Forget virtual vaults – go vertical, go deep

Important – not always strategic!

All clients are important. But, not all clients are strategic. Let’s talk about that 10 to 20% of your client base that delivers 80% or more of your fee revenue. Setting up virtual vaults to serve strategic clients outside your footprint is important. However, it is a horizontal solution to a geography problem.

We need depth.

You are being challenged to differentiate yourself from competitors. One sure way is to add value beyond basic deposit gathering. You can achieve this by vertically integrating your money room services with your client’s daily operations. The first step is to understand your own capabilities, so you had better plan to spend time with your vault operations group.

Next, consider the client’s store and your money room as part of the same process. Understand how cash, coin and checks circulate into, around and beyond his location. Then, find ways to remove cost. Lots of it! Remember the “Re-engineering the bank” era of the nineties? Banks wanted to reduce costs by 15, 20 and even 25%. Take that same approach on your client’s behalf. You are looking for major savings. Here are some suggestions:

  • Change funds - If your client has added non-standard pay-points such as self-checkout, how does he load cash and coin? Can you tailor the way you deliver change to reduce labor at his end?
  • Deposits - Has his world evolved from traditional cash drawers, to pay-points that produce batches of unsorted notes? If so, perhaps strapping up the deposit is an extra and unnecessary step, provided you have the technology in place.
  • Checks - You probably have him on RDC. Have you secured they checks post-imaging to avoid the embarrassment of having them reappear?
  • Information - Is your technology sophisticated enough to provide information below the DDA level? Can you provide register, lane or even cashier balancing?  If the answer is, “Yes,” then you may be able to help him shut down his cash offices.
  • Logistics - A client whose cash is strapped and accurate might be a candidate for strap- or bundle-bags. Get an agreement to extend the cycle for reporting a difference . . . a couple of extra days . . . and you might avoid verification in your money room, if you intend to use that same cash at a branch. Again, we are looking to eliminate wasteful effort. Your savings might be his gain.

We hope you can find savings that add so much value to your clients, that fee reductions aren’t a consideration. Your client is running lean on labor, and fighting for “capex.” Now is the opportune time to leverage your investment in technology while creating a strong, product inter-dependence.

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