3 Essential Loss Prevention Controls for Cash Service Vendors

By Mark Lowers,

In today’s integrated financial services system, Cash-in-Transit (CIT) service providers face new challenges in theft and fraud prevention. Traditional approaches to internal controls may leave risky gaps where CIT vendors and their banking customers intersect. Upgrading—and redesigning—these controls so that partners interpret outcomes accurately, and in the same way, is necessary to raise the adequacy of protections against theft and fraud risks.

The Office of the Comptroller of the Currency (OCC) has made it clear that banking institutions are ultimately responsible for the risk management performance of the third party cash vendor services they purchase. Banks cannot simply offload risks to vendors when they outsource traditional banking services. … Continue reading

Understanding the Relationships in the Cash Industry

By Mark Lowers,

cash management industry

Stop for a minute and think about the flow of cash in the American economy.  You almost certainly have some in your pocket or purse right now, and at some point in the day, or the near future you will use it to buy something. Even if you rely mainly on plastic, you will sometimes tap an ATM for cash. Billions upon billions of cash dollars circulate every single day. Most importantly, you, and all parties concerned can easily access just the right amount of cash for their needs.

This miraculous flow of cash does not happen by accident. The Cash-in-Transit (CIT) system—a.k.a. the cash management industry—has evolved to manage cash efficiently and securely. This huge system is ubiquitous, yet many people have never heard of anything beyond “armored cars.” The system actually includes a large assortment of cash management businesses, some of them specialized and others offering a fully integrated package of services that help to keep commercial and retail markets liquid.

The CIT system serves banks, including the Federal Reserve, by providing the transportation, storage, processing, accounting, and other services that financial institutions need to ensure the right amounts of cash get to where they are needed. With the extensive geographic dispersion of branch banks and ATMs, it is no longer cost effective for each and every bank to provide all the cash management services it needs. Today, third party businesses in the cash management system can support multiple banks, including providing a level of risk management the industry demands. … Continue reading