third becomes pioneer & market leader for providing provisional credit in the Smart Safe industry
Fifth Third’s Vision...Fifth Third expands its view & commitment to the market through it’s CPS strategy & managed services model
Fifth Third’s Dedication…Fifth Third invests in a team of industry experts & changes the course of the market
Fifth Third develops a strong partnership with Brinks & begins to change the dynamics of the Smart Safe industry
Market adoption grows & Fifth Third expands business model with Garda & Loomis. Fifth Third captures 70% of the provisional credit market
Fifth Third introduces the CPS10K, CPS2K & CPS1K to address new market segments through a managed services model
Fifth Third introduces a device management strategy will revolutionize the availability of data & how the network is managed
Fifth Third develops a strategy to expand the market & address key service limitations through a managed service model
RCM CPS
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Closed Loop Cash Management
Remote Cash Capture provides daily access to cash, improves liquidity, eases reconciliation, and reduces operating expenses, while cash receipts physically reside in the safeCashiers collect payments throughout the course of their shift.
Mitigate risk of fraud and theft by securing cash at the earliest opportunity.
Cash receipts are deposited into an on-site smart safe.
Deposit data is recorded and aggregated for transmission to Fifth Third Bank daily for posting to a clients account.
Monitor cash flow activity, including deposit and change order detail by location utilizing a BAI file and Web-based reporting.
The safe contents are picked up by a courier on a prearranged schedule and transported to a secure cash processing facility.
Operations
Treasury
Loss Prevention
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Focus Staff on Core Business Activities that Improve Sales• Increase floor presence of management
• Increase throughput and sales per man hour
Utilize Cash Handling Technology• Reduce non-service administrative labor
• Minimize cash handling redundancy
• Optimize device placement
• Create a closed loop
BEST PRACTICES
“If more focus was around readiness of store inventory and having the available supply for customer demand, an increase in sales would result.”1
“Store labor is the 2nd largest expense for retailers, often accounting for 10-20% of sales and sometimes for more than 50% of operating costs – labor planning, execution, and retail store performance.”2
1 Source: http://www.oracle.com/us/industries/retail/redesign-customer-experience-wp-177586.pdf2 Source: http://faculty.chicagobooth.edu/workshops/omscience/archive/pdf/Traffic-Product.pdf
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Improve Safety and Security
• Eliminate Bank Runs
• Reduce Armored Frequency and gain Provisional Credit
• Reduce Till Balance & Deposit Exposure
Reallocate or Extract Labor Cost• Eliminate cash rooms or vaults
• Impact on front end associates
BEST PRACTICES
“Employee theft represents 43% of the total retail annual loss of over $33 billion, the highest contributor to overall retail loss.”1
1. Source: http://blog.lpinnovations.com/Loss-Prevention-Leadership/bid/46024/Employee-theft-higher-in-the-United-States; 2009 National Retail Security Survey
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Increase Visibility of Cash Over (Short) Performance
• Enhance accountability
• Improve audit processes
Improve Risk Management
• Utilize time delay functionality
• Manage withdrawal limits
Reduce Operating Supplies
Eliminate Multiple Banks
Improved Reconciliation
BEST PRACTICES
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Results Achieved
• Eliminated need for bank runs, reducing labor costs by 1.13 hours per day
• Deposit prep reduction .41 hours per day
• Till reconciliation process reduced by 50%(+)
CURRENCY PROCESSING SOLUTIONS (CPS)CLIENT SUCCESS – Quick Service Restaurant
Background
Fifth Third partnered with quick service restaurant chain to deploy remote cash capture technology across a national footprint
Realized net impact of $2,679,400 in annual profit contribution
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Results Achieved
• Reduced labor requirements by 6 daily hours
• Re-engineered processes with front end supervisors
• Deployed proof of concept that eliminated cash shortages
• Leveraged Series functionality for efficiencies in opening
• Developed deposit process to support register reconciliation
• Increases and Strips entered in POS prior to Recycler
• Established eFund process to ensure business continuity
• Integrated currency and coin solution
• Provided visibility to cash over (short) performance
• Returned $18,000 of vault funds per location to corporate
CURRENCY PROCESSING SOLUTIONS (CPS)CLIENT SUCCESS – Big Box RetailBackground
National big box retailer was seeking a new approach to eliminate its cash room and deploy its resources toward store sales activities