Cash Management System for Central Banks

Top level of cash management in every county is associated with work optimization of national banks who operate as regulatory body and sometimes as market constituent.

Due to the specifics of legislation and regulation, the structure of the organization and the process of managing cash circulation can differ significantly.

1. Centralized model

National Bank is a crucial part of the national cash distribution cycle. It operates through its branch network as a main storage, processing, and distribution center. The Central Bank is present and controls the entire cash circulation cycle. This model is mainly used in developing countries.

2. Joint venture model

A joint venture is created between the national bank and commercial bank. Both sides also act as shareholders. This joint venture deals with all aspects of trade and logistics of the national currency, thus optimizing operating costs. This model is often the main direction for the further development of cash circulation in developing countries. 

3. Partial delegation model

The National Bank delegates certain cash handling operations to affiliated contractors. Authentication, sorting, as well as the distribution of cash for the commercial sector (commercial banks, merchants, and collection services). Currently, a significant number of countries in the world use this model for partial outsourcing of their activities.

4. Full delegation model

Commercial banks and independent CIT companies take responsibility (and cost) for all transactions. The National Bank is not present in the money supply cycle, except for the processes associated with the issue and control of the disposal of banknotes and coins. The countries of the Eurozone, as well as the United Kingdom, Norway, and the United States, operate approximately in this model.

Activities of National Central Banks in cash circulation

To organize and control an effective cash circulation in the country, the central bank needs to control and set optimal operating rules for all cash circulation cycles. Cash Management software allows companies to optimize the logistics and supply chain, working capital, surplus cash, which leads to a decrease in the financial costs of national banks and commercial banks.

Tasks of Central Banks for cash flow optimization:

  • Improving the organization of cash circulation;
  • Planning, forecasting, and optimization of cash flows;
  • Improving the organization and planning of transportation;
  • Improving the organization and planning of cash processing and storage;
  • Reducing the cost of organizing and maintaining cash circulation;
  • Generation of the optimal list of denominations for each cash point;
  • Introduction of new technologies;
  • Counterfeit protection;
  • Improving the cash management services of banks;
  • Control of the processes and participants of the cash circulation

Each cash circulation project, requires a complete cash management solution, software, and hardware capabilities to handle the tasks. Cash Management in banks is a crucial part in the optimization of human resources, cash circulation expenses, and improves the overall risk management by providing various real-time monitoring and forecasting tools.

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Cash Management.iQ modules

CashPoint Analytics.iQ – cash reporting module

CashPoint Analytics.iQ is a module of the Cash Management.iQ, which is responsible for generating, displaying, and exporting reports from each point of service as well as achieving key performance indicators and other aspects of integrated cash logistics.

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CashPoint Monitoring.iQ – real–time cash monitoring

CashPoint Monitoring.iQ is the main module of the Cash Management.iQ system, which provides the functionality of monitoring the cash status and cash demand forecasting. The estimation of cash need is based on accumulated historical data and CIT simulation tools.

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CIT.iQ – management of Cash-in-Transit operations

CIT.iQ provides management of the cash collection service for the CIT (cash-in-transit) staff, assignment of tasks, selection of routes, and accounting of all costs associated with operational activities (labor costs of employees, fuels and lubricants, depreciation of transport) for planned and emergency trips.

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Vault.iQ – cash center management

Vault.iQ is a separate module of the Cash Management.iQ platform. It allows financial institutions to monitor all cash inflows and outflows in the connected cash center. In addition, Our vault cash management software (Vault.iQ) ensures a two-way cash flows between central banks and service end-points.

Cash flow management tools also allow organizations to get accurate forecasts, for further cash automation. Our software ensures the effectiveness and transparency of cash center operations.

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Cash Order.iQ – cash service handling tools

CashOrder.iQ planning module helps to determine the optimal number of banknotes (currencies and denominations) for each self-service device. Besides the calculation of the optimal number of banknotes, it helps to calculate the frequency of ATM cash replenishment processes, place orders for the transportation of cash and other valuables (securities, precious metals, etc.) either in manual to automatic mode.

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Points of Optimization

Reducing the number of CIT visits

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Cost of Cash Optimization with Cash Forecasting Software

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ATM Cash Availability with Cash Monitoring System

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Excellence of Cash Supply Chain Management

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Levan Bukhaidze

Deputy Head of Retail Business Management Department, Basis Bank, Georgia

Irakli Lomidze

Head of Operational Support Department at TBC Bank (Georgia)

George Makatsaria

Head of Treasury Department at BasisBank (Georgia)

During the first two months of using CashPoint Monitoring.iQ, we were able to reach 25% of savings on rent of the cash. Besides, the solution allowed us to save internal resources (first of all, staff). In order to monitor and analyze cash supply chain using the Cash Management.iQ solution, one cash professional needs to work only for two hours a day.

The bank receives information about cash balances at ATMs from the processing center. The frequency of data transmission can vary, but this information is not enough for the optimal cash distribution to ATMs and CIT planning. For these purposes, TBC Bank uses Cash Management.iQ solution.

Cash Management.iQ software solution provides us the information on cash balances in ATM’s in real time, which allows us to more accurately plan the time of cash collection and  cash optimal amount by ATM’s, as well as to reduce logistics costs.