TRANSGUARD CASH SERVICES
THE UAE’S LEADING CASH-INTRANSIT AND CASH MANAGEMENT FIRM IS RESPONSIBLE FOR 95% OF THE ALL PHYSICAL MONEY TRANSPORTED AROUND THE COUNTRY ON A DAILY BASIS – FINALLY IT LIFTS THE LID ON THE INNERWORKING OF THIS HIGHLY SPECIALISED LOGISTICS SERVICE.
The UAE’s leading cash-in-transit and cash management firm is responsible for 95% of the all the money transported around the country – finally it lifts the lid on this highly specialised logistics service.
Cash logistics services refers to the physical movement, as well as handling, of cash from one location to another. It consists of services such as cash-in-transit, cash management, and ATM replenishment, which is a huge market when you consider that at the end of 2018, there were more than 5,200 ATMs in operation in the UAE.
Cash management is what comes after the cash has been moved, and consists of services such as wrapping, sorting, checking quality of bills, and others. Adoption of cash logistics services reduces operating cost, provides efficient project management, dependable infrastructure, and others for clients, but is incredibly specialised.
For this reason there are very few companies in the UAE doing it, and the undisputed leader is Transguard, which acquired G4S Cash n 2018. “We controlled 90% of the cash transport market in the UAE prior to the acquisition of G4S Cash, so that expansion accounted for around 5%,” says Greg Ward, managing director of Transguard Group.
And with the acquisition came new plans for Transguard. “We already had four cash centres, two in Dubai and one in Abu Dhabi and one in Al Ain. With the addition of G4S Cash we now have their cash centre in Abu Dhabi as well,” says Ward. “We needed that initially because of the volumes we were handling, but now we’re building a new cash centre in the capital and the two existing facilities will be consolidated into that.”
Ward says a large part of the reasoning for this is because of costs. “The fewer cash centres you have the better, because they’re
very expensive to run, especially from a security standpoint,” he says. “But you also need them in the right areas, we need to be able to cover Dubai and the Northern Emirates, Abu Dhabi and Al Ain as well, hence the reason we have the network we do.”
The new centre in Abu Dhabi, however, will be larger and more efficient. Part of the operational challenge that Transguard has to overcome is ensuring security and visibility for clients at all times. This is extremely important in the cash centre where the money is processed, sorted, wrapped and stored.
“A lot of cameras, a lot of good staff and a very tight process,” says Ward, when asked how this is achieved. “The operation of the cash centres is very lean and efficient, we don’t have a lot of manpower in there because there’s a lot of automation and monitoring from the moment cash is picked up all the way through to when it’s delivered back to whoever
THE OPERATION OF THE CASH CENTRES IS VERY LEAN AND EFFICIENT, WE DON’T HAVE A LOT OF MANPOWER IN THERE BECAUSE THERE’S A LOT OF AUTOMATION AND MONITORING FROM THE MOMENT CASH IS PICKED UP ALL THE WAY THROUGH TO WHEN IT’S DELIVERED BACK TO WHOEVER THE END USER IS”
the end user is.”
But while the Dubai and Al Ain centres are modern and automated, the new one in Abu Dhabi, added as part of the G4S acquisition, is not. “This second one in Abu Dhabi is a lot more manual, whereas we want to have a fully automated system. That means from the moment the cash comes in and gets delivered and gets signed off to the customer, it goes into the counting machines, it’s then fully automated all the way through the process to when it’s wrapped and put into the vault. We don’t want any manual counting.”
The cash centre Transguard already had in Abu Dhabi is automated in this way, but lacks the capacity needed for the growing volumes of cash it’s handling (up to AED 5-billion per day). “So we’re going to roll both into a new state-of-the-art centre in the next two years,” says Ward.
But it’s not only in the cash centres themselves where Ward is trying to create efficiencies. It’s in the first mile as well. The company is adding more cash deposit machines around the UAE for customers to deposit their money for sorting and storage. “And once that money is deposited it immediately becomes Transguard’s responsibility and we monitor them all constantly.”
What Ward sees as the real future of the cash transport and management business though are its new cash deposit centres, which are designed to function almost like a bank, allowing SMEs to drop their money and see it instantly reflected in their bank accounts.
“We have longer opening hours until 9.30pm, so customers can come anytime they want during the day and put their cash into that machine and then into our cash center
in the mall and the money goes instantly into their bank account and the cash is obviously our responsibility,” says Ward. “It reduces footfall in the banks, because at times the banks can get really busy and a lot of that is just people turning up wanting to deposit their takings from their restaurant or their retail unit.”
Asked whether Transguard has plans to open more of these cash deposit centres (it’s currently only available at Dubai Mall), Ward says “one hundred percent”.
“At the moment we’re monitoring how well the Dubai Mall one is doing and we already have a lot of banks themselves in addition to SMEs using it,” he says. “So once we get a fully rounded idea of the needs and demands we’ll definitely start looking at other malls and high footfall areas.”
But, it’s an end-to-end service that Transguard Cash Services is operating, so when that money is deposited anywhere in the country it then has to be collected and processed at one of the cash centres. “Whether its from an ATM, a bank vault or our deposit centres the cash needs to be transported to one of our cash centres and processed,” says Ward. “We count it, sort it, wrap it and store it if necessary before sending it back out to the ATMs, the Central Bank or one of our banking clients’ branches.”
The transportation is the most critical point in the whole operation, and it’s done using 450 cash vans, which pick up from high footfall areas. “Traffic is always a big challenge,” says Ward. “It’s a challenge for any logistics business, but more so for us, because where we’re picking the cash up its high footfall, busy areas like banks, shopping malls, restaurants on JBR and so on.”
It’s for this reason that the deposit machines and new deposit centres will be so beneficial in easing that traffic problem, but the trucks themselves have to be highly specialised. “The armoured vehicle is a very complex unit, with 350-degree cameras, GPS tracking, panic alarms, and remote fuel cut-off.” All of these add-ons are installed and maintained in-house by Transguard for security reasons, while the maintenance
THE ARMOURED VEHICLE IS A VERY COMPLEX UNIT, WITH 350-DEGREE CAMERAS, GPS TRACKING, PANIC ALARMS, AND REMOTE FUEL CUTOFF.”
of the actual vehicle is outsourced.
“The maintenance is outsourced at the moment. We’re looking at different options for that, because the majority of the fleet are GMCs and are under four years old, so they’re still under the manufacturer’s warranty, but there are some older cash vans that have been acquired through M&A activity,” says Ward.
The operation of the vehicles is different as well, depending on the emirate, Ward adds. In Dubai for example, there are three men for each vehicle, while in Abu Dhabi it’s four men to a vehicle. “So for cash transit within Abu Dhabi we can only serve from our Abu Dhabi centres themselves.”
With cash continuing to dominate the majority of transactions in the UAE, Transguard doesn’t see the rise of cashless payment systems as a threat. For example, around 85% of total investment going into Dubai’s real estate market in 2019 was cash-based, according to the Dubai Land Department, while according to figures from the Central Bank, 75% of the economy remains cash-based.
This may change in the coming years. The UAE government’s Vision 2021 project has prioritised a transition away from cash, with apps such as Emirates Digital Wallet, Samsung Pay and Apple Pay replacing dirham notes. For now, however, the buck stops with Transguard.
WE HAVE A FULLY AUTOMATED SYSTEM. THAT MEANS FROM THE MOMENT THE CASH COMES IN AND GETS DELIVERED AND GETS SIGNED OFF TO THE CUSTOMER IT GOES INTO THE COUNTING MACHINES, IT’S THEN FULLY AUTOMATED ALL THE WAY THROUGH THE PROCESS TO WHEN IT’S WRAPPED AND THEN PUT INTO THE VAULT.”