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It’s the end of the work week in a small town in an emerging economy, and a local worker heads to the bank to withdraw money for the weekend. She’ll use it to buy food, clothing, and other goods for her family at a few local businesses, all of which only accept cash.

But when the worker gets there, the bank has no cash to give her. “This happens frequently throughout cash-based economies,” explains Dubai-based McKinsey business analyst Hamza Jawaid. “Only, it’s not a funding or financing problem. Fundamentally, it’s a logistical one—and we thought we could solve it.”

Hamza and his fellow business analyst Ibrahim Shami got that idea while they were working with a commercial bank in Pakistan, a cash-heavy economy, and saw an opportunity to help better manage its cash inventory. “We saw branch managers who were largely working off of gut instinct to plan for how much cash each branch and ATM needed at a time,” Hamza explains. “They had little visibility into their cash stock or how much was in transit at any point.”

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Ibrahim Shami, left, and Hamza Jawaid, right on a client roadshow in Jordan

This, according to Hamza and Ibrahim, raises at least two undesirable situations. “When the banks have too much cash on hand, the currency doesn’t earn interest and is far more at risk of theft, which can be high in some of these markets,” Ibrahim explains. “When the banks have too little cash on hand, they’re not able to serve the communities in which they operate. This is especially crucial in rural areas, where people rely on them to withdraw their salaries.”

So Hamza and Ibrahim went to Jawad Khan, a Dubai-based McKinsey partner, and spoke with him about building a forecasting tool that would enable real-time tracking of cash. “We realized banks had so much data at their fingertips,” says Hamza, “so we thought we could apply analytics to help bank managers get insights into the actual needs of each branch.”

Once they had this proof of concept, Jawad worked with them to submit their idea to a McKinsey competition, which they won and then received support and investment from our in-house tech incubator, which we call Launch.

“It was a clear winner from the get-go,” recalls Rahim Noormohamed, who manages a portfolio of McKinsey colleagues’ new venture ideas within the firm’s technology incubator. “Ibrahim and Hamza had tapped into a largely unmet need within emerging markets, given the heavy reliance on cash there, and it was already a big success.” The McKinsey incubator funded the team and oversaw a structured build process for their minimum viable product (MVP).

It was a clear winner from the get-go.

McKinsey portfolio manager, Rahim Noormohamed

Hamza and Ibrahim called their idea ACE, short for Analytical Cash Efficiency. It was envisioned as a cloud-based cash-management tool designed to help retail banks optimize their cash operations. And now that they had won, they needed to make it a reality. The only problem? Neither of the recent college graduates had any software-development experience.

So they decided to tap our firm’s network: “Looking for someone with a strong technical background for advice,” they posted on an internal message board. And they waited.

Robert Muil, a seasoned data scientist in London, raised his hand. “They had already proven this could work,” says Robert on when he first started talking with Ibrahim and Hamza. “What they now needed was someone who could help produce it as a software tool.”

Over the course of a year, Robert and a team of developers went into building the solution that shows managers exactly how much cash is needed at any given ATM branch—accounting for factors like seasonality or weekday—and helps determine the best strategy for shipping their cash.

While Ibrahim and Hamza built their MVP, Rahim served as a trusted advisor and mentor to ACE, helping them refine their idea and showing them how to design and build the solution for client use. Over the next nine months, Hamza and Ibrahim also received coaching on pricing and delivery models and help with staffing from McKinsey experts across the firm.

ACE was officially up and running by early 2018, and Ibrahim and Hamza began showing it to clients throughout the Middle East. Within a few months it was put to use with their first client, in Jordan, resulting in a 40 percent reduction in cash-management cost. “Our sights are set on scaling across Latin America and West Africa,” shares Hamza. In just the eight months since it’s launched, ACE has already been used with seven clients across three continents.

Whether it’s cash, food, or something else, people shouldn’t have to think twice about getting what they need when they need it.

McKinsey business analyst, Ibrahim Shami

“For that worker heading to the bank come Friday afternoon,” says Hamza, “she no longer has to worry if she’ll logistically be able to withdraw her cash.” As for what’s next, he and Ibrahim hope to expand this concept of web-based inventory optimization into other industries, like grocery stores, within emerging markets.

“Whether it’s cash, food, or something else,” adds Ibrahim, “people shouldn’t have to think twice about getting what they need when they need it.”

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