The Role of AI in Modernizing Cash Processing: What You Need to Know – Jamie Cockerell [Season 2 | Episode #29]

Shaun Ferrari 00:00:33 Hey everybody, welcome to the Pit Exchange where we talk about the latest in payments innovation and technology. I’m your host today, Sean Ferrari here with Currency Research. And I’m thrilled to be joined by Jamie Cockerell, managing director at ECM, Enterprise Cash Management. Jamie, good to have you. Good to see you.

Jamie Cockerell 00:00:54 Great to be here. Thanks so much for inviting me.

Shaun Ferrari 00:00:56 Yeah. No. Lovely to see you. I think the last time we saw each other, where we were in Bali, I think,

Jamie Cockerell 00:01:04 We were at the, cash cycle event in Bali, which was a great event and an awesome location.

Shaun Ferrari 00:01:10 Yeah, it was a it was a fun location.

Shaun Ferrari 00:01:13 definitely warm and tropical. And we had a lot of good discussions. It was, I think, I don’t know if it was good content or everybody wanted air conditioning, but I think the, I think the general sessions were thoroughly enjoyed by everybody.

Jamie Cockerell 00:01:28 They definitely were. I mean, having the benefit of sitting on one of them, running a panel and stuff like that, it was you could just tell that people just were really engaged in what was being discussed. So, so, you know, a great event, that one.

Shaun Ferrari 00:01:40 Great. Well, thank you, sir. maybe before we get going with some of the things you’re working on currently, you could tell us just a little bit about ECM. where you guys came from, what you guys are focused on, and, we’ll go from there.

Jamie Cockerell 00:01:52 Yeah, sure. So, ECM or enterprise cash management? we’re a software company that provides, secure cash supply chain technology to the industry. it’s one of these things where. And I’ve been in the industry for 30 years, in an ECM has been around for almost longer than that, actually in various forms, but only really been standalone as identifiable independent company in the last two and a half years.

Jamie Cockerell 00:02:20 So we were prior to being separate, we were part of the CPS group of companies. and prior to that part of De La Rue. and so throughout our history, we’ve always serviced the bulk cash handling market. but as we became as we left, Deloitte became CPS. It was become very, very apparent that a manufacturing and a software organization operate in very, very different ways. So even when we were part of CPS, we were we were running a separate, separate, separate manner. And then in December, 22, January 23rd, we were actually separated out from the business completely and now run as an independent software company. we picked the name ECM. You could argue it was lazy. you could argue it was just simple marketing. our product is called ECM Enterprise Cash Management. So we thought, well, why reinvent the wheel? We might as well just name the company ECM. So, that’s where we started.

Shaun Ferrari 00:03:20 Great. And as as part of that, you must have you must have seen a lot of changes over the years.

Shaun Ferrari 00:03:28 I mean, as you say, you’ve been been with various companies, different flavors of of what you’re doing, but now you’re really focused on that software angle. and and tell us a little more maybe about that like specific focus that, that your, your company works with because you’re, you’re still related. I think some people are like, well, you’re still related to the CPS thing, but you’re a separate company. So maybe just a little more about your particular aspect.

Jamie Cockerell 00:03:53 so so we were always so right in the very, very early infancy, the software we produce. We started life as. As a small piece of software, there to collect data from processing machines and present it in a relatively simplistic fashion. And over the years that branched out and became more and more. starting with simple reconciliation, until the position where we are today, where we’re looking at the entire supply chain. So right from point of origin, that could be a printworks. It could be at a retail outlet right through the supply chain.

Jamie Cockerell 00:04:28 So from that retailer as it as the we talk a lot about cash, but actually it could equally be any other secure valuable as well. but as the banknotes the currency the coin is moved through transit, through track and trace into the cash vault and cash processing operations through all those steps as well, and then either into storage or back out into circulation or destroyed. and so the software technology we build is, I guess, sort of layered, the first layer being a secure inventory platform. So it’s, you know, it’s not baked beans and, and groceries. We’re, we’re, we’re managing here. So it is it needs to be a secure platform overlaid with an accounting platform, because with every financial movement there is an accounting movement that goes with it. And there’s an element of customer relationship CRM on top of that as well, because for many of our customers, their clients want to see an insight into what’s going on. So, so there’s a there’s a lot of elements of customer facing, end customer facing technology built in as well.

Jamie Cockerell 00:05:29 And that’s what makes up the the platform. it is true. We used to be very, very closely.

Jamie Cockerell 00:05:35 Aligned with media.

Jamie Cockerell 00:05:36 obviously being part of the same company that was I guess there was an inevitability of that. Although the majority of our customers are actually customers of other hardware providers are not actually customers of CPS at all. more recently that relationship has shifted and changed. So we are hardware agnostic. there are benefits to being partnered with with an equipment manufacturer, because you get a greater depth of understanding of how the machines work and the data they can produce. But also I can influence their, their, their sort of path they’re going down to make sure it’s going to fit the agenda of us and our customers. but we’re not now, connected in any other way. So we are we are independent. So they are a partner of ours. but, from an operational perspective, in all other aspects, we now operate separately. and that, I think has been a bit of a it’s been an eye opening experience for us as we moved further away from manufacturing, we’re able to work more like a software company.

Jamie Cockerell 00:06:41 and as a consequence of that, we’ve been able to look at the market and see where other gaps in the market were beyond just machines and what machines needed and arguably beyond just inside the cash operations and so on. We’ve been able to look outside the cash operations. and a lot of our investment in the early cycle of being UCM was, ploughed back into that wider, wider cash visibility. So, and we’ve done a lot of work in the last, in the last two years on cash visibility. So, helping our customers, whether they’re central banks, commercial banks, armored car companies, invisibility of what’s going on, not just inside their own operations, but also outside, through partners that they’re working with, etc.. And I’d say that’s one of the big, huge trends is the cash visibility trend. I mean, we’ve seen that with with initiatives in the United States. There are other countries who’ve got similar initiatives as well. Garner, for example, are pushing a big cash, visibility initiative, as well.

Jamie Cockerell 00:07:47 And there’s a lot more traction behind that sort of sharing of information, as much as wanting to secure the foundations through technology as well.

Shaun Ferrari 00:07:56 Yeah. So on that sharing of information piece, I think one of the things that always I know from the discussions you mentioned, the the work going on in the US and other countries around the world. you know, data is obviously a huge piece of that. and obviously, if you’re if you’re owning and running the software that captures all these different points, you’ve got the data. But I’m just curious, is there how has that journey been in terms of getting all of the different customers data and joining it up with the central bank’s data and kind of getting it into that visibility kind of package? I would imagine there’s all sorts of maybe not technical hurdles, but, hurdles along the way of doing that.

Jamie Cockerell 00:08:38 I mean, there’s definitely hurdles. I mean, you’ve got to have, a community of willing participants. Right. So, so, you see this in a in a sort of micro level.

Jamie Cockerell 00:08:48 So we do a lot of work in South Africa where the commercial banks have largely outsourced, not exclusively, but a lot of them have outsourced their cash processing to commercial providers. But with that came the mindset from the very beginning. We want to know what’s going on. We want to understand what you’re doing in the name of the bank, and we want to understand where our cash and inventory is moving. And in that example, they each one created their own little version of cash visibility, where they agreed technical standards with their suppliers. And the data was sent through predominantly into ECM. Most of the commercial banks in South Africa and processing operations use ECM, but not exclusively. but, they had to agree within their supply chains and on a business to business level, which is in those individual commercial relationships, has worked really, really quite well. But because you’re in the sort of, vendor customer relationship, you kind of have to do what your customer says. So if your customer says, give me data so I can get visibility, it’s part of your contract.

Jamie Cockerell 00:09:50 You kind of have to do it. so that fosters, collaboration, but not nationwide collaboration in the way that we see in Ghana and in and in the United States. That comes out of a, I guess, a top down strategic view, where where you’ve got a central bank behind it saying, look, as an industry, we all need to move forward because everyone benefits. that’s a slower burn. It takes a little bit of a longer time to get the industry aligned, because in a lot of cases, the commercial providers see value in selling this information to you. and there’s a there’s a commercial element to it. So to get an industry to shift their mentality into, okay, well, yes, we can all benefit from this either financially or or in other ways, but we’re all going to come together and work together. That takes a little bit longer, but it does happen. The US is a great example of that collaboration. And other countries are as well.

Shaun Ferrari 00:10:45 Yeah, no for sure.

Shaun Ferrari 00:10:46 And are there, are there kind of in terms of getting folks to work together, I think what what helps sometimes is the ability to see positive outcomes or see some examples of things that you know. We show people this information and here’s what they did with it. Type, stories. Are there any, any kind of use cases or things you’ve seen with your customers that have led to those types of, realizations that.

Jamie Cockerell 00:11:15 Absolutely. So so we’ve got a central bank customer who, who operates ECM for their for their nationwide cash distribution. They’ve got ND processing equipment. So, and then they’ve got banknote printers who are a variety of commercial banknote printers. Right. So you’ve got a number of them. we take in the data from the commercial banknote printers so that we know when the new banknotes have been printed, we know their production dates and so on and so forth. We obviously take in data from the processing machines as well. And so from and one could argue that’s a necessary part of running a secure cash supply chain.

Jamie Cockerell 00:11:55 And that’s, I guess, our bread and butter in terms of. Tracking the notes and making sure they’re distributed to the right locations. And it’s all done securely. And you’d be right. That’s that’s kind of the core functionality. But but you hit on a point there about the fact that we have access to so much information, and there’s a lot of, people in the industry will have access to this information, just need the technology to, to reach and grab it. so if we put, I mean, in this particular example, we put that information together and we started reporting on the performance of banknotes in circulation. because we know when they went into circulation and we can do this by serial number if we need to and don’t have to, but you can do, we know the results back from the processing machines, the detection detection decisions, the, the scoring on fit unfit, but also what’s going on fit and why? And once we analyze that data and the tools look at the information, this particular example, they were able to then feed back to the banknote printers on effective security features, those that were effective.

Jamie Cockerell 00:12:59 Those that were were prone to counterfeit, but also what was failing and why? what technologies on the banknotes are working and what weren’t? So, this particular bank use cotton substrate, and they had technology that reinforced, elements of the banknote around the edges to try and sort of strengthen the banknote and help it last longer. Some of that was effective, some of that wasn’t. And that was, that helped them re-engineer their next generation of banknotes and the design to make sure they had a much greater longevity. But also the, the security features were more effective. And, they didn’t get counterfeit quite as much, but also the banknotes stayed in circulation for longer. So that’s one example of how that data can be used on a, on a sort of national level, if you like. On a more local level, you can use that data in, in smaller ways, operational efficiency, too, to drive efficiency inside your own operations. So, we have, a European customer who they weren’t looking at the banknote data.

Jamie Cockerell 00:14:05 They’re looking at the machine performance data. So again, the ECM platform knows where the cash is come from. We know, which retailers in this particular case, it’s a commercial operation. We know which retailers, are depositing the banknotes and we can monitor them as they go through the machines. And we were able to identify quite a big saving. It started out as quite modest 10% operational efficiency, but ended up being 30% operational efficiency. through fostering a culture of continuous improvement by looking at the data, and that was looking at machine performance metrics in that particular case, coupled with the, the workflow coming into the processing room and a few little tweaks, not nothing major, a few little tweaks, a few shift pattern changes, and that results in, in a, in a big saving for them.

Shaun Ferrari 00:14:52 Yeah. No, I mean I think both of those use case stories are, are really illustrative in what the power that this data has right won in the terms of like, the actual product in terms of how to design, what’s working, what’s not working, counterfeit rates, those sorts of things that a central bank would really care about.

Shaun Ferrari 00:15:10 And then not that central banks don’t care about profit, but at the same time they care a little less about profit than the commercial sector does. Right. And I think, you know, looking at 10 to 10 to 30% efficiency gains, I mean, you said 10% is modest. That’s not too bad. That can depending on depending on who you are, that can add up to something pretty significant.

Jamie Cockerell 00:15:30 And I think you hit a point earlier about sort of the trends that you see. And I think you’re you’re bang on correct with your assessment there. The central banking market are not their primary focus is not about process efficiency in terms of from a from a we’ve got to drive our cost down perspective. It’s a myth to say they don’t care about it though, because they absolutely do. no one sets out to start at the start of the day to truck to be inefficient. So, there is a growing trend to make sure that those assets are being utilized, to their maximum and to their best.

Jamie Cockerell 00:16:01 and that’s true. It’s always been true in the commercial sector. And it’s becoming very, very true in the central banking market as well. we are seeing a lot more drive for, asking those questions about, about, you know, how do I become more efficient. And part of the way to use data like this is actually don’t go to it with a specific question. let the data gather and let it tell you the questions that you should be asking yourself. which is a is a slight different slant, because most people have an idea in their mind about how they’re going to use the data. but but I think there’s another dimension is just let the data tell you. And for the central banks, particularly amongst our customers, then being told about the end to end efficiency as an add on to what they’ll be using the tool for already, is useful because it helps them think in that mindset where perhaps that’s not their primary focus, but you know that they are interested in as well.

Shaun Ferrari 00:16:59 Yeah, for sure.

Shaun Ferrari 00:16:59 And I think it’s an interesting way to to kind of flip it right in saying, you know, don’t necessarily go into it with, hey, I want to I want to improve my efficiency. Okay. It’s fine to have a goal of improving your efficiency, but there’s a different project to of. Let’s just take a look at this data and see and see what it says. Yeah. See where it leads us. Which is it’s not necessarily the way we’ve always interrogated data. Right. It’s always it’s historically been the other way around of let me let me dig into this to find a particular, solution to the problem I’m looking at rather than, here’s all this data, literally. What can I do? What is it telling me? What can I do with it?

Jamie Cockerell 00:17:43 I think that comes just for us as human beings. It takes a lot of effort when you you tend to think of, I’ve got a problem. I want the information to help me support solving that problem. rather than switching that mindset out completely and saying, let’s gather as much information as I can and then see where the problems lie.

Jamie Cockerell 00:18:00 But that was historically down to cost, right? It used to cost a lot of money to, to just gather data for the sake of having the data, because it might be worthless. but but actually, the more and more you do that, the greater depth and the enriches the, supporting information you’ve got. It definitely can, can help with those. And then the tools sit and actually do the job for you. You don’t have to sit there and crunch through the data and try to spot the trends or find something. That’s what the the tools that we produce. That’s their job is to actually analyze for patterns and then come back and say, did you realize that, your cash. you’re you’re stockpiling lots of cash over here. and it would appear that it’s been stockpiled for, for the, the winter season for, for festivals and stuff like that. And, and, you know, Christmas and New Year and things like that. But actually you’re stockpiling all throughout the year for one, one event that that’s how the data can be used, where perhaps you wouldn’t think to look over there unless you were looking for a problem.

Shaun Ferrari 00:19:01 Yeah. No. Right on, I like that. so are we. I mean, we talked a lot about the the way this is being used and how there’s so much more data out there right now. Are we basically are we have we reached a maturity point in this collection of data and use of data, or are we still kind of at the beginning? I know obviously there’s new technologies coming out all the time. And, I don’t know, where do you think we are in this journey?

Jamie Cockerell 00:19:26 I personally, I think we scratched the as an industry, you’ve scratched the surface. I think there’s other industries have kind of, have kind of a bit ahead of where we are. But I wouldn’t say everyone. I don’t think anybody’s exhausted this journey just yet. I mean, a couple of years ago, the, the buzzword at the, in the, on the conference is, you know, I remember going to a currency conference or, pre-COVID and the, the big topic of discussion was big data.

Jamie Cockerell 00:19:50 that’s that’s kind of evolved over time that the language has changed. but but and but I think everyone had aspirations. We all knew what the realm of possibility was, but we needed technology to catch up with those aspirations. Technology has now got there and we’re ready. We’ve got AI tools that can help us with stuff. We’ve got analytics tools that can help. the cost of storing this data is significantly lower than it ever was. So I think the aspiration was there all those years ago. we’re now here and we’ve just started that journey, I think. I’d, I’d say that’s true of a number of different areas. I mean, central bank CBDCs, which I know is a topic that you were greatly interested, is something we we look at. we look at a lot as ECM, although you’d think we were uniquely working in physical banknotes. obviously, digital currency to us in software is the same. a banknote has a serial number that we record, a CD or a digital currency has it as a token that we’d record.

Jamie Cockerell 00:20:49 It’s the same thing as far as we’re concerned. In the back end. And so we monitor those sorts of trends as well. And that’s a similar one where it’s kind of it’s been bobbing along and eventually, there’ll be an applicant, an application that comes through strongly for it. but yeah, so, so I think we’re at the very beginning we were in I was at the conference in Thailand, the currency conference there. And one of the, speakers I was really, really enjoyed was, talking about quantum computing. Arguably, you could say it’s a bit of a weird one, right? Because there’s nothing to do with banknotes. doesn’t do with our industry directly. but it’s definitely something that eventually will impact, just perhaps not in the next couple of years, but maybe in a few years later. So. So I think there’s lots of things that we work on. And data in particular, I think is just we’re just hitting the beginning of that journey. I don’t think we’re done with it yet.

Shaun Ferrari 00:21:38 Yeah. No, I think you’re I think you’re right. especially with quantum and and tools like that that are out there, so much more computing power that we haven’t even, I think, as you said, scratch the surface on it. One of the things you mentioned. I think in, in Bali, if I remember right, and related related to this is you really have to kind of marry up your data strategy and your people strategy. and I was just wondering if you could say a little more, a little more about that for this, this group, because I think it was an interesting point for, for everybody to keep in mind.

Jamie Cockerell 00:22:13 For sure. I mean, well, that came out of a conversation with Fergus Connolly, from vortex. so vortex, a UK based processor, one of our, larger customers. and we work quite closely in partnership with them. and they’ve been one of the organizations that’s been working with their data tools the longest. and I’d love to see these thunder and say it’s all my ideas about change, control and stuff, but a lot of it was his, And I would encourage if anybody’s listening and they, they, they see these types of topics on, on agendas at, at conferences like this.

Jamie Cockerell 00:22:46 The best way to, to, to learn about it is to hear it firsthand, not to hear it from me second hand, but, because you get to interact with the people much better. But, Fergus is, point and I wholeheartedly support it is you’ve got to involve the people. Right at the very, very beginning. turning up with a big ta da moment and say, right, we’ve got all this data, and I’m now suddenly monitoring you. doesn’t really work very well from a change control perspective. And that’s true of any change you do involving people. But in data, it’s particularly important for a couple of different reasons. One is, from a people perspective, the people in your operations, and in your, processing areas or wherever, wherever the business you’re going to apply data to or monitoring to. They’re going to be the ones who know the operations best. So they’re also going to be the ones who are going to be able to point you in the direction of where you may want to start some of your focus.

Jamie Cockerell 00:23:39 so, so involving them in that way also means that you create that culture of continuous improvement, with the people in mind, because one of the worst things you can do is try to force that culture on people when they weren’t involved in the very, very beginning. and if you can’t get that cultural mindset right, it’s not going to matter what data you come up with. And you can come up with the most compelling argument from a data perspective. If the people aren’t aren’t bought into it, then they’re not going to be involved and they’re not going to apply the learnings you need, because data is one piece of the puzzle that will give you a message. It will tell you what you need to change. The people are the ones that then affect that change. So, coming back to the example I gave before where we had that 30%, productivity boost that came out of people changing how they, they processed, how they handled the cash, how they loaded it into the equipment, how they, handled it as it moved around the building.

Jamie Cockerell 00:24:36 Now you can use a, a stick approach, of course, and just make people do things, but you won’t get the same performance improvements out of individuals than you would do if you, brought them along with the journey. And they were part of that. Moving towards it. So. So involving people in that aspect is, is absolutely crucial I feel anyway.

Shaun Ferrari 00:24:56 Yeah. No, I think that I think that’s right. you really need that in addition to the skill piece, as you say, you need that kind of buy in and that involvement along with, with all these changes. so I think too often it is kind of that, that big bang, here’s a new thing, here’s a new shiny toy to play with. And you’re like, oh, how do I do that? How does that affect me? What is it? And and it’s not quite right. But if you involve them at the beginning, you can design it how one you can design how they want. And two, you have that buy in.

Shaun Ferrari 00:25:25 So it makes a whole lot of sense.

Jamie Cockerell 00:25:27 And people will be fearful of it if you tell people, right, I’m now monitoring your performance. The first thing you think to their mind is, okay, well, they’re looking to get rid of people because, you know, they’re they’re trying to figure out who’s working and who isn’t working. And it’s seldom anything to do with that at all. I mean, generally speaking, in my experience, when when savings are identified, that is capacity that can be used elsewhere or can be sold to other commercial customers, it is seldom used to cut costs. It can be used that way, but it’s very seldom used that way.

Shaun Ferrari 00:25:53 Sure. No run on. well, speaking of of, big, big announcements and tada moments. I think looking, looking, looking ahead. I know I’m going to see you, in. Well, probably by the time this airs, a week or so, at the, at the Americas Cash cycle seminar in Miami. And I see from some social media chatter and I’ve heard from, from various comments and discussions you and I have had, that there could be some sort of big announcement coming up.

Shaun Ferrari 00:26:26 And I know you probably can’t short circuit that announcement from from you all, but is there anything you can, you can share with the audience on what might be coming?

Jamie Cockerell 00:26:36 well, yes, I guess we we disingenuous of me to come on a podcast like this and then not maybe share a little bit of a sneak preview. so, there’ll be a few spoilers I guess, but but. So I mentioned before about the fact that we we invest a lot into the technology and over the years you’d have seen industry events, in the last two years, certainly you’d have seen we we’ve launched new technologies. So right when we became, ECM right early on with centralized control, we launched that at the, the banknote conference in Dallas. we then launched Root Plus Reserve, which is our track and trace and route optimization platform that was launched, in the Americas in New Orleans last year. And so we’ve got a habit of introducing new technologies and launching them at these events. this one we’re particularly excited about. So, it’s part of a bigger program of change.

Jamie Cockerell 00:27:34 So rather than it being not that centralized control or route plus for small developments, not at all. But but this one is a particularly significant and large one for us. so I’m not going to say too much, obviously, because if I do it now, then There’s no point in getting on the stage in, in Miami and talking about it. But but what we, we have moved into more is how do we use, tools like AI, within the cash processing operations, but taking those principles and technologies and applying them in a way that our, our customers and our industry can, can really fully use them. not just throwing data into the cloud and then getting the results back, but actually considering what sort of data we’re handling and making sure it’s being used in the appropriate manner. so I won’t go into too much more about that, but yeah, it’s you can expect a as much about other aspects. You can expect an AI element to, to creep into the conversation for sure.

Shaun Ferrari 00:28:31 Awesome.

Shaun Ferrari 00:28:32 Well thank you. I won’t push you more on that. I will save the rest. as much like yourself, I want to get people to Miami, so let’s not, let’s not spoil it here for them. But I think that’s a good teaser, so thank you for that. cool. Yeah. No, we’re excited to have it. And thank you. And the whole ECM team for for all the support always I you mentioned the unveiling that happen and a lot of our events. So we’re you know we’re we’re always thrilled to have that. So so thanks for that. well that’s all my questions. Do you have any any final thoughts for the for the audience other than, let’s, let’s hope to see as many of them as possible in Miami. And stay tuned for the announcement that comes after that.

Jamie Cockerell 00:29:11 Yeah, I mean, that’s that’s I guess if there was a plea. Definitely, if you can’t make Miami for, for whatever reason, then, yeah, there’s there’s a lot of stuff on social media.

Jamie Cockerell 00:29:20 And that’s the kind of medium for getting a lot of these pieces of information out there and these days. But, if you are curious about data and what we’ve done with it, then we’re always here, and we can share, we work with a group of customers that are usually pretty happy with sharing their experiences. and so you don’t need to hear it from us. We can put you in touch with people that have actually trod that journey. So if you’re thinking to yourself that I want to get started with this, I don’t even know where to begin with putting even the basics of technology in there. We can help you, but we can certainly introduce you to people that have done it. and would be happy to talk about it.

Shaun Ferrari 00:29:55 Awesome. Well, thank you for that. Thank you. Jamie, it was a pleasure chatting with you. And, Yeah. No worries. Thank you. And, we thank everybody for for listening. I hope you can see us somewhere out around the world soon and between now and then.

Shaun Ferrari 00:30:11 Keep listening to the podcast. So, like, subscribe, download, email me to speak all that good stuff. Just get involved with with the exchange. However you listen to and engage with your podcast, we greatly appreciate it. And until next time, have a great day and week.