Cash in a crisis - is your bank able to cope?

By : Cleopatra Mavredis

May 18, 2017 12:00 PM

Developing an effective cash management process can be a complex business. You need to think carefully about what locations need to be prioritized and how you can deliver cash in a cost-effective manner so ATMs never run dry, without spending more than necessary.


But what do you do when events out of your control mean your carefully-constructed plans have to be thrown out of the window? In situations such as natural disasters or other crises, access to cash will be more important to consumers than any other time, so banks will need to have contingency plans in place.


The need for cash in a crisis
Whether it's flooding, a hurricane or an earthquake, natural disasters that disrupt infrastructure and take down power grids can create serious problems for services such as payments. In these times, people will need urgent access to essentials such as food supplies, but merchants may be unwilling or unable to accept payments forms such as credit and debit cards in these circumstances.


Therefore, cash is the obvious answer. Ron Delnevo, executive director, Europe, at the ATM Industry Association, noted earlier this year: "In such cases, cash offers residents a way to purchase items to meet their urgent needs. It also gives local businesses a way to recover from the impact of the disaster."


Cleopatra Mavredis

NCR Europe Self-Service Channel Management

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Cleopatra Mavredis is NCR’s Global Marketing Manager for Channel solutions and has more than 20+ years of experience in the ATM industry. NCR’s channel solution portfolio is comprised of APTRA Vision, Inetco Insight and OptiSuite solutions.

However, he noted that at present, there is no systemic industry approach to the provision of cash in crisis areas. As there may be up to 250 incidents every year as a result of natural and man-made disasters, it's not an area banks can afford to neglect.


But getting cash to where it is most needed can prove challenging in itself, and will require close attention.


Meeting the challenges
This is a problem that can afflict any part of the world, as was seen recently in the aftermath of the large earthquake that struck New Zealand in November. The quake destroyed many roads, leaving some communities, such as popular tourist destination Kaikoura, completely cut off.

As a result, it was reported that banks faced significant difficulties getting cash to these locations. While chief executive of the New Zealand Banking Association Karen Scott-Howman encouraged people in the affected areas to turn to solutions such as internet and mobile banking to make payments wherever possible, she added it is also a good idea to keep cash on hand for emergencies such as this.


"If road access isn't possible, banks may not be able to replenish branch and ATM cash supplies immediately. Banks are monitoring this closely and will look at other ways to get cash in if necessary," she said.


Kaikoura was left without phone and broadband connections in the wake of the earthquake, however, so turning to digital payment options may not be possible in every circumstance.


Banks, meanwhile, have enacted contingencies to help affected customers. A spokeswoman for Westpac, which has a branch in Kaikoura, said its team would be on hand to process cash withdrawals in-branch and technical teams were working to ensure access to ATMs was available after hours.


The recent New Zealand quake should therefore serve as a reminder to any bank that operates in areas vulnerable to natural disasters of the importance of having contingency plans in place. These need to include cash distribution, maintaining and recovering network infrastructure, and how branches can be kept open to service customers in the event of a crisis.


Cash continues to remain the world’s most trusted and fastest form of payment, providing that security that is needed in times of crisis.