Branch Automation/Retail Banking and Cash...
Transcript of Branch Automation/Retail Banking and Cash...
REVIEW SEMINAR 2014 COLOMBO
TAN CHEE MENG
Branch Automation/Retail Banking
and Cash Recycling Trends
Branch Automation/Retail Banking and Cash Recycling Trends
Branch Automation
Bank Branch Density
TAU (Teller Assist Units) Density
ATMs
Recycling/Recirculation
Case Studies: A Big US Bank, Scotiabank
Source: RBR
172
174
176
178
180
182
184
186
640,000
660,000
680,000
700,000
720,000
740,000
760,000
2003 2004 2005 2006 2007 2008 2009 2010
Branches (left axis) Branches per Million Inhabitants (right axis) 743,000
Current recessionary economic environment may lead to branch rationalisation
Number and Density of Bank Branches Worldwide (C25)
Branch Density
South Africa: 61 branches / mill. pop.
Spain: 934 branches / mill. pop.
743,000 branches (C25) 2.3 million tellers (C25)
Source: “Global Teller Assist Units 2011” by RBR
USA: 319 branches / mill. pop.
Branch Density end 2010
Branch Automation
What are these? ATM, CDM, Deposit accepting ATM,
Recycling ATM VTM iTM TAU- TCD, TCR Universal Teller
New Branch Solution - China
Nautilus Hyosung Confidential 6
Teller-less branch with full function ATM including video banking
Smart Branch’ - Korea
Woori “Twenties Woori” Shinhan “S20”
Hana “Smart Zone” Busan “Smart Square”
Nautilus Hyosung Confidential 7
ATM with debit card issuing function
New Branch Solution - US
Nautilus Hyosung Confidential 8
Self-service ATM with coin dispenser to eliminate ordinary teller work
Traditional Branch Open-Plan Branch
Routine transactions
Security barriers
Cost centre
Advisory services and sales
No security barriers
Commercial profit centre
Source: RBR
Branch Transformation
Branch Transformation
General trends in retail banking:
More convenience and better service across channels
Number of branches growing
Characteristics of the branch and role of the teller evolving
Cash in circulation increasing
Cash handling costs (including security) significant and increasing
Source: RBR
TAUs
Drivers for TAUs: Improved Security- a safe with time delay lock Efficiency Gain- faster transaction, less waiting time Accuracy- counting & authentication ROI- cost saving, customer focus & product sales Resource rationalization- free up tellers Regulation- on security of employees & cash
Mexico: 2 TAUs / 100 branches
Spain: 99 TAUs / 100 branches
164,000 TAUs (C25) 1.6 million ATMs (C25)
Source: “Global Teller Assist Units 2011” by RBR
USA: 38 TAUs / 100 branches
TAUs
0
50,000
100,000
150,000
200,000
250,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Recyclers
Dispensers/Acceptors
Dispensers
164k
TAU Installed Base Worldwide (C25)
217k
112k
Source: “Global Teller Assist Units 2011” by RBR
TAUs
TAU installed base 2003-15 (C25) TAU shipments 2011-15 (C25)
0
50,000
100,000
150,000
200,000
250,000
2003 2005 2007 2009 2011 2013 2015
Dispensers Dispensers/Acceptors Recyclers
53%
19%
28% New Installations
Replacements:Migration to Recyclers
Replacements: Like forLike
118k
80%
19% 1%
Recyclers
Dispensers
Dispensers/Acceptors
118k
49% 73%
14%
Source: “Global Teller Assist Units 2011” by RBR
TAUs- Dispensers vs Recyclers
ATMs The future of ATMs is good:
Ubiquity- 2.8 million units at public locations Ease of use- trusted and well-known Universal- can access anywhere in the world Lower overall costs- ATM is cheaper than teller
even in China
ATM growth- snapshot
ATMs Globally, 2012 Asia Pac accounts for 41% of world’s 2.6 million ATMs and grew by 13%
Cash Recycling Trends
Local Cash Recycling Self-service- Recycling ATMs Teller- TCR Retailer- POS solutions
Local Recycling Trends
Dynamics of Recycling: Increasing cash demand – average 6% a year Central banks delegating to the commercial
sector Need to cut cost– transport (collect & refill) &
sorting, space
Technological advancement – affordable detectors (fitness, authentication & OCR)
Corporate Clients
New notes
New & Fit notes Commercial
Banks CIT
Unfit & Excess notes Include unprocessed
CIT
• Transport
• Store • Transport
Collect
11 BNM Centres
BNM HQ
Before 1997
ATM &
CDM
P U B L I C
Corporate Clients
New notes
New & Fit notes
Commercial Banks
CIT
Unfit & Excess notes Include unprocessed
CIT
• Transport • Store
• Process • Store • Transport
Collect
Recycle
6 BNM centres
BNM HQ
After
ATM &
CDM
P U B L I C
Collect
Behavior of the Costs with Recycling
Holding costs
Moving costs
Total costs before
Total costs
Cos
ts
Average shipment size
©2012 Secura Monde International Ltd
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Example: 30% of cash is recycled locally
Max annual cost of a viable recycling solution
Recycling Trends
Two Types of Recycling: Direct or Within-Device Recycling Indirect or Manual Loading on site
Recycling
Local Recycling Trends
CONCLUSIONS • Decreasing equipment prices leading to more
convincing business case • More Central Banks are moving to delegated
model - we expect supportive legislation to promote recycling
• There is likely to be an increasing regulatory requirement at least to authenticate recycled cash - but unclear how it can be enforced