Pub. 8 2013-2014 Issue 4

www.nebankers.org 18 Extraordinary Service for Extraordinary Members. C ash shortages are a serious and growing problem in banking today. But the prob- lem, which is severe and ex- pensive in some banks, does not seem to exist in other banks. In an effort to find the reason for the wide differences between problem and non-problem banks that otherwise seem similar, we conducted a careful study of the cash shortages trend in banks. The following factors were consid- ered in the evaluation of the banks in regard to their cash shortages: • Teller salaries • Teller turnover • Teller training methods • Lobby traffic patterns • Lobby vs. drive-up tellers • Number of transactions handled • Geographic location of the bank • Urban vs. rural banks • Large, medium, and small banks • Day of the week • Month of the year • Cash handling procedures • Attitudes of bank management • Education level of tellers • Male vs. female tellers We were able to find a correlation between poor salaries and turnover, but not between poor salaries and cash shortages. There was a correlation be- tween teller errors and lack of training, and turnover, but cash shortages were less than other teller errors. We found that large urban banks, as a general rule, paid tellers less than rural banks paid their tellers, but no significant difference in cash shortages occurred between urban and rural banks. No day of the week had signifi- cantly more cash shortages, except Mondays. However, when the fact that many banks carry over Friday evening and Saturday teller transactions to balance into Monday’s business was considered, Monday cash shortages did not stand out over any other day of the week. Two factors, however, did show up significantly in the study. The month of the year and the attitude of bank management are critical factors in the number and amount of cash shortages that any bank will suffer. Month of the Year Cash shortages are significantly higher from Nov. 1 to the end of the first week in January. That time period has held true for many years. More cash shortages in banks occur during that 10-week period than in the bal- ance of the year combined. We were unable to prove any reason for that period of time to stand out the way it did. We only can speculate the need for extra cash at Christmastime might be the reason. Management’s Attitude The attitude of bank management turned out to be the real key to the amount of cash shortages suffered by banks, both large and small, urban and rural. In banks with excessive cash short- ages, the attitude of bankmanagement was in whole or in part as follows: • “Everyone makes mistakes.” • “Our tellers do a good job consider- ing the amount of cash they must handle.” • “The owners will not allow us to pay good salaries, so we have to expect more errors in cash.” • “Accurate, careful tellers are just not available in today’s market.” • “We expect too much of our tellers now.” • “We are just one big happy family here.” • “Strict cash handling rules and pro- cedures create unhappy employees and more turnover.” • “We don’t want our employees to feel that we do not trust them.” • “We trust our tellers.” In banks with little or no cash shortages the attitude of bank man- agement was, in whole or in part, as follows: security officer’s by-word Cash Shortages Donald M. Towle , President, Kansas Bankers Surety Co.