Managing cash to help you serve the millennial market

By : Cleopatra Mavredis

January 03, 2017 09:30 PM

Good cash management is always important for banks, but it becomes absolutely crucial over the busy holiday shopping season. ATM usage and withdrawal amounts rise in the weeks and months leading up to Christmas, and are likely to stay high well into the new year as shoppers head to the post-Christmas sales to spend their Christmas cash.


Research has suggested that millennials in the U.S. are particularly reliant on ATMs for their holiday shopping, so getting your cash management strategy right could prove crucial to satisfy this demanding demographic group.


Millennials 'most likely to cash'
Millennials in the U.S. are more likely than their elders - generation X and the baby boomers - to rely on cash for their holiday shopping. That's one of the possibly surprising findings in the 2016 Consumer Holiday Shopping Report from NerdWallet. The personal finance website surveyed more than 2,000 U.S. adults and found that 60 percent of millennials - those who were approaching adulthood around the turn of the century - planned to use cash for their holiday spending and 56 percent were set to use a debit card.


Furthermore, millennials were found to be the least likely to buy gifts with major or retail credit cards. Just over four out of ten (42 percent) had plans to use this payment method, compared with 55 percent of baby boomers and 50 percent of gen Xers.


Overall, the proportion of Americans planning to use cash for seasonal spending this year has dropped by six percent from 2015, but is still around half (49 percent), which translates into extremely high demand for ATM withdrawals. More than four out of ten consumers (44 percent) surveyed by NerdWallet said they will spend $500 or more this Christmas, while 11 percent anticipated spending over $1,000 on gifts.


Courtney Jespersen, the site's retail expert, noted: "There seems to be a real discrepancy between what shoppers think about holiday shopping and what they actually do when they shop. Drawn by the allure of sales, consumers shell out considerable amounts of cash during this time of the year."


Other reports have highlighted ongoing demand for tried-and-tested payment methods, particularly in the US. Accenture's 2016 North America Consumer Digital Payments Survey found that 60 percent of consumers use cash to make purchases at merchant outlets at least once a week. Nearly two-thirds (64 percent) of respondents had never used their mobile phone for an in-store payment, and 37 percent of this group said they felt no need to because cash and plastic were perfectly adequate for their payment needs.


Getting the ATM experience right
Given the ongoing importance of cash to so many consumers, delivering the best possible ATM experience is instrumental in keeping your customers happy, which contributes to brand loyalty and advocacy. The ATM is often the first and most frequently used touchpoint for customers, so it's crucial to get the basics right. That means having enough cash in branches and across your ATM network to meet demand, without overstocking. This applies, of course, both to consumers but also to retailers who also need to ensure they have the right amount of cash to pay out returns and even to provide the correct change.


Having a dedicated cash management solution in place can prove invaluable in this regard, to anticipate demand, manage peaks, and avoid over-stocking during less busy periods, through the use of a combination of advanced algorithms and historical data. These services can also deliver targeted analysis for individual cash points, as well as useful tools such as pre-emptive alerts to avoid painful cash outages.


As the ATM is on the eve of its 50th birthday, it continues to be the single most important point of contact for any financial institution. Continuing to innovate in order to deliver an excellent service of the ATM channel demonstrates to your customers that their bank values your patronage. Some existing ATMs are so reliable that modernizing and upgrading your network might seem unnecessary, but in our ever-changing, digitally focused world, it won't take long for customers - especially millennials - to notice if your technology is standing still.


Innovations like contactless withdrawals, touchscreen capability and video banking all have a big part to play in the ATM channel in the near future. These technology advancements help to accelerate and secure the actual transaction, but at the end of the day, 99 percent of consumers who use an ATM are there to withdraw cash, so what happens behind the scenes is equally as important as maintaining a clean and approachable ATM.

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.