How Cash Forecasting Technology Cuts CIT Costs for Banks

The demand for operational excellence in banking has never been greater, putting intense pressure on cost centers like the ATM channel. The main challenge is a delicate balancing act of maintaining excellent customer service levels while simultaneously controlling the costs associated with cash-in-transit (CIT) services.

Common CIT issues that arise include excess idle cash sitting in ATM vaults, costly emergency cash runs to prevent stock-outs and a reliance on inaccurate demand predictions based on simple historical averages. 

Cash-handling expenses are often dispersed across multiple cost centers, such as labor, CIT fees and security, so it’s difficult to derive a precise, universally accepted cost percentage. However, a McKinsey & Company survey revealed that cash management usually accounts for up to 10% of banks’ operating costs, and about 30% of survey respondents named cash forecasting technology as the key strategy for optimizing cash management.

For operations heads, treasury managers and cash management teams, cash forecasting technology represents the fastest path to significant, measurable savings and enhanced ATM network performance. 

The Challenge with Traditional Cash Management 

Traditional cash management is reactive, relying on fixed schedules or basic ‘day-of-week’ averages that create a ‘just in time’ mentality and fail to account for real-world volatility. By loading ATMs with more cash than necessary, CIT costs will be higher as service teams run on fixed, often sub-optimal schedules. 

Significant amounts of valuable cash become wasted capital, tied up inside ATM vaults. Reducing this residual cash improves overall liquidity and frees up valuable capital for investments or other strategic initiatives. Despite the excess cash, unpredictable demand spikes can still lead to cash-outs and frustrated customers, and expensive, unscheduled cash replenishments. 

What is Cash Forecasting Technology? 

The solution to efficient cash forecasting is not to order more cash, but to get smarter about cash logistics. Cash forecasting technology uses sophisticated machine learning models to predict the precise cash demand for every single ATM in your network. It looks at multiple influencing factors such as historical transaction data, analyzing last withdrawals, deposits and holiday service patterns, even forecasting unpredictable weather patterns. 

Advanced analytics identify predictable patterns in cash deposit and withdrawal volumes, allowing banks to maintain optimal cash levels. This minimizes the risk of overstocking or understocking cash, which directly impacts the frequency of CIT services. This predictive capability enables highly accurate cash management, so banks can anticipate future demand instead of reacting to past activity. 

How Cash Forecasting Reduces CIT Costs for Banks 

Implementing an effective cash forecasting system delivers direct, measurable benefits that collectively reduce CIT costs and drive savings, thereby cutting down on frequent, costly CIT operations. 

1. Fewer Cash Runs

The frequency of cash replenishment runs is the primary factor behind CIT costs. By accurately predicting when an ATM will run low, the system enables flexible, demand-driven ATM cash replenishment scheduling. With better visibility into cash positions, banks and financial institutions can group smaller, more frequent CIT requests into fewer, larger and more cost-effective trips.  

2. Reduced Idle Cash in ATMs

Idle cash in ATMs is one of the biggest financial drains on cash operations. Cash forecasting achieves ATM load optimization by accurately predicting demand and ensuring only the optimal amount is loaded. This minimizes the unproductive residual balance, freeing up capital that can be used for core, revenue-generating activities like lending or investments. The overall liquidity is maximized and the return on investment (ROI) from the bank’s total cash reserves is boosted. 

3. Optimized Routing for CIT Teams

Optimized routing moves away from the costly, traditional scheduling, where armored trucks visit ATMs regardless of actual cash levels. Cash forecasting technology eliminates this inefficiency by providing the precise cash position for every machine, generating a daily dispatch report of only high-priority ATMs requiring replenishment. 

This process enables dynamic clustering, grouping service calls by proximity and vehicle capacity. CIT teams therefore only service necessary locations, eliminating stops at fully-stocked ATMs. Fewer unnecessary stops and more direct routes reduce mileage, fuel consumption and critical vehicle maintenance. Labor costs also decrease as less time spent driving means the CIT team can service more critical ATMs per shift, maximizing productivity.  

4. Fewer Emergency Cash Replenishments

Unexpected cash outs force urgent, off-schedule responses, which incur substantial costs for banks. Emergency replenishments bypass all planned efficiency, as CIT providers must reallocate vehicles and personnel from their planned routes, resulting in a premium service fee. These emergency trips are logistically wasteful, typically being single-purpose runs to just one machine. This results in disproportionately high costs for fuel, mileage and vehicle usage compared to efficiently clustered service replenishments. Banks also incur overtime labor costs for CIT personnel and face disruption to their operational schedule. 

By providing highly accurate demand predictions, cash forecasting technology and proactive risk management empower CIT scheduling teams to confidently prevent these costly, last-minute dispatches. 

Best Practices for Implementing Cash Forecasting Technology 

Successful adoption of modern cash forecasting technology requires a strategic alignment of data, process integration and partnership to fully realize the significant savings available through efficient CIT operations. 

• Use Multi-Source Data 

In order to maximize data insights, the cash forecasting model must analyze more than just internal transaction history. A best-practice model incorporates external data points such as weather patterns, local events (like holidays or festivals) and macroeconomic trends. This holistic data approach allows AI algorithms to detect subtle discrepancies in cash flow patterns early on, helping to mitigate risks and ensuring the ATM load optimization is as precise as possible. 

• Integrate with CIT Scheduling Tools 

Cash forecasting technology must seamlessly integrate its AI-driven forecasts directly into logistical actions. This connection enables predictive ordering by accurately determining the precise moment a machine needs cash, eliminating reliance on fixed schedules or manual staff monitoring. The technology automatically generates and schedules the optimal cash replenishment orders, replacing error-prone tasks. These automated orders then feed directly into CIT scheduling tools, which use the data to group service calls and optimize routes. 

• Monitor and Adjust Models Regularly 

Cash demand is dynamic, not static, and it’s constantly influenced by changing customer behavior and market conditions. AI models must be continuously trained and fine-tuned to maintain superior accuracy and stability. Regular performance monitoring and subsequent calibration is critical to proactively manage risk and prevent costly cash-outs. 

• Partner with an Experienced Provider 

In order to maximize return on investment and minimize risk, it’s essential to partner with an experienced cash forecasting provider. An expert partner will offer enhanced accuracy and reliability, transforming cash management from a technical task into a valuable, strategic asset. Their proven technology and expertise should reduce financial risk by flagging potential liquidity shortfalls before they arise.  

The right managed service provider will provide the strategic guidance needed to optimize working capital and enables leaders to make confident decisions about investments and resource allocation. This level of transparency and reliability strengthens stakeholder confidence and ensures your cash forecasting solution remains relevant and effective as your business scales. 

Why Brink’s AMS is a Leader in Cash Forecasting 

At Brink’s AMS, cash logistics is our core competency, and we offer more than just a software solution. We combine decades of cash-in-transit operational experience with innovative ATM cash optimization technology. Our AI-enabled platform, the Brink’s Insight Center, utilizes advanced algorithms and multi-source data to precisely predict ATM cash demands. 

Our intelligent cash forecasting solution doesn’t just predict demand, it integrates into our centralized CIT scheduling and logistics network. This end-to-end approach guarantees optimized loading for maximum cash efficiency, resulting in lower operational costs, fewer, more targeted CIT trips and higher reliability across your ATM fleet. Ultimately, Brink’s provides financial clarity and operational control, freeing up your valuable resources to focus on core services.  

Ready to Unlock Significant CIT Savings? 

Moving to a predictive model is the single most effective action that banks and FIs can take to control their soaring CIT costs, while guaranteeing customer service excellence. By eliminating the opportunity cost of idle capital and removing the expense of emergency runs, cash forecasting technology is an essential cost-management tool that transforms your cash logistics from a cost center into a strategic asset. 

Contact Brink’s AMS today for a demonstration of our cash forecasting solutions and learn how we can optimize your ATM cash logistics.