An Outlook on the Cash Center of the Future
What direction should the development of the cash center take if it is to survive in a dynamic, digital environment that is constantly changing? It needs to become an intelligent, secure, and efficient hub that informs the entire currency cycle and designs it to be future-ready. In the following interview we talk to Wilfried Rill, Head of Cash Center Solutions, and Ralf Rüben, Head of Sales Cash Center Solutions, as they explain what roles and solutions G+D Currency Technology will implement to achieve this.
Mr. Rill, Mr. Rüben: In the ideal scenario, the cash center of the future is highly automated, internally and externally networked, and as a consequence, efficient, transparent, and secure – but is this ideal image actually realistic?
Rill: It is as realistic as all of Industry 4.0. The Internet of Things is no longer a remote future prospect. As in many areas of the economy, connectivity is now sufficiently advanced that it is almost taken for granted. This is influencing innovation cycles too, so now we face an important question: Is the general trend moving towards increasingly short cycles for cash centers and central banks as well?
And what is the answer?
Rill: To us, it is obvious: There must be value-stable, secure processes running in the background. The main task of every central bank is to ensure that the currency cycle, along with all of its participants, is both secure and stable – from the cash center to the CiT stage, nothing less. Following the very latest Industry 4.0 hype is not what we’re interested in. We are developing successful automated solutions for the long term; solutions that will prepare the cash center – and with it the currency cycle – for the decades ahead.
In digitalization terms, five years is an eternity.
Rüben: No doubt. However, long-term thinking does not exclude the possibility of flexible, short-term responses to market and customer requirements. On the contrary, when we develop an automated solution or a piece of software today, we already take innovation cycles into account during the design, planning, and development phases. We know that technology cannot and must not stand still; we are mindful of the need for regular updates.
Rill: In other words, we think in terms of solutions, not machines. And in the context of every solution, we need to be sure that we acknowledge, in the present, the future of the cash center, and that we make people aware that the currency cycle, with all of its participants, is always moving. This dynamism is not something to be feared – we should be making use of it.
We see ourselves as a bridge between innovation and dynamism on the one hand, and value-securing, stable institutions on the other.«
What does that mean in concrete terms?
Rüben: It involves making a clear commitment to digitalizing the cash center with the knowledge that doing so will present some great and some small challenges for all parties involved. In this context, we see ourselves as a bridge between innovation and dynamism on the one hand, and value-protecting, stable, mature institutions on the other. It will only be possible to span the gap between these two sides if we emphasize, honestly and clearly, that automated processing, IT, and connectivity in 2030 will be completely different from what they are now in 2019. The goal here is to be shaping the way overall development happens, not to be driven by it.
What are the fundamental driving forces behind these dynamics?
Rill: Transparency, efficiency, and security. Transparency, which we create through a high level of automated processing, with results delivered in real time; transparency that means knowing at the touch of a button and in real time what is happening in the cash center – and what is not. This is easier to map automatically than manually. Efficiency that arises by allowing for even closer integration of the individual cash center into the currency cycle as a whole. And our top priority is, of course, security.
Is the cash center of the future as secure as the cash center of today?
Rill: The cash center of the future will operate in a changed environment, and will need to communicate, organize, “produce”, and transport differently. As such, it needs to be observed and understood within its respective ecosystem, along with the challenges which that ecosystem presents – that is true today and in the future. Our core task is to shape the functionality, security, and efficiency of a cash center and to guarantee that it is ready for the future. That applies in 2019 just as much as it will in 2030 or 2069.
Rüben: Trust is a key factor here. It’s annoying if a bar of chocolate goes missing in a confectionery factory, but it is not the end of the world. If a banknote goes missing in a cash center though, the issue is not so much to do with monetary damage as it is a loss of trust. Which is why a higher degree of automation within a cash center means a higher level of security and resultant trust.
So more automation means higher security?
Rüben: Broadly speaking, yes. To put it in even more simple terms, transporting five percent returns is far more secure than having to move ten percent returns from A to B. That is a small example, but the principle continues right up to the implementation of software solutions, which not only increase process security in the cash center, but can also monitor, analyze, and interpret the entire currency cycle using software products that are already in our product portfolio, and which can be expanded on a modular basis.
Improved communication can help to make exchange within the overall currency cycle system more secure and more efficient in future.«
Rill: That is why I would put “improved communication” alongside “increased automation” as the only way we can make exchange within the overall currency cycle system more secure and more efficient in the future. This is something we can do using solutions appropriate to the growing data volumes generated worldwide on a daily basis, and firmly anchor the cash center to this increase in data.
We take this approach because increasing digitalization and improving data security will shape the hardware we use in the cash center in the future, and influence it in the long term. To this end, we are working closely with Research & Development to ensure we can adapt our hardware components to suit customer and market requirements including the area of data intelligence.
What does that mean in practice?
Rill: In the ideal case, it means that currency cycles will be covered in real time by the cash center – i.e. that cash will be available at the right time, in the right form and in the right place. To illustrate the point: During Hajj, the annual Muslim pilgrimage to Mecca, huge amounts of rials are exchanged in a rather small geographic area. This means that across a few days, Saudi Arabia’s currency cycle is focused on a clearly defined region, and a cash center needs to be aligned to cope with that.
What is needed to achieve that?
Rill: Tools and solutions that allow you to integrate with the overall system as closely and efficiently as possible. These are huge challenges, and it is virtually impossible to organize and implement them manually. Today, we offer that more or less at the touch of a button, meaning that cash centers can respond to external requirements, and maintain communication. Where these dynamics – in Mecca or elsewhere – become predictable, a major burden is lifted from the shoulders of many decision-makers.
You might also say: Keep an eye on the big picture, but focus on designing the details?
Rüben: Exactly. Today, the currency cycle involves a wide variety of players with diverse products and services for a huge range of sub-sectors. Is there one provider who can offer everything you need from a single source when it comes to cash handling? No chance. To offer this, you need to be a holistic solutions provider, and you need a clear path – a path that we have paved and which is now bearing fruit. What we can do is simply unsurpassable in terms of completeness.
Rill: We can draw on an extremely broad base of specialist knowledge, which enables us to enjoy a precise overview of the software, plant and equipment, components, and services needed to keep the cash center competitive and fit for the future, and so to continue shaping it as such. The first step of course, is to identify pain points, or missing pieces in the currency cycle “puzzle”.
And that will carry the cash center into the 21st century and beyond?
Rüben: We are putting the individual pieces of this puzzle together in such a way that we can identify an overall picture. And we see that the cash center of the 21st century is externalizing itself. And that’s not all. A cash center that has been tailored towards clarity, efficiency, and security will inevitably also help to optimize the entire currency cycle.
We want to maintain flexibility within the currency cycle and at the same time create opportunities for innovative planning and increasing efficiency.«
Is that something we can put into concrete terms?
Rill: Yes, let’s take route optimization as an example. If there is a need to reserve a larger CiT fleet – and as such, more capital – on a “just in case” basis, this results in less efficient working. We can see this in the currency cycle today; it is common practice and causes stress for all involved. It happens because actions are not clearly predictable, and “surprises” within the currency cycle crop up time and again. We do not want to eliminate flexibility within the currency cycle. However, we do want to create further opportunities for innovative planning and leading to increased efficiency.
Rüben: Today, we can already see that traditional models are continuing to merge on an increasingly widespread basis, creating new structures but also necessitating them. For example, if commercial multi-bank cash centers are to be implemented as an efficiency measure, these solutions require an innovative and secure framework. The cash center is influenced by a wide variety of forces, which we want to channel, use, and steer in the right direction.
Rill:The cash center is where the entire currency cycle more or less converges – it is, after all, the defining element – and that will continue to be the case. However, the center is the node, the hub to which everything is connected, where exchange occurs and from which everyone goes their own way. That also means that if we optimize the node itself, the benefits will radiate to each individual party involved in the currency cycle and therefore also to the currency cycle as a whole.