Locked down

Daniel Stanton looks at some of the security services helping UAE banks minimise their risk of robbery and showing that processes are as important as locked doors.

A couple of months ago it was reported that an unnamed UAE bank had suffered the loss of AED1.2 million while filling its ATMs. Rather than employ a guard in an armoured car to transport the cash, it had sent out two bank employees in a family saloon, which was broken into while they were attending to an ATM.

This may seem like a lax approach to security, but until three or four years ago, this was the norm among UAE banks, rather than the exception.

Peter Walters, director of cash services, Transguard Group, says that - with a few exceptions - the majority of banks in the UAE now reduce their security risks by using cash-in-transit services provided by G4S, Brinks, and Transguard, which is part of the Emirates Group.

Transguard provides three main services to banks: cash-in-transit, the collection of cash from the bank branches and the customers' premises; its cash centre, where it processes, counts and reports on the cash that has come from bank branches and customers; and the loading and basic maintenance of ATMs.

"If the bank goes for the full gamut of services, the bank doesn't actually see the majority of money that it handles," says Walters. "We pick the money up from the bank branch or the customer, bring it in here, count it, inform the bank what we counted and they then pass the credit entry to the customer or the bank branch's account."

The cash centre sorts, counts and bundles the cash, using a machine that identifies the currency and denomination of each note, as well as judging whether it is genuine and whether it is suitable for use in an ATM. The cash can then be distributed to ATMs, bank branches or the Central Bank. Rejected notes are sent to the Central Bank for destruction.

"Two or three years ago, bank branches were doing the majority of those kinds of things themselves," says Walters. "With one major UAE national bank, every day the cash was collected from their bank branches and customers, and went back to the head office. They literally had a room of 200 Indian ladies sitting in there counting the cash back out and making a decision manually on whether the note was good quality or poor quality."

The benefits of outsourcing these tasks to a cash management company are twofold: it frees up bank staff for other tasks, and it reduces the institution's security risk, since staffs are not transporting cash and less money is held in the branch.

"Once we collect that cash from the customer and once the receipting process is complete, we're liable for that cash, so we're fully insured for it," says Walters.

"Both ourselves and G4S have had a number of attacks on our staff making deliveries and cash collections. They are still extremely rare compared to Europe: in 2006 there were 1,034 attacks on cash in transit vehicles or staff in the UK, resulting in a loss of 108.6 million euros."

"So the handful of attacks we've had in the UAE are a lot less than that, but the consensus seems to be that as more and more expatriates move in then logically the criminals from those countries will follow suit."

Transguard's vehicles must be approved by police regulators in Dubai and Abu Dhabi before they can be used. They are armoured and fitted with security features including satellite tracking, panic buttons and alarm systems. In addition, Transguard has recently invested in secure containers for cash from a company called Spinnaker, which should improve security further.

"The most vulnerable period is when cash is being collected or delivered from customers' premises - i.e. when the guard has gone from the van to the premises," says Walters. "When the box is closed, it can only be opened inside the customer's premises. Our guard can't open it unless he is actually inside the customer's premises or he is back inside the vehicle."

"If someone stole it and then tried to force the box open, there's a small explosive device inside which activates and sprays them with red dye. So if you did manage to get the box open, the money is totally unusable."

The box also has a timing device, so even if it is stolen and not opened the dye bomb will detonate after a certain period. If anyone handles the tainted money, the dye is designed to stay on their hands for weeks, making it easy to identify thieves.

Inside the cash management centre, security is extremely tight. The cash counting area has 150 digital, real time cameras and the images are kept for 90 days. Staff must pass through several swipe-card protected doors and are searched on entry and exit. If they have any money on them when they leave for the day, it is assumed that they have stolen it. Transguard vets all of its employees, but Walters says that controls and checks on the management of cash are more important.

Transguard's vaults are fitted with a KABA lock, a keyless locking system that is also used on all of the ATMs it operates. In order to open the vault, the Transguard employee types in an ID number, which produces an unlock code.

They then telephone a call centre and read out the code. When the call centre operator enters this code into their system, an algorithm creates another number, which the Transguard employee uses to unlock the vault. If the call comes from someone who is not scheduled to be opening the vault at that time, the call centre will not give out the unlock code.

As more banks enter the market and existing customers increase their business, opening new branches and ATMs, there is increasing demand for cash management firms.

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