Ever wondered what happens to that money you take from the cash machine, after you pay for something in a shop?
Ken Niven (Divisional President – Cash Services at Group 4 Securicor) knows. He talks to Mark Rowe, in the June print edition of the magazine.
Where thereโs muck thereโs brass, the saying goes, but it might be more to the point to say โthereโs money in moneyโ. Despite credit and debit cards and on-line and so on, cash – and the machines we take it from – remain popular. Ken Niven quotes a figure of the value of cash in circulation rising between five and seven per cent a year. But that cash has to work for its owner. Ken says: โOne of the key drivers is to move cash as efficiently as possible. Our customers get value for that cash. Cash in a bag or a truck or in a warehouse is not giving anybody any value.โ The bank or the retailer whose currency it is wants to put that cash into an account or on the stock market, whatever. Equally, take banknotes in an ATM (automated teller machine). Yes, the bank or building society wants customers to be able to withdraw money; but the financial institution does not want too many banknotes sitting idle. Hence the cash services side of Group 4 Securicor has computer programmes to forecast how much cash is needed, across a bankโs 2,000 or 3,000 cash machines. Not something you think about when you put your card in the wall, Ken agrees: โBefore I joined this company, I didnโt think about it, either.โ
So cash in transit (CIT) is, you can argue, a logistics operation. Before he joined Securicor and entered security, he worked in logistics management: at Express Foods, Excel Logistics and Coca Cola. CIT, you can argue, is a parcels operation, except the parcels may contain £20,000 of notes. The CIT arm of the merged Group 4 Securicor takes cash to the back of an ATM, opens it, and puts the money in. If a machine breaks down – from simply jamming to something more complicated – the ATM owner may contract Securicor to fix it. The security company has some 250 dedicated engineers, controlled from a national call centre, to do such repairs. Ken adds: โWe work to very tight deadlines, because this issue about availability of an ATM is critical.โ
Processing centres, where cash is counted, has been another area Securicor has expanded into. That money you take from the high street or pub ATM and hand over the counter nearby may travel miles, hundreds of miles, before it returns to another ATM. Here we begin to see the cycle of money, from pick-up by the CIT vehicle, it is transported to one of the processing centres around the UK, where it is verified, counted, and assembled to go to ATMs. The all-night work has more to do with the production line of a car factory, say, than banking. In the last four or five years, as banks have sought to out-source what they do not see as core business, banks have passed these processing centres – the buildings and staff – to CIT companies, like Securicor. Mainland Europe banks may learn and follow.
Another arm of Securicor brought to the merged firm is international valuables transport, from Hong Kong, Sydney and London to New York and Los Angeles, moving gold, foreign currency, and increasingly diamonds and jewellery: securely transported to be air-freighted, for the CIT company in the next country to meet and deliver.
Another area Kenโs cash services division is looking to develop is in retail. Take a supermarket with its 30 or 40 cashiers at the front of the store, whose takings now and then go to the cash office at the back of the store, where the CIT staff do a pick-up. Ken asks: why does a supermarket need that cash office? Could the cash in transit company offer some service to take the money to a bank account quicker – and the retailer not only saves on the cost of the cash office, but can use the space for retail? Smaller retails are another opportunity. The shopkeeper carrying the dayโs takings to the bank, or to the local post office the next morning; is there some way to offer, not a full-blown security operation, but something less expensive? and something that avoids the risk of the retailer walking the pavement with a bag of money?
This logistics operation on behalf of customers – with a security wrapper, if you like – comes with risks. As Ken acknowledges, the nature of the product carried means there has to be a secure enivronment at all times. The nature of the product means it (and the staff carrying it) must be protected from criminals. Hence the CIT trucks have been transformed, Ken reports, in the last five years; and premises are upgraded. If necessary, he adds, where the technology is not available, Group 4 Securicor will develop it. Robbery with weapons and violence is consistent with society at large, Ken points out. He says: โItโs a real concern to us, itโs a concern when it impact son our staff. There are occasions when it spills over to affect innocent members of the public … What are we doing about it? Number one, we are investing to makje us less attractive to criminals and robbers. And secondly not just in UK but across Europe we are working with police, in overt and covert operations, to deter and catch criminals. Quite an amazing statistic is that of all the robberies in Europe – it is quite consistent, year on year – against cash in transit trucks, 75 per cent occur in the UK.โ The hot-spots, he confirms, are in the north west (the Manchester-Liverpool corridor); Birmingham – which has seen the quickest growth in such robberies, he adds; and London and the south east. And then there is Northern Ireland, which until five or seven years ago had virtually no CIT attacks, but then came the peace process – the Army came off the streets, police numbers were reduced. Ken says: โWe are certainly having a really difficult time operating there at the moment.โ
Besides these risks, that Group 4 Securicor like any other CIT company seek to mitigate, there are the risks of flood, fire, terrorism, computer failure. Think back to the fuel price protests of 2000. Police were among the job groups deemed essential for fuel supplies, whereas private security was somewhat left out. Security companies and the BSIA lobbied Government so that CIT services (and alarm receiving centres) are โemerency concernsโ and can have priority in an emergency shortage of fuel.
Ken says of risks in general: โWe have very detailed contingency plans for our businesses. Both at macro and micro-level. If our computer systems go down, heaven forbid, because we have some very resilient computer systems, we have plans which can kick into place. If something happened to one of our branches whether fire or flood or something falling out of the sky, whatever, we have documented contingency plans for managers around the country. We are so focused on this, we actually test these; we stop a branch working and then the contingency plans come into play. You can imagine in this sort of environment we have quite large internal audit team. It is part of their remit to work very closely with the business to ensure that we have very robust contingency plans in place.โ
About Ken Niven: based in Crawley. Joined Securicor in 1996 and became Managing Director of the UK Cash Services operation in 1998. A past chairman of the transport section of the BSIA.
