The future is digital!

Coinage is a product which breaks even at Stadtsparkasse Magdeburg

2017-12-14 – For many financial institutions, coins still mean great effort: retailers lining up at the bank, stressed staff at the counter, manual processes prone to error and high costs for processing coinage. All these challenges are a thing of the past at Stadtsparkasse Magdeburg.

Stadtsparkasse Magdeburg has steered cash money out of the red thanks to an innovative digital model. Corporate clients of Stadtsparkasse Magdeburg can now easily order their coins via the bank’s website. Following an initial, free-of-charge registration, the clients log onto the online portal and simply place their orders. It also works from mobile devices such as smartphones. After prepayment, the clients receive information on the delivery status via e-mail. They can then pick up the coins at a branch of their choice or have them delivered to their stores by DHL.

The clients are satisfied. Waiting at the counter has become a thing of the past. Now, they receive their prepaid unopened packet of coins in a fast and uncomplicated manner. The Sparkasse staff no longer have to handle individual rolls at the counter or have discussions with the clients about the fees.

How does this work? Kirstin Kretschmer, Cash Manager of Stadtsparkasse Magdeburg, explains the process, “The retailers order the rolls in any denomination online via…. They transfer the sales price to the recipient’s account specified in the online portal. Our cash-in-transit company, which is also digitally connected to the system, loads the coin packs and delivers them to one of our five branches. Of course, the order can also be delivered via DHL at an extra charge to be paid by the customer. If the online order is placed by 10:00 am on a bank business day and payment is received by 12:30 pm on the same day, the coin order is available for pick-up within two bank business days. The coinage is handed out to the customer upon presentation of the order confirmation and an identification document. The order may also be picked up by a representative in possession of the order confirmation and written authorization by the purchaser. This way, the representatives of a retail chain can obtain the package reserved for them as well.” About 80 percent of the clients pick up their coins directly at the branch. Commercial customers in more remote locations tend to prefer the DHL service.The ordering of coins has not only become significantly easier for the clients but also for Stadtsparkasse Magdeburg which has automated the consistent fee income.

A clear description of the processes at Stadtsparkasse and the collaboration with ALVARA Cash Management Group AG from Leipzig represent the technological backbone of this solution. The team around company chairman Bernd Hohlfeld developed the innovative ALVARA ChangeExchange platform, which brings together those offering coins and those looking for them in an online platform – easy to use and available around the clock, even outside the opening hours of the bank. Banks, service providers and retail companies were presented with a sustainable perspective for the cash cycle and therefore an alternative for an efficient, cost-effective coin supply. Thanks to the ALVARA ChangeExchange, which was tailored to the strategy of Stadtsparkasse Magdeburg, 100 percent of the costs are covered. The savings bank can determine its scope of services offered through the ChangeExchange as well as the respective prices. The pressure on the counter staff has been reduced by the introduction of standardized processes. Kirstin Kretschmer concludes, “The collaboration with the ALVARA team significantly advanced our efforts to digitalize cash management. Initial customer feedback has confirmed that we are on the right track.”

As a result, the digitalization of processes became an important step towards reducing costs and providing more customer service in coin processing. This development benefits all stakeholders, from the consumers at the store, who still mainly pay cash, to the bank. Stadtsparkasse Magdeburg broadened its horizon and mastered the balancing act between customer satisfaction and cost reduction by optimizing and simplifying processes as well as integrating an innovative digital solution.