The business of banking has been transformed by technology, so it should come as no surprise that the business of moving money is also undergoing its own metamorphosis because of technology.
The cash transport business, characterized by the heavy-duty armored cars for so many years, is going high-tech, according to Wayne Sadin, CIO of cash logistics company Loomis (Houston). In the future, companies like Loomis will be about much more than simply giving a ride to bags full of bills. Rather, Sadin says it is becoming more important to provide other services around the cash to its bank and merchant customers.
"Walter Wriston was chairman of Citi years ago when it was Citibank. He once said that the information about money is becoming just as important as the money itself," Sadin explains. "That quote has stuck with me. This is so true of our industry. We have all this cash that belongs to banks and merchants and it has been in limbo in trucks because they don't always know where it is."
As a result of the changing needs of his clients, Sadin says Loomis is implementing new services around handling money that are designed to give customers the insight they require. For instance, Loomis offers a product called SafePoint, a secure vault that it claims can reduce cash handling costs and increase security for merchants. "This is an electronic smart safe that is placed in a retail location," he says. "We guarantee the money in the safe by issuing a receipt [after money is dropped inside]."
The company has also worked with its banking customers to develop an expedited deposit credit service that is enabled through the use of the proprietary Loomis CPR web-based cash reporting tool. According to Loomis, this feature allows SafePoint customers to access their funds more rapidly than with traditional secure cash transport services. In some cases, retailers earn credit for their cash before it physically leaves their stores.
Services similar to SafePoint will become a boon for banks' cash management groups, comments Sadin. "Some banks' treasury groups may not operate in all the cities of their retail clients," he explains. "Loomis can install these safes anywhere so that banks can offer this kind of cash processing service. We can become the bank's back room with the virtual vault product."
Sadin also says there is still a great deal of paper involved in the cash transport business. To help cut down on this, he says Loomis is beginning to introduce wireless cellular handheld devices for its drivers. "Our industry wasn't as quick as the in adopting this technology as companies like FedEx because of the complexity of our business. We have very complicated distribution models. [With the handheld devices] all you need to know about the money is done in the back of the armored truck in real time."
At press time, Loomis deployed this to 10 percent of its routes and hopes to have its entire system equipped with the devices by the end of next year. It also plans to introduce more web-enabled services for its customers to help them keep track of their cash. "We have to offer more dynamic services," relates Sadin. "Our clients don't just want a five day a week service. They want us to come when they need us."
"This is just a larger picture of what's happening in this industry," says Mark Clark, SVP of communications with Loomis. "Dominating with your route isn't enough anymore."