The London Olympic Games are expected to attract 5.3 million visitors to the UK capital over the summer. Some other visitors may stay away of course, but the overall figure is expected to be up and the demand for cash across the city has already changed as crowds have flocked east to the Olympic Park and deserted traditional shopping areas in the West End. The London Olympics present quite a logistical challenge therefore for banks, ATM service providers and others in the cash supply chain, as hordes of locals and tourists alike dig deep into their pockets to fund travel, food and souvenirs. Bob Partridge, Fiserv’s sales supremo in the cash and logistics arena for Europe, Middle-East & Africa (EMEA), explains the challenges.
This year’s Olympics are supposed to be the world’s first ‘contactless’ cashless Games, but it is not so easy to get rid of cash as recent events at Wembley Stadium proved when those attending the Olympic football tournament couldn’t buy half-time refreshments with their cards.
One of the major sponsors of the Olympics, Visa, is working hard to make attending the 2012 Games less cash dependent. It is using the occasion to promote contactless and mobile payment options and showcase the possibilities of Near Field Communication (NFC) technology. The company has also removed 27 ATMs from Olympic venues and replaced them with just eight Visa-only cash machines, meaning that some venues will have no cash points at all.
This policy backfired, however, at Wembley Stadium when 80,000 spectators on were left unable to pay by card on 29 July, with just two ATMs between them. The importance of having access to cash came crashing into the spotlight, and the crucial role of keeping cash machines effectively supplied was once more reinforced.
The 2012 Games are having a significant impact on London’s cash flow and distribution infrastructure. The Olympics is not only putting particular pressure on the ATMs on the immediate periphery of the ‘Visa cashless zone’, but also across London as a whole, as people seek to stock up ahead of entering ‘cashless’ areas. More people are visiting unfamiliar locations too as crowd flock east towards the Olympic Park and the huge new adjacent Westfield Stratford shopping centre, changing cash demands and typical ATM refilling routes across the capital.
Coping with the Games
UK banks have had to respond to these changes in demand and intelligently forecast cash requirements in order to optimise their cash holdings and maximise cash availability for customers. This has been achieved by addressing the dynamic supply chain requirements of supplying, managing and transporting currency across multiple cash points and locations. Careful management is helping banks ensure that cash, a non-earning asset, is just plentiful enough and not sitting idly.
In anticipation of extreme cash demand and eager to avoid the potential reputational risk that could come with running out of cash, banks are carrying out more regular cash deliveries to ATMs to bolster supplies. The logistical supply chain for all industries in London has been impacted by travel restrictions and increased traffic during the Games and cash delivery to ATMs is no exception. Indeed, the potential implications of a lack of available cash are so serious, that the inability to refill cash machines with money was one of the ‘high level wargame’ scenarios played out by 87 firms in London in November last year in preparation for possible shocks to the financial services infrastructure.
The logistics around cash deliveries have had to be carefully planned, taking into account the 49 ‘lockdown venues’, which completely restrict access on a number of routes into and around the main Olympic stadium and other official hotspots. Banks have had to develop strategies to work around these restrictions, organising for deliveries to take place at night and building in significantly increased security measures to deter criminals who may seek to take advantage of the more predictable cash travel times.
ATMs have also undergone some physical modifications to increase their cash-holding capacity. Most ATMs hold 2,000 notes per cassette, depending on the location and strategy of the ATM deployer. However, some machines adapted ahead of the Games now hold more notes and upwards of £160,000 at the time of replenishment.
Many banks have been undergoing preventative maintenance of ATMs before the Games. A few months ago, for example, UK and Czech Republic based ATM supplier TestLink had already reported an overall 15%increase in ATM parts sales as service providers strived to ensure that high levels of ATM availability are maintained for both UK and international guests during this busy time. In the majority of cases, this maintenance will have been carried out remotely offsite, to rule out the possibility of would-be fraudsters tampering with machines, via the installation of card skimming devices for example.
With all eyes on London, banks cannot afford to fail to service the millions of customers who will depend on them for cash provision. The UK retail banking industry has already suffered enough reputational damage this year with the week-long RBS IT failure and the Libor scandal so getting cash provisioning wrong during the Games was not an option. Financial institutions are continuously challenged to ensure that a growing number of cash points – including branches, vaults, ATMs, smart safes, and other automated devices are stocked with optimal cash levels and continuously available. Never before has the need to adopt a holistic and integrated view of the currency supply chain been so firmly in the spotlight. So far, so good is the interim report half-way through the 2012 Olympics.