The Sparkasse Barnim reduces its expenses for coin management with the help of an external service provider.
Coins are an expensive matter for the banking industry. As the number one point of contact for the retail sector, regional institutes in particular often have to bear high costs. Checking, sorting, counting, rolling, and storing coins costs money, and there are also protocol processes. Expenses and benefits often do not have an economic ratio when it comes to personnel and resource allocation.
The Sparkasse Barnim in the northeast of Berlin also faced this problem. The medium-sized regional institute with a balance sheet total of about 1.8 billion euros moves and processes up to 90 tons of coins annually – with an increasing trend. Therefore, it was important to significantly optimize the existing process since every coin is ultimately handled at least twice.
Previously, coin management at Sparkasse Barnim followed a classic pattern: All coins were collected from the branches, then centrally checked, sorted, counted, and rolled. The demanded rolls had to be sent back to the branches, and the surplus to the Bundesbank. Although the Sparkasse had a fee regulation for this service, the amounts were often not charged at the teller counters because, in the complex process chain, this would often have meant additional administrative effort. At the same time, there were generally too many loopholes in the system that allowed customers to avoid the coin fees.
Against this background, the produced coin amounts were also rather sporadically and incompletely recorded. Another enormous effort: the rolls were in the vaults at the branches, which employees frequently had to open to fulfill customers' requests. In total, there were several reasons to restructure the coin management.
Platform solution changes processes and supply chains
Sparkasse Barnim opted for a new approach, which quickly led to success from the house's perspective. With the help of the "MünzMarktplatz" coin management solution from the Leipzig service provider ALVARA, customers place their coin orders via a platform. A cash handling employee accepts open orders until 10:30 AM and prepares the desired coin packages for transport. Customers can select these in the coin portal, such as a defined kit, individual rolls, or entire roll packages – subject to the corresponding funds receipt that includes the equivalent value and fees.
The shipping method can also be freely defined: If customers wish for postal delivery, this is carried out up to a transport sum of under 500 euros and a weight of up to 32 kilograms via DHL. If a customer wishes to pick up their coins in the branch, a delivery from a security service provider to the Sparkasse is considered. This is especially true for deliveries whose transport sum is greater than 500 euros and heavier than 32 kilograms. The in-house cash handling together with the security service provider takes care of preparing the coin rolls and coin packages. The security provider collects the coins deposited by customers in coin deposit machines or safebags from the Sparkasse branches and prepares them according to the coin orders via the portal and the money orders from the branches.
The introduction of the new solution did not proceed without concerns and challenges. After all, it is never easy to design existing processes in a completely new form. Initially, for example, there were problems with the DHL interface, which could be resolved. Meanwhile, the demand for using the MünzMarktplatz continues to grow and proves to be noticeably worthwhile. While a cash roll costs a few cents more at the counter, it only costs 15 cents in the coin portal. This means that customers also save cash directly.
The combination of recycling and direct sales with a revision of the house-specific fee collection contributed to Sparkasse Barnim noticeably reducing the remaining effort for coin management.
Overall, the new solution successfully addressed inefficiencies in cash handling. At Sparkasse Barnim, the number of instances involved in coin processing and accounting could be reduced – as could the coin amounts to be returned to the Bundesbank as surpluses. The recycling system and direct sales played a key role in this, as they could reduce storage processes and cash inventory management. The expanded sales and logistics channels, such as new service areas for the commissioned security service provider, are also advantageous. Lastly, this enables Sparkasse Barnim to react more flexibly to market demand and minimize the costs associated with coin management.
Author Wolfgang Kohl is a Cash Manager at Sparkasse Barnim.
Author Bernd Hohlfeld is a board member of the Alvara Cash Management Group, Leipzig.
– Published on February 27, 2019, in the Sparkassenzeitung online –