Most bankers have never been in their main vault. They know it exists; after all, money is the essence of their business, their true commodity. But a grave misconception exists about the vault and the services provided there.

Some bankers do not realize the true production aspect and profit potential of the vault.

The truth of the matter is that the vault is very much a production environment, much like a factory. Storage of cash is merely one aspect of a vault.

Large commercial deposits are delivered directly to the vault. Once the deposits have been verified, the cash is combined, then repackaged. Thus, the vault manufacturers packages of money.

Commercial customers also require cash shipments to meet their daily operational requirements. Each type of business has unique needs, and those needs may vary over time.

Sophisticated Technology

Processing these large volumes can no longer be done the old-fashioned way. Therefore, currency counters are as much a requirement in the vault as personal computers have become for the bank's auditors.

Currency counters have become quite sophisticated, ranging from the smaller tabletop versions to the high-speed models that resemble proof machines. They can detect counterfeit and mixed bills.

Entire cash-vault systems are available now -- systems that capture each deposit bag at the receiving point (based on a unique, assigned bag number). Each bag is then assigned to a specified teller, who is responsible for processing the deposit.

Cash is verified through currency counters, which transmit the totals to a computer. Coin is verified through a coin sorter.

The computer tracks all the cash verified by denomination to the customer's deposit slip and balances the deposit. If there is a difference, the system prints a customer notification, specifying the difference by denomination and type of error.

Push-Button Ordering

The vault system has a shipment aspect, as well. Communications required for a customer to place cash shipment orders with the vault are now automated much as customer-service inquiries are. Customers are given unique authorization codes to place orders verbally, using a push-button phone.

Once the customer places an order on the telephone entry system, the information is printed on an advice instructing the teller on amounts of each denomination to send to that customer. The same advice is used to charge the customer's account.

All the deposit processing and cash shipment information is retained in the master file so that at day's end the vault manager knows exactly how much cash he holds, by denomination.

If a dispute or discrepancy arises involving a particular deposit or cash shipment, the information needed for research is readily available on-line.

Multiple Advantages

The benefits of automation are numerous. Those specific to the vault environment include:

* Time is saved by replacing the manual logging of information, which in turn reduces chances of error.

* Efficient cash inventories are easily maintained.

* Cash limits are more effectively controlled.

* Excess cash reserves are minimized; overnight investment opportunities, maximized.

* Multiple customer cash shipment orders may be placed simultaneously. Vault systems have the ability to handle eight to 10 incoming phone calls.

* Regulatory requirements, such as currency transaction reporting, can be met more easily. Vault systems not only monitor exemption limits but also can print the required regulatory forms and make automated tape feeds directly to the Internal Revenue Service.

* Profitability reports are produced to analyze how profitable customer relationships are or to help find how to increase a customer account's profitability.

Of course, vault systems salespeople argue that their systems' speed and efficiency will enable the bank to cut its vault staff by as much as 50%.

However, the big gains don't come from cutting vault staff but from expanding the bank's commercial customer base.

After all, large commercial customers may need other services -- lockbox, automated clearing house, wire transfer, or multimillion-dollar loans.

Yes, some initial capital expenditure is required. But this must be weighed against potential revenue gains.

KATHRYN G. ARMEY Assistant vice president NationsBank Corp., Dallas

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