Whether or not cash has a future has been the subject of much debate in recent years. However, it is clear that coins and bills are still very popular in Germany. As a result of the closure of bank branches and the abolition of numerous ATMs, one question has become more and more pressing in recent months: Is the supply of cash sufficiently guaranteed at all? In 2023, the Bundesbank made a clear commitment in this regard: Yes, it is!
Facts: fewer bank branches and ATMs
According to the industry association BVR, Volks- und Raiffeisenbanken have reduced their number of ATMs by around 1,800 from 2021 to 2022. At the same time, bank branches are thinning out their network. A good two years ago, one in ten branches was facing closure. According to the Bundesbank, this will be followed by the closure of a further 1,266 branches in 2023. The situation is the same for all of them: whether savings banks, cooperative banks or major banks such as Commerzbank and Deutsche Bank – they are all closing the doors of individual branches.
At first glance, these figures seem alarming and suggest a poor supply. In fact, however, the Bundesbank has clearly communicated this year that the supply of cash is assured despite the minimization of financial institutions and the reduction of ATMs. This is because a good 96 percent of Germans have a bank branch or access to an ATM in their place of residence. At the same time, a large proportion of the representative population survey rates the effort required to obtain cash as low or very low, according to the findings of the Deutsche Bundesbank’s January 2023 Monthly Report.
Diverse and close – access to cash
To access the average 100 euros for their own wallets, which is used to settle a good 58 percent of daily payments in Germany, most people still resort to ATMs. The sharp decline in recent years has not led to a loss of importance of ATM withdrawals. According to the monthly report, just over 80 percent of respondents still withdraw their money from ATMs. 11 percent go to the bank counter to get their hands on cash.
However, cash withdrawal options have also expanded in recent years to include an option that the population is now more willing to accept. This refers to cash withdrawals at the store checkout, i.e., directly at the point of sale. In 2017, only 2 percent took advantage of the retailer’s offer, according to Deutsche Bundesbank data. Four years later, the share rose to 8 percent. To get to a withdrawal point of any kind, most people do not have to travel a great distance, as assumed. . This is because almost 80 million citizens, or over 95 percent, travel an average of just 1.6 kilometers to do so.
Cash supply: Efficiency needed in the financial sector
The Bundesbank’s representative study clearly shows that the population is not lacking anything in terms of cash supply. At the same time, however, the preference for coins and bills is not just an established standard. Rather, the social value is high and cash will not disappear any time soon due to unrestricted participation and protected privacy, which cashless payment methods have so far not been able to guarantee beyond doubt.
That’s why it’s also worth looking at the other side of the coin. After all, the provision of cash usually entails considerable costs and additional effort for banks. In order to be able to ensure the supply of cash and at the same time not reach their own limits, those responsible must develop strategies in good time. The focus: cost-efficient and transparent processes, optimization of cash inventories, reduction of transport costs, and efficient management of cash logistics.
Our Interactive Cash Control platform (ICC), for example, creates maximum transparency for the entire cash cycle and enables control and documentation between all the players involved – saving time, security, and resources in the interests of the environment.
All our products for forward-looking cash management for financial institutions can be found here.
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