The old Hollywood stereotype of a bank vault filled with stacks of cash protected behind a massive door is mostly going by the wayside.
Instead of keeping large cash inventories in one place, banks spread the money around to branches or wherever else customers need it. That reduces risk and the cost of maintaining a cash inventory, giving the bank one more competitive edge.
“People want things faster, and the market has changed,” said Hancock Bank’s Jay Ockman, vice president of the Cash Solutions Group, which oversees the network that circulates cash through Hancock’s system. “Instead of keeping tons of money in vault locations, it’s parceled out in different locations.”
Hancock Holding Co., Gulfport-based parent of Hancock Bank and Whitney Bank, has $20 billion in assets and operates 250 branches from Texas to Florida.
The so-called virtual vaults are outsourced to armed car companies that handle deposits and other bank functions.
“It allows us to expand our markets or to have currency in areas more accessible to branches without a brick and mortar safe, which are expensive to build, maintain and staff,” Ockman said.
“It makes our distribution network more nimble getting the working cash into the hands and locations a lot quicker than shipping it from larger vaults.”
Besides the virtual offsite vaults, there are so-called smart safes maintained for Hancock’s top tier customer locations including casinos. “They have a heavy cash volume but don’t necessarily want an armed car coming to their locations,” Ockman said. “The product technology is supported by the bank.”
The smart vaults are monitored, alarmed and bolted into place. “It’s a reverse ATM, basically,” Ockman said.
So what else is in a vault? Sometimes it’s bonds or certificates that a bank is required to hold temporarily as collateral. “Never anything glamorous,” Ockman said.
Among the commercial money received in a bank’s central vault might be money taken in drug busts or cash confiscated from prisoners.
And of course there are safe deposit boxes. “But we don’t know what’s in them,” Ockman said.
Early in his career, Ockman was part of a crew who counted the money stored in the main vault every night. It contained all of the bank’s cash that was supplied to branches and commercial customers.
“We counted, bagged and banded the money and several layers of people signed off on the physical count. The time was noted on the door. The crew shared a portion of the combination so not one person could open the safe,” he recalled.
Such procedures are part of a bank’s standard operations, for obvious reasons.
“There is a tremendous risk in cash,” Ockman said. “Once it is stolen it is not easily replaced. It may never be recovered.”
Details of the bank’s vault contents is a tightly held secret but Ockman said it is “considerable.”
Hence the surveillance cameras, guards and the rest. “The risk is there and the safeguards are all in place to ensure minimal risk,” he said.
But, he had to admit, before 2005, “We never thought about flooding.”
At one point after Hurricane Katrina, the bank bought a washer and dryer to clean the muck off the cash.
“We washed, dried and ironed it,” said Hancock spokesman Paul Maxwell.
The Wall Street Journal featured photos of bank employees “laundering money,” said Dave Marshall, the bank’s construction manager.
“We closed off a portion of the parking lot and hosed down the coins,” Ockman said.
Marshall has been involved with building a number of Hancock Bank’s vaults.
“The older style vaults were massive in the sense they had thick concrete walls and lots of reinforced bars and usually massive doors. Newer vaults are much less expensive. Basically they come in a series of panels and you build it as big as you need it,” Marshall said.
The panels of the new vaults are filled with scrap metal shavings that quickly dull drill bits. And forget about going after the money from underneath a new vault. “The slab tends to be 12 inches thick and loaded with reinforced bars,” Marshall said.
That’s in addition to the electronic sensing equipment to detect vibration that goes into them. “If anybody is messing with it, you get an alarm to alert some sort of problem.”
Marshall’s experience with vaults includes hacking into them.
“On three occasions we had to break into our own vault,” he said.
The vault in Pass Christian had a problem with the door and Marshall and his crew took turns with the jack hammer. The most slender of the group finally squeezed through the opening, fell to the floor and was able to fix the problem and walk out.
He said it was “an extremely lengthy process” that couldn’t be done secretly.
“It was in the 1990s and most of the town of Pass Christian knew on that particular day Hancock Bank was breaking into their own vault.”
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info