3 minutes
How Lake Trust CU self-sufficiently manages branch, ATM cash usage to identify new member opportunities and increase its bottom line.
In the comprehensive regulatory environment that exists today, there are—surprisingly—no specific cash management regulations for credit unions. As a result, branch managers and staff are given almost complete autonomy for the cash ordering process—the management and handling of what is, in effect, the credit union’s largest non-earning asset.
Left to their own devices, credit union staffs often rely on historical cash use to analyze and forecast future needs. However, doing so without an implemented system to identify cash amounts based off actual member needs, wastes valuable credit union resources, capital and time that could be spent increasing the bottom line and offering new member opportunities, such as cross-selling.
Lansing, Mich.-based Lake Trust Credit Union, a $1.6 billion credit union serving more than 164,000 members in more than 20 communities stretching from Lake Michigan to Lake Erie, required an accessible and standardized cash management software that increased efficiencies and was easy for branch employees to learn and navigate. Previously, each Lake Trust CU branch submitted its own cash orders to the Federal Reserve Bank, intensifying the difficulty of effectively managing the cash ordering and receiving process without constant branch manager monitoring.
Some of the CU’s branch staff were already familiar with CetoLogic’s C³ Financial, a Web-based branch, ATM and vault cash management software solution, notes Yvonne DeGasperis, coordinator of member service support. The knowledge of these staff members helped ease the learning curve when the software was rolled out to branch teams.
“C³ Financial eliminated the need to manually enter cash balances,” DeGasperis says. “Now all branch employees, no matter which location, are aligned and operating the same way from the same centralized system.”
The clarity of C³ Financial’s graphical representation of cash management data proved beneficial in accelerating the system’s adoption and effective use by Lake Trust CU employees. While the process is centralized for efficiency, individual branch data is still available to help understand usage patterns.
“The charts and graphs within C³ Financial enable our branch managers to easily identify peaks and valleys in the day-to-day branch ordering process because of the data downloaded directly to the software from our core processor,” DeGasperis says. “Human error is mitigated and the quality of data is better, enabling us to see where our ordering could be improved, where dollar amounts are excessive and which branches are doing well with recommendations.”
Human error is mitigated because the cash-ending data is automated between Lake Trust CU’s teller platform, DNA from Open Solutions, Glastonbury, Conn., and C3 Financial. Prior to Lake Trust CU using the automation feature, cash-ending data was keyed into C3 Financial, increasing the likelihood of human error during data entry.
The reliability of having a central place for the credit union’s cash management operations has increased each branch’s efficiency, day-to-day cash ordering and deposits.
From implementation in 2008 until 2013, Lake Trust CU branches utilizing C³ Financial experienced a 22 percent cash inventory reduction. With the addition of eight branch locations in 2013, Lake Trust Credit Union experienced an overall additional 8 percent reduction in institution-wide cash levels. Cash is a credit union’s largest non-earning asset. Any reduction in cash levels has provided Lake Trust CU with assets to invest into its local community or with additional funds to invest into their portfolio. Keeping less cash on hand also lowers credit unions’ risk.
With C³ Financial, Lake Trust CU employees reduced time dedicated to cash management from 60 minutes a week to one individual spending an average of 21 minutes a week, CetoLogic estimates. The CU also has experienced more than $8,800 per year in cost savings from this time reduction, according to CetoLogic. Plus, the reduction in time spent on cash management activities has enabled branch staff and managers to dedicate more time to ensuring a positive branch experience for its members.
David Austin is vice president of Atlanta-based CetoLogic, a provider of software and analytics solutions for financial institutions and retailers. For more information on CetoLogic, call 877.495.0687.
