Security is not expensive, It is priceless!
Suppose you’re in a market in the middle of groceries shopping and you suddenly find yourself running out of cash. You almost panicked but then you realized that it’s the 21st century you live in and there are plenty of ATMs around, whose main purpose is to supply cash in these kinds of situations. However, have you ever wondered who deposits such a huge load of cash in these ATMs? If your educated guess is Bank, then you cannot be further from the truth.
The financial and retail institutions like banks outsource the coin and currency operations to third-party service providers to reduce the risk and focus on core competencies. The carriers are offering state-of-the-art facilities dedicated for currency processing, owing to the increased demand for the market and the growing return on investment. These 3rd party service providers are together part of Secure Logistics Market, which is a high-growth market. It has been valued at USD 48.19 billion in 2015 owing to the increasing money circulation across the globe and is anticipated to reach USD 109.25 billion by 2025.
Segmentation based on Applications
Based on applications, market caters to clients by providing services in areas of cash management; diamonds, jewelry & precious metal; manufacturing; and others. Apart from these prominent areas, market also makes its presence felt in areas like retail and public infrastructure. Above information is processed aptly in the infographic below.
Market is increasingly dominated by cash management segment due to the exponential proliferation of the Automated Teller Machines (ATMs). There are several other drivers of the market as well apart from the ones stated above.
The market drivers are:
The requirement of secure movement and management services for cash has been increased owing to the rising security concerns among the financial institutions. For example, In the European Union, the theft of high-risk, high-value products was estimated to cost over 8.2 billion Euro a year.
Expansion of financial institutions and banking infrastructure in the emerging economies in the wake of demand to increase the financial inclusion has been one of the major drivers.
Growing proliferation of ATMs in the economies asks for the greater safety measures regarding the security of logistics.
In terms of technological trends, big data and predictive analytics are expected to play a vital role in the logistics industry. The increasing use of Transportation Management System (TMS), to process a high volume of shipments, is likely to spur the market growth.
Apart from the above major factors, it is beneficial to take a look at how the growing FDI in emerging markets, greater economic size and higher population density have been able to improve the ATMs penetration in the developing economies.
Challenges faced by the Market
The market faces several headwinds and challenges as well, which it needs to tackle to keep the momentum of growth.
Growing penetration of mobile payment and online banking is the major factor which poses a challenge to the market. Factors such as improved data and connectivity payment infrastructure present a significant opportunity for mobile commerce. With the growing number of consumers, online M-Commerce is gaining popularity.
Lack of appropriate security personnel, coupled with the lack of appropriate training, would delay the detection of stolen freight and incur more loss to the firms.
Various reasons such as laziness and time restraint at the employee’s end cause losses to the companies.
Recent Major Developments
The latest Organized Retail Crime (ORC) Report from the National Retail Federation (NRF) in the United States reveals that 73% of the 63 retailers who participated anonymously in the survey suffered cargo thefts in 2019 compared to just 30% in 2018.
TAPA EMEA’s secure parking survey conducted at the end of 2019 has reinforced the Association’s commitment to help increase the quality and availability of secure truck parking sites across the region by accelerating the growth of its Parking Security Requirements (PSR).
The NFC technology is widely used at pay terminals using mobile devices. Retailers such as Macy’s (U.S.), Walgreens Company (U.S.), and Target Corporation (U.S.) have started using the technology with Google Wallet.
Amazon fires delivery firms for not meeting safety standards. Bear Down Logistics, a company that expanded quickly in the past few years delivering packages for Amazon, will no longer be working with the company.
Australian logistics company Toll has been forced to disable its systems and use non-digital processes after a ransomware attack. It caused delays throughout the country.
In-depth report on global secure-logistics market by Grand View Research:
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