Fifth Third Bancorp is using a range of new cash management technologies, including an Internet-enabled safe it puts in customers' stores, to build up its corporate banking operations.
The cash management services it has rolled out in recent months use technology to "transcend the need for brick-and-mortar," said Patrick J. Moore, a senior vice president at Fifth Third and its director of treasury product management. Related Links
Now a top 20 cash management bank, the $101.4 billion-asset Fifth Third intends to be in the top 10 in all its cash management product lines by 2009, "if not sooner," Mr. Moore said.
One tool it is using is Remote Currency Manager, which it introduced in the second quarter in partnership with a cash logistics company that Fifth Third executives would not name.
The service uses an automated safe that sits in clients' retail locations that has a cash acceptor slot, similar to those on vending machines.
Lisa Tiemeyer, a vice president at Fifth Third and the manager of its receivables product line, said the Cincinnati company has two clients using the currency manager in 300 locations, including a national fast-food restaurant chain that the bankers would not name.
When managers in the local stores put the cash in the safe, the automated device checks the bills' inks and paper to guard against counterfeits, counts the dollar amounts, and transmits the information to Fifth Third.
Fifth Third is able to give the client same-day credit for cash deposits, even though the currency is still physically in the client's store.
The courier service picks up the deposit on a schedule that depends on the location, delivering the cash to its own nationwide network of cash vaults. But "the relationship is with Fifth Third," Mr. Moore said.
This approach allows Fifth Third to provide cash concentration for the customers' corporate offices, even if their retail outlets are located well outside Fifth Third's service area, Ms. Tiemeyer said.
Other banks have access to the "smart safe" technology, she said, but, "I believe we're the only ones who have commercialized the same-day cash availability." "The feedback from the client has been great."
Fifth Third wants to expand the service to other markets, including movie theaters, clothing chains, and other restaurants — from casual dining to white-tablecloth environments.
"We have some aggressive sales goals for next year," Ms. Tiemeyer said.
David C. Robertson, a partner at the Chicago consulting firm Treasury Strategies Inc., noted that many banks already offer merchants credit for their deposits after the funds have been counted in a money courier company's secure cash vault.
Offering credit for deposits once the cash is in the smart safe is the next logical step and "an aggressive, clever way to give them credit," he said.
"It's almost like a provisional deposit," Mr. Robertson said. "That money has already been counted," and the bank could attribute it to the compensating balances that their corporate customers often maintain for cash management services.
Fifth Third has introduced or upgraded a number of other services for business customers this summer, including a thin-client version of is remote capture deposit service Electronic Deposit Manager and an expansion of its nationwide lockbox operation into seven markets, Dallas being the newest.
In June Fifth Third unveiled Escrow Manager, a service for clients in law, real estate, health care, and travel industries. The service gives escrow clients master accounts that have attached subaccounts for their own clients, such as property management companies that must holding security deposits for tenants.
The client can earn interest on aggregated escrow deposits and can distribute a portion of that to its own clients. The service does not allow online self-administration yet, but such a services is expected to be available in a later phase of the deployment, Mr. Moore said.
And Fifth Third has upgraded its online cash management system to function as an integrated portal for clients, rather than a series of individual applications. The multi-functional portal can be used to initiate automated clearing house transactions and account transfers, make tax payments and wire transfers, and stop payments.
"It's the next evolution of our cash management platform," Mr. Moore said.
Fifth Third is also adding new cash management clients to the Account Management and Payments platform, whose pilot-test phase ended in July.
Mr. Moore said the bank is working with existing clients to help them migrate from the legacy systems they are using. "We have a very aggressive plan to sunset those platforms and move them to AMP," he said.
