Innovation in cash handling - IBM · Host C&S Bank SLCC Cash-in Cash-out Retailer Card ... development Interpay Hosting, processing, ... Diebold Hardware Supplier Deposit / ATM unit

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Innovation in cash handling

Ton van SchieC.E.O.

Copyright © Cashferium Europe; 4 September, 2006

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TopicsTopics

About CashferiumMarket analysisCashferium’s innovative conceptPartners, building blocks


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Innovative concept

Cashferium reduces the cost of Cashferium reduces the cost of cash handlingcash handling up up to 50% by creating local cash communities based to 50% by creating local cash communities based on “Secure Local Cash Centres” (SLCC)on “Secure Local Cash Centres” (SLCC)•• PoolingPooling small note, coin issuing, and depositing requirements small note, coin issuing, and depositing requirements

within retail communitieswithin retail communities•• ReRe--circulatingcirculating surplus notes are through ATMssurplus notes are through ATMs

Cashferium improves safety, flexibility, liquidityCashferium improves safety, flexibility, liquidityHow? How? •• Product leadershipProduct leadership•• Optimal mix of machines (efficiency) and dedicated people Optimal mix of machines (efficiency) and dedicated people

(services)(services)•• Sticking to our core activitiesSticking to our core activities


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CashferiumCashferium4 4 foundersfounders’ background: banking, ’ background: banking, cardscards, cash , cash handlinghandling; management, product & business ; management, product & business developmentdevelopment

Cashferium’s core activities: • Smart Business Network Management• Program management (roll-out)• Marketing, product development, sales• Management of Cashferium Security Hosts


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TopicsTopics



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Cash is kingCash is king

……. . and will be so for some timeand will be so for some time•• at least for 1 decade in the 15 ‘old’ EU member statesat least for 1 decade in the 15 ‘old’ EU member states•• at least for 2 decades in the 10 new EU member statesat least for 2 decades in the 10 new EU member states

Cash still grows; if cash were to decrease, the Cash still grows; if cash were to decrease, the need for more efficiency would increaseneed for more efficiency would increase

There is quite some variance in cash usage There is quite some variance in cash usage throughout the EUthroughout the EU

Cash transactions and their related services are Cash transactions and their related services are quite stable en show a high degree of continuity quite stable en show a high degree of continuity


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Technology changes faster than people’s habits and customs; cash is low-techHousehold budget control• Euro cash changeover: increase in cash usage

Person to personAnonymousFree of chargeFeel the moneyWar on cash?


The psychology of consumers regarding cash

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CostCost of cashof cashEPC EPC estimatedestimated EU EU costcost of cash of cash toto bebe €50 €50 billionbillion€32 €32 bnbn borneborne byby banksbanks, €5 , €5 bnbn byby central central banksbanks, , €13 €13 bnbn byby retailersretailers

MeansStaff

Transport

Inventory

02468

101214

banking costs subdivision

incomingoutgoing


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EU, ECB, EPC, and EPC Working Group Cash all strive for EU, ECB, EPC, and EPC Working Group Cash all strive for lower costs of all aspects of paymentslower costs of all aspects of paymentsLocal recycling will be allowed and common EU wideLocal recycling will be allowed and common EU wideSome central banks transfer bank note recycling task (and Some central banks transfer bank note recycling task (and costs) to commercial bankscosts) to commercial banksMost banks consider cash to be nonMost banks consider cash to be non--sexy, nonsexy, non--competitive, competitive, unprofitable, and highunprofitable, and high--riskriskAntiAnti--trust authorities hunt for ‘excessive card profits’trust authorities hunt for ‘excessive card profits’C.i.TC.i.T. markets often oligopolistic. markets often oligopolisticRetailers often dissatisfied with present cash servicesRetailers often dissatisfied with present cash servicesOutsourcing common practiceOutsourcing common practiceStandardisationStandardisation

MomentumMomentum


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Vested interests obstruct real efficiency improvement

BanksRetailers – counter institutionsATM suppliersC.i.T. companiesCard issuers


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Conclusion

Cutting cash costs is banks’ new competitive itemInnovative view on cash processes necessaryA single bank covers its own market share onlyImperative to serve vested parties’ interests


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TopicsTopics



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Typical present day cash cycleTypical present day cash cycle

consumer retailer bank ATM

Central bank

CIT


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consumer retailer SLCC

Process innovation:Process innovation:Closed cash cycle in local communityClosed cash cycle in local community


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retailer bank ATMCIT

Typical present day shopping centreTypical present day shopping centre


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retailer bank ATMCITSLCC

Shopping centre with Cashferium SLCCShopping centre with Cashferium SLCC


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retailer bank ATMCITSLCC

Shopping area with Cashferium SLCCShopping area with Cashferium SLCC


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Cashferium conceptCashferium concept

Business model adjustable to national characteristicsBusiness model adjustable to national characteristicsBank neutral infrastructure, securing banks’ identity Bank neutral infrastructure, securing banks’ identity •• Bank specific look & feel on screens inside SLCCBank specific look & feel on screens inside SLCC•• Bank specific wholesale pricingBank specific wholesale pricing

Bookings via Internet, in SLCC, or by phone of: Bookings via Internet, in SLCC, or by phone of: •• TimeslotTimeslot•• Ink & dye suitcase Ink & dye suitcase •• Security Host for accompanying, or for Security Host for accompanying, or for C.i.TC.i.T..

Best spots and high availability of ATMBest spots and high availability of ATM•• ATM look & feel of a participating bankATM look & feel of a participating bank•• ATM reATM re--installation of participating bankinstallation of participating bank

Surrounding outlets: pickSurrounding outlets: pick--up & deliveryup & deliverySpecialsSpecials


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First SLCCFirst SLCC


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Features of the SLCCFeatures of the SLCCHighly secure due to integrationHighly secure due to integration•• Ink & dye note protectionInk & dye note protection•• Biometric access control plus contact less cardBiometric access control plus contact less card•• Cashferium Security Host present Cashferium Security Host present •• Live link to alarm monitoring stationLive link to alarm monitoring station•• Highly integratedHighly integrated

Highly automatedHighly automated•• Automated depositAutomated deposit•• Automated rolled coin dispensersAutomated rolled coin dispensers•• Automated teller machinesAutomated teller machines•• Internet ordering + by telephoneInternet ordering + by telephone

Low cost (shared infrastructure)Low cost (shared infrastructure)High availability (7 x 24 High availability (7 x 24 -- servicing)servicing)


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Cashferium runs without Cashferium runs without bank’sbank’s ICT ICT changeschanges

C&SHost

Bank

SLCC

Cash-in Cash-out

RetailerCard

holder

Processor


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IntegratingIntegrating functionalityfunctionality, , securitysecurity, efficiency, efficiency

CF Trx. mngr.

Bio/Security/HW

e-spot / c-quilibrium

Customer Contract DB

Interpay

Trx. DB

ATM HW

€-Balance DB

MCH

A D

B

F

G

E

H J

I

Profile DBPlanning DB

C

KCashferium h.q.

SLCC


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TopicsTopics

About CashferiumMarket analysisCashferium’s innovative conceptPartners, response, summary, ambition


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SuppliersSuppliers, partners, advocates, partners, advocates

NVBNVB Dutch Society of BankersDutch Society of BankersRNDRND Council of Dutch Retail chainsCouncil of Dutch Retail chainsMKBMKB Council of Small and medium CompaniesCouncil of Small and medium CompaniesAKDAKD LawyersLawyersYield, WPMYield, WPM Real EstateReal EstateMSOMSO Independent Service ProviderIndependent Service ProviderMCHMCH Rolled Coins, Rolled Coins, C.i.TC.i.T..IBMIBM System integrator and System integrator and -- developmentdevelopmentInterpayInterpay Hosting, processing, switching (+ C&S)Hosting, processing, switching (+ C&S)MacTwinMacTwin Security AdvisorsSecurity AdvisorsMCAMCA Security Components (Honeywell)Security Components (Honeywell)EE--Spot (B)Spot (B) Cash Stock Optimising softwareCash Stock Optimising softwareDateqDateq (B)(B) Hardware Supplier rolled coin dispenserHardware Supplier rolled coin dispenserDieboldDiebold Hardware Hardware SupplierSupplier Deposit / ATM unitDeposit / ATM unitGielissenGielissen NeonNeon Builder of SLCCBuilder of SLCCCarcabanCarcaban Developer of first SLCCDeveloper of first SLCCKPNKPN VPNVPN


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First First prospectsprospects and and customerscustomers ((NlNl.).)

ABN AMRO BankABN AMRO Bank

ING PostbankING Postbank

SNS BankSNS Bank

Fortis BankFortis Bank

Albert Heijn (Ahold)Albert Heijn (Ahold)

M&S Fashion M&S Fashion

((MAXEDAMAXEDA))

Xenos (Blokker)Xenos (Blokker)


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Solution: true process innovation

Connecting retailers, consumers, banksClosed cash cycle, pooling of all cash requirementsOptimal mix of integrated technology and dedicated stafServing vested parties’ interests:•• banks: no investments whilst cutting costs; no threat; less banks: no investments whilst cutting costs; no threat; less

risk by reducing and eliminating cashrisk by reducing and eliminating cash•• retailers: lower costs, higher liquidity, flexible services, retailers: lower costs, higher liquidity, flexible services,

higher degree of safetyhigher degree of safety•• consumers: high availability ATMsconsumers: high availability ATMs•• C.i.TC.i.T.: more technology, more short rides.: more technology, more short rides•• realreal--estate investors: upgrading shopping centres’ valueestate investors: upgrading shopping centres’ value

11stst roundround of of fundingfunding completedcompleted


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SLCC’s

6

299

1,002

2,127

3,351

4,688

5,012


Ambition

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Cashferium improves (local) communities‘

safety, flexibility, liquidity, and profitability,

however, whenever, and wherever needed,

through (assisted) cash services,

with integrity and reliability,

responsibility and intelligence.


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Cashferium, innemend en uitmuntendCashferium, at your service

www.cashferium.comCopyright © Cashferium Europe; 4 September, 2006

Documents

Innovation in cash handling - IBM · Host C&S Bank SLCC Cash-in Cash-out Retailer Card ... development Interpay Hosting, processing, ... Diebold Hardware Supplier Deposit / ATM unit