Articles


Industry 4.0 and the Secure Logistics Sector

Industry 4.0 and the Secure Logistics Sector

Industry 4.0, the Internet of Things and Cash Management – A future of new opportunities?

As an inquiring member of the cash management family with more than my fair share of connections in research and consulting I get to enjoy the experience of being approached by research parties looking for information on industry trends and initiatives. This year it is clear that the concepts of the Internet of Things (IoT) and Industry 4.0 have taken root in the general consciousness and furthermore that our cash management sector is active in looking at what these trends might mean for us.

The Industry 4.0 analogy is a very accessible one, bringing a historical perspective as well as clarity to the definition of what is now driving big changes in the world of commerce today. The introduction of technical developments in cyber connectivity and data utilisation are causing business leaders and innovators around the globe to reappraise their views on the value of information and the methods in which data can be harvested and how value can be drawn from it. As retail giant Tesco’s Chief Data Scientist, Clive Humby, is credited as saying back in 2006, “data is the new oil”.

For anyone not aware of the Industry 4.0 concept; the current phenomenon of heightened data utilisation is placed as the fourth in a series of technological advancements made by humanity since the 18th century which have propelled modern civilisation through the journey of industrialisation. The previous three being the harnessing of power through mechanisation (ie steam or water power), the development of mass production techniques for mass production and the invention of computer technology and subsequent automation.  Each had fundamental impacts on humanity, principally the advancement of knowledge, capability and wealth.



Connectivity or IoT is the reality of asset control and understanding, on a mass scale and with minimal effort. The upfront benefits begin with information capture and improved network management, but the permutations and consequential benefits are only limited by our imaginations, so the theory goes.

For decades the exponents of Six Sigma, the manufacturing-originating discipline of data analysis as the source of continuous improvement, have pointed to the value to be gleaned from data generated from production lines, test facilities and field performance. The challenge has always been in how to access the resulting benefits in a cost-effective way through Management Reporting without seeing a mushrooming in administrative costs.

The development of data mining and the processing/analysing of that data (“data warehousing”) over recent years has advanced what is practically feasible in turning acquired information into usable Management Information, or effective decision-making analysis. With most machines now capable of producing data as an ever-present by-product, the potential to turn a perceived waste into something that can add value is alluring.

Most significantly the modern developments in data handling and analytics have now transformed the landscape in what is possible with this data and with this, the efficacy of data management has advanced in tandem with the capacity to data mine enabling businesses to run their everyday activities  with data based decisions more than ever before.

This is just as well, as the explosion in data generation is quite awe-inspiring. In the decade between 2009 and today the volume of electronic data in existence has increased 44-fold, from 0.8 zettabytes to 35 zettabytes. Scary to think that a zettabyte is 1 billion terabytes, and contains the equivalent information as 85 newspapers for every person on the planet; however one tries to imagine it, it is a truly vast number and one that is growing exponentially.

At this point I imagine you have at least two questions; how do you extract meaning from this data in a commercial way and how can this help in the cash management sphere?

As said above, the value-add stage of asset connectivity and other aspects of IoT is effective data analytics and those operating in this market define three key tools for harnessing “Big Data”; OLTP (on-line transaction processing), OLAP (online analytical planning) and RTAP (real-time analytics processing).

There are dozens, if not more, established providers of these infrastructures (IaaS, infrastructure as a service) and applications (SaaS, software as a service) to provide the necessary expertise to bring value to your business. Often requiring bespoke development with the client, these providers open up possibilities for revenue growth, cost reduction and other benefits.

IMS Evolve are one such SaaS provider to the cash management industry. Their EV platform monitors ATM status’ for a number of household names in banking and transfers real-time machine status data for 35,000 ATMs to monitoring teams worldwide. Tellingly the system’s primary value is in capturing redundant information jettisoned by other vendors and using it to determine more accurate and quicker responses from service maintenance teams.

According to George Porter, Head of Evolve Productivity, where EV has been introduced machine fault-to-fix times for “second line maintenance” calls has reduced by an average of 5 hours per incident. Maintenance operations using EV have reported increased productivity of their engineers of over 100%, enabling savings of 20%+ in expenditure.  Needless to say, the impact on machine uptime has been significant.

This example highlights one of the ironies of this emerging industry; that in many cases the all-important and valuable data already exists. The key to adding value has been to challenge the existing paradigms of what available information might be useful for and then working with the data warehousing industry to work out how to collect, filter and trend it is a format for the user’s decision-making.

What is also illustrated by the EV example is the capacity for application partners such as IMS to drive service enhancement and cost reduction for business, driving real value from available data. However the area of greatest interest for most business leaders is probably revenue growth, and therefore the data management industry is very focused on their product development in this area.

Marketing and advertising are front-of-mind for B2C businesses and we can all relate to how Facebook, Lazada, Amazon and others have sophisticated models for extracting data from their businesses and using it to drive sales and other revenue streams. For B2B sectors, potential revenue benefits come in different ways.

In the Logistics industry the prospect of using real-time data combined with dynamic planning capabilities is opening up opportunities throughout the market. Anyone who has ordered an Uber knows that the service price varies according to demand at the time and service availability. This concept is equally utilised by Amazon and any number of despatch services from DHL to Tesco on-line. As a result revenue growth is possible beyond the levels achieved with standard pricing structures.

A second revenue growth opportunity depends on connecting CIT crews to the business’ network in real time through simple user interface apps. Through this technology CIT crews are able to feedback data on customer behaviours that cause service delays, service creep (where ad hoc requests are added to the service) or other chargeable items can be effectively caught and presented to the billing team in a timely manner. Data analytics and back-end MI generation can ensure trends are picked up and corrective actions through contract changes or operational adjustments help drive the business forwards.

Opportunities for cash centre business are also numerous. Most operators recognise the vast amount of data already generated through the daily reconciliation process; cash stock levels, ATM return values and deposit sizes. However in many organisations this data is rarely analysed beyond the needs of reconciliation, and even less frequently is it presented in real-time and to departments outside of the accounting functions.

With the emergence of RTAP capability, decision-making information can be extracted and made available to management quickly enough for plans in resource and service delivery to be adjusted accordingly. Where central banks have implemented fund transfer mechanisms into the sector, this technology can cut hours or days from the existing, correspondent-based processes, presenting the banks the opportunity to take value out of their “on-book” floats.

The development of these new capabilities has a further benefit, as it can provide material for new propositions to be forged with the region’s regulators, providing concrete evidence of the values of currency management outsourcing and the decentralisation of traditional central bank activities.

Perhaps this is one of the greatest opportunities presented by these new technologies for our industry; that they create the context and demand for new services and products from the banking industry, thereby ensuring our relevance is regenerated in line with customer expectations for future years.

It seems more and more clear that we are on the cusp of another technological leap forward in the history of industrial man with Industry 4.0. The question for everyone is, how do we extract value from the new fuel that lies behind it – data.


Anthony McAndrew is the Principal Director of Astute Outcome Asia Sdn Bhd., a Malaysian company focused on using emerging technologies to bring value to the industry.

Read More
The future of Cash Management in South East Asia

The future of Cash Management in South East Asia

Taking Cash Management to the next level – is now the right time?

It seems impossible to open up/log on or switch on any media today without receiving reports about the demise of cash. It is well understood by our industry that the often reported benefits of moving from cash to ePayments are a smokescreen for the principle reasons of transaction transparency to authorities and reduced costs for the central and commercial banks, but the overwhelming message to the public is that cash has had its day.

To a pessimist it would seem that all business dependent upon cash is in a twilight phase.


Cash In Transit and its less physical cousin, Cash Management are, by nature, conservative souls. The processes and tools used to conduct the daily operations of collecting cash and counting cash have, not really changed much in the past couple of decades for many local or even regional businesses. Even the recognisable MNCs can be frustratingly slow at acting on known solutions to long-standing constraints and this might be explained by some common reasons –

  • When it comes to security management the approach is often “if it isn’t broke, don’t fix it”. Where personal safety is at risk, conservatism is understandable. However there is a tendency for a similar attitude to creep into areas of operational management which can stifle innovation.
  • Investment in new technology can feel like a leap of faith. Often board level management finds it difficult to reconcile the value of the necessary  investment with the SME Millennial-generation representative who is pitching the idea in front of them. As the adage goes, you only buy from people you like or trust. Both require a degree of personal empathy, and this can be hard to establish if there is no common ground between parties.
  • Today Cash in Transit tends to be commoditised in this region. The reasons for this are many; the relative power of the main customers (the commercial banks), market dominance by a few giants and commercial inexperience of company owners might be considered three significant ones. Consequently margins are low and customers do not expect innovation from providers.

Fortunately our industry is blessed with many people with the foresight to see opportunities where others see limitations. From my own personal experience I can report that there seems more interest in developing new business solutions for handling and processing cash than ever, from parties both within and outside of the industry, and I expect to see a number of market entrants into the Cash Management markets in the coming months.

How is it that some can see opportunity in this space, when the prevailing winds appear very much to be blowing against efforts to grow profitably in this sector? The answer is apparently in technology.


You would need to have been living on a remote island in the middle of the Pacific Ocean to have missed the developments in communications over the past decade or two. The universal connectivity that we all have with our smartphones, the arrival of “smart-cities” and the establishment of powerful data-mining software may have their origins far from our industry, but the possibilities these developments bring to the Cash Management industry are valuable.


Here are a few developments that are on the drawing board of a number of cash management organisations and that are made feasible by this communications revolution: -

  • Smartsafes. The use of Smartsafes is perhaps not as innovative as some in this list. A number of commercial banks have used Cash Deposit Machines in their bank foyers for a number of years to try and take physical deposits away from the tellers.  However the interesting advancement being pushed now is to connect the Smartsafe’s data files with the Cash Management company’s systems, creating a Utility-style depositing models which provides a low cost deposit option for SME retailers and the benefit of scale for the cash management company. Key to this service is an interactive programme linking customer to cash management provider for instant updates and scheduling.
  • As an alternative to traditional “walk to bank”, this opens up a bigger section of local retail to cash management services, enabling a growth in the market which outstrips present growth rates.


  • Cash Orders/Floats. As the commercial banks continue to distance themselves from the tasks of physical cash handling retailers are challenged with how to supply their outlets with low denominations and change. A recent study for a central bank in this region highlighted the issue that coin circulation is not functioning. One of the stated reasons was that the population “hoard” the coins they receive and retailers don’t receive coin as payment, and that the central bank is forced to pump new coinage into the economy to prevent a drought of change.  Ironically the same country sees commercial banks actively withdrawing from the task of supplying coin to retailers on demand making matters worse. Supplying low denomination notes and coin as a cash management company is now possible with the emergence of app-based dropboxes for the likes of Amazon and the confidence the public now have in electronic security, it must only be a matter of time before retailers can collect their daily float from a controlled environment and a smart-locker.


  • Dynamic Planning. Some years ago the supermarkets started home deliveries and established a new generation of algorithms to predict, plan and optimise these deliveries. Now Grab, GoJek and other sharing-economy giants have further evolved these programmes to establish highly flexible logistics models that optimise demand through charging flexibility and minimise waiting times. It would be fair to say that nearly all of the CIT industry is still to catch up with these developments, in this region certainly. In Netherlands one CIT company has launched a collection model borrowing much from the planning developments mentioned above, although they do still use their own staff to collect (!)


The successful adoption of these or other technologies into the Cash Management proposition has a double benefit. Not only can they improve top line, middle line or bottom line results for your business, but invariably they add value to the customer experience. With that comes an enhanced relationship and a move away from the commoditisation of your service.

Now may be the best time for your CIT business to push forward with new, connectivity based solutions.

Anthony McAndrew is the Principal Director at Astute Outcomes Asia Sdn Bhd, a consultancy house focused on providing innovation and efficiency to the Cash Management industry.

Read More