Armored couriers have longed served a valuable role physically transporting cash from businesses to banks. It's not a business the banks themselves have wanted in on, and for good reason given the logistics, vehicles, weapons training and equipment necessary. But over the past 10 years couriers have begun to offer more sophisticated electronic services-such as smart safes-that some bank executives worry strays into their treasury management business.
Huntington National Bank, for one, is fashioning a robust competitive response with the help of a recently released solution from Burroughs Payment Systems (recently spun off of Unisys) called the SmartCash Networked Vault.
Burroughs networked safes record exactly how much currency is fed into the safes. The data is then transmitted to Burroughs' data centers, which at the end of the day transmits the deposit total to the bank. The bank can then post these to customer accounts without receiving the physical cash. Huntington is coupling this technology with its remote deposit capture capabilities to offer a solution that can handle both cash and checks electronically.
For a bank that shies away from the cutting edge, it's a chance to leverage remote deposit capture to forge deeper service relationships with clients.
"Huntington is not typically at the forefront of technology," says Lindsey Scott, a product manager at Huntington National Bank. "But we're taking this and running with it. We've been doing so well with remote deposit capture and this is the natural next step."
The technology offers advantages for customers and the institution, Scott explains. For the customer, the technology posts funds to an account quickly, before it's physically picked up by the courier. This means businesses only need a courier once or twice a week instead of daily, which saves money on transportation and other shipping costs. Plus, the Huntington product will handle checks and cash, unlike the couriers' smart safes, which handle just cash.
Another advantage is being able to offer customers a single bank account for all networked safes. No matter its size and geographic reach, a business can have a single bank account with Huntington instead of managing many bank accounts near its various branches or outlets.
Furthermore, the Huntington product makes it unnecessary for a business to integrate an armored courier's smart safe into its back-office. Since each of the big couriers-Brinks, Garda, Dunbar, Loomis-have their own proprietary systems it's difficult to switch couriers or have multiple courier relationships.
"Having a courier-agnostic solution is a great position for a bank to be in," says Bob Meara, a senior analyst at Celent. "For big retailers in particular it's in their DNA to have multiple courier relationships" in order to negotiate the best pricing. "With a one-safe system you could have as many courier relationships as you want." In addition, remote businesses that aren't served by a big armored courier are free to contract with any local company.
For Huntington a major benefit to rolling out the smart safe network is to expand its treasury management business across the country, beyond its network of physical branches. "It allows us to get outside our footprint," Scott says.
Huntington was at first reluctant to get into the business because it did not want to manage the safe network, which it considers a piece of equipment, not a service. Banks are typically reluctant to deliver physical equipment.
"At first, we saw it as a burden," Scott says. "But gradually we saw the positive side of it."
Critical to Huntington's decision to develop the product is that Burroughs will manage the wireless network linking the safes and also service the physical safes in their individual locations. The managed service runs on a secure data center, certified SAS70 type II.
The safes communicate to the data center through encrypted wireless technology. No network installation is required for the client bank.
Although the product is still in the pilot stage, Scott is optimistic based on anecdotal feedback from prospective customers.
"We've had five businesses clamoring to be included in the pilot," she says. She expects the product will be available for all customers in the third quarter.
Besides Huntington, Burroughs is working with another large bank and 10 smaller banks.