Cash to fund branches and ATM locations is a large noninterest earning asset, but managing that lifecycle can be a complex task. Some credit unions often keep too much cash on hand, more than 20% on average, which can cut into investment opportunities, according to Atlanta-based CetoLogic, a software and analytics services firm.
"As investment rates and long-term interest rates begin to ascend, it is critical that credit unions tap into their balance sheet to identify non-earning assets such as branch and ATM cash," said David Austin, vice president of CetoLogic, adding implementing a vault cash management tool reduces cash levels by an average of 15% to 25%, and cash delivery costs are pared by about 15%,
By using CetoLogic's C3 Financial, a Web-based cash forecasting application, the $810 million Credit Union ONE in Ferndale, Mich., has streamlined the cash management process for its 17 branches, said Cathy Burnham, a finance specialist at Credit Union ONE.
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