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24 January 2019

FOC spoke with Georgia Botsika , National Bank of Greece

In parallel of digital boom, banks in Greece face an increased need for banking services in cash transactions, which in its turn puts pressure on operating costs, especially in remote areas and islands. National Bank of Greece is using all available technology to deploy innovative cash services to its customers, such as ATMs with recycling capability, Simple Pay Spot and Instant Cash Service, decreasing cost to serve and increasing profitability at the same time.

The Future of Cash spoke with Georgia about this.

 

What do you regard as the most influential drivers for change in cash usage?

The increase of digital transactions both in terms of availability and in terms of convenience for the end user decreases (puts pressure in) the use of cash, as financial institutions invest more and more in digital transformation in order to reduce their costs. In addition consumer behaviour gradually changes due to new technology and innovative solutions, driving e-commerce, mobile payments, mobile wallets to gain traction and increase their market share.  

 

What needs to be done to ensure cash is preferred for payment by the public, retailers and commercial banks?

In general terms, cash is still the preferred payments mean especially in certain countries including Greece. Statistics in Greece indicate that despite the huge increase of digital transactions, the use of cash remains also in high levels, especially in low ticket transactions, meaning that public, retailers and commercial banks still count mainly on cash. Infrastructure in Greece for cash handling and consumer access to cash (ATMs, Retail Cash Distribution for Cash, Wholesale Cash Management and Availability of Cash) is very well established and continuously improved by banks (despite heavy costs associated to it) to allow for high service level quality.  However, high cash usage is associated both with distribution and management costs as well as tax evasion, thus card and digital payments increased is favoured by Government and Public Administration.

 

What is the level of cash usage necessary to keep cash cost competitive?

The cost of cash depends mainly on the interest rate and the logistics cost of cash handling. As the interest rate is not controlled from retail Banks the only way to make cash usage cost competitive is to constantly decrease its logistics costs. There are two main pillars for doing so without impacting customer satisfaction. The first one is the shortening of Cash Cycle and the second one is the Cash Re-Circulation.

 

How important is the cost of cash, making cash withdrawals and cash deposits convenient or making cash easy to use compared to the alternatives in securing the future of cash?  Or is there another more important factor?

In stable economic environments, cost of cash is perhaps the most important factor. However, in turbulent times of financial and/or physical crisis, where infrastructure may be unavailable, cash is the only mean for economic transactions as it was throughout the history of human kind.

 

What role is your organisation playing in keeping cash a vibrant, preferred payment tool?

NBGs performs about 35% of the ATM withdrawals in Greece having at the same time only the 25.7% of ATM’s market share. NBG has a high market share of salary and pensions payments and its customers still prefer cash transactions in a significant portion. Some of NBG Branches have the responsibility to distribute cash in places where Bank of Greece (central bank) does not have presence. Based on the statistics ATM Cash withdrawals remain at same level as the one prior the capital controls.

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