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Transcript of Central Bank Review - Currency...
Central Bank Trends
Currency Research Review Seminar 2013
Summarizing trends from many
conference presentations and
meetings
Summarizing Presentations:
International Commercial Cash Operations
Seminar –
The Cash Cycle Seminar
ICCOS Americas , ICCOS Asia, ICCOS EMEA
Other Conferences:
ESTA (European Security Transport Association)
EFMA (European Financial Management Association)
Banknote – Washington
High Security Print (Cross) Conferences
International Cash Conference – Moscow
CR Review seminars
WAIFEM course (June, 2013)
Currency Research - Review Seminar
Review presentations from many
Central Banks 2010- 2012 Bank of England
Federal Reserve Bank
Bank of Canada
Bank of Lebanon
Bank of Russia
Bank of Kazakhstan
Monetary Authority of Singapore
Armenian Central Bank
Reserve Bank of India
Central Bank of Brazil
European Central Bank
Norges Bank
Bank of Uganda
Czech National Bank
Central Bank of Chile
Bank of Tanzania
Bank of Israel
Reserve Bank of Australia
Reserve Bank of New Zealand
Bank of Nigeria
Reserve Bank of South Africa
Bank of Thailand
Bank Negara Malaysia
Bank of Indonesia
Bank of Austria
National Bank of Belgium
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
9
Euro cash: the road ahead
Bratislava,11 June 2012
Ton Roos, Director Banknotes ECB ESTA conference
Currency Research - Review Seminar
KEYNOTE MESSAGE
International Commercial Cash
Operations Seminar (ICCOS)
Manila, 16 October 2012
Deputy Governor Juan D. De Zuñiga,
Jr.
Bangko Sentral ng Pilipinas
Review presentations from
many suppliers DLR
Goznac
Toshiba
G4S
Cisco
Dutch Currency Association
Fiserv
Transoft
Authentixs
G&D
Crane
Arjowiggins
Obethur
KBA
Sicpa
Securency
SMI
Komori
Currency Research - Review Seminar
Central Bank Trends
Three General Themes
1) Production and Issue trends
2) Regulation and circulation trends
3) Outsourcing trends
Currency Research - Review Seminar
Production and Issue Trends 1) Redesign , launch issues, public awareness,
visually impaired
2) Coin note boundary, note life
3) Security of the Banknote, design features
4) Demand issues
5) Intellectual property
6) Production issues
7) Standards
Currency Research - Review Seminar
Regulation and Circulation
Trends 8) Business practices, cost reduction
9) Contingency planning
10) Low denomination soiling
11) Commercial regulations on circulation
12) Automation, vendor interaction
13) Serial number use
14) Money laundering
15) Philosophical issues, payment methods
Currency Research - Review Seminar
Outsourcing Trends Increasing activity
Emerging service companies
Impact of recirculation strategies
Balance control/security/efficiency
Retain responsibility ofr issuance and destruction
Currency Research - Review Seminar
1) Redesign , launch issues, public
awareness, visually impaired
How often to launch a new series
“Upgrade” versus redesign
Public awareness regional issues: poorest regions,
diverse geography, language, technology usage
How to accommodate every member of society:
visually impaired,
Health issues “antibacterial coating”
Currency Research - Review Seminar
1) Redesign , launch issues, public
awareness, visually impaired Summary
Cost causing upgrading versus new series
Speed causing upgrading versus new series
Public awareness balance with confidence
Use of social technology to publicize new notes
Measurable formulas for decision making
Limited features, maximize education
Trend is faster releases of new series due to technology threats and more spent on marketing
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
National Printing Bureau
Japan– Banknote Dec 2012
2) Coin Note Boundary , Note
Life Flexicoin , polymer substrates
Counterfeiting highest denomination coins
Public convenience
Cost , cost factors
Coin authentication
Redesign timetables
No clear boundary trend but longer life notes
Currency Research - Review Seminar
Currency Research - Review Seminar
3) Security of the Banknote,
design trends
Anti-counterfeiting continues to dominate design
Technology improves for everyone including the
counterfeiter
The current trends are to try to stay ahead of the
technology available.
Currency Research - Review Seminar
Currency Research - Review Seminar
Bank of England
The Bank of England – Singapore Oct
2011:
“Maintaining confidence in the currency is a key
objective for the Central Banks”
“ Three key roles for achieving this :
1 accommodate demand,
2 assure quality,
3 minimize counterfeiting.
2 and 3 are a function of note design”
Currency Research - Review Seminar
The Bank of England
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
3) Security of the Banknote, and
design trends- Summary
Trend to look at what is most cost effective on what denomination, issuing cost and society costs , less features but more expensive features
Trend to protect against scanners and printers (cost 1995 :$10,000+ today $100)
Best new feature of the month sometimes problematic
Trend to measure : survey’s , formulas;
Trend to independent consultant advising vs vendor
Trend to harsher penalties for counterfeiting
Currency Research - Review Seminar
4) Demand Issues and Trends Software forecasting models growing in use
Contingency planning is growing stock holdings
ATM growth drives demand
Debit card “cash back” growth
Payment studies showing growth where intuitively decline should be happening
Outsourcing tends to increase stock holding by commercial banks
Legislation of high denomination use no real effect
Currency Research - Review Seminar
5) Intellectual Property Trends Who owns banknote design
Cost of proprietary security feature
New companies in detector and authentication field
Who owns sorting IP, development IP
Trend to ask questions , maintain more flexibility and
ownership for the Central Bank
Trend to try to have vendors license for “reasonable”
fees
Currency Research - Review Seminar
6) Production Issues Trends Federal Reserve 100
ECB second generation delays
Swiss delays
RB India testing
Trend is to look more on the effect on new security features and banknote design?
Trend is to be more cautious on new features demanding “leading edge” “proven” technology paradox and for vendors for first to introduce in smaller countries.
Currency Research - Review Seminar
7) Standards Trends Detector interface standards
IACA Banknote guidelines
Reporting standards
IACA Tendering and Testing standards
IACA Agent and Distributor standards
IACA Payment study standards
Trend is to demand more standardization
Currency Research - Review Seminar
Currency Research - Review Seminar
Regulation and Circulation
Trends 8) Business practices, cost reduction
9) Contingency planning
10) Low denomination soiling
11) Commercial regulations on circulation
12) Automation, vendor interaction
13) Serial number use
14) Money laundering
15) Philosophical issues, payment methods
Currency Research - Review Seminar
8) Business Practices, Cost
Reduction Trends Trend to look at the Central Bank as a business
Society costs versus central bank costs
Trend to implementing a business practice mentality
into bank operations
Negotiations with separate substrate, print, security
vendors or with one vendor
Trend to long term contracts with service level
agreements (note life)
Currency Research - Review Seminar
Future Plans
The BSP envisions to further improve
its service level, expand its
operation, and offer a more efficient
cash management service.
Three (3) main objectives:
1. Elevate the level of cash
management services to banks;
2. Strive to a more efficient and cost
effective cash management system;
and
3. Ensure the sustained
implementation of our Clean Note
Policy.
Cash Management
CENTER
9) Contingency Planning
Trends Earthquakes in New Zealand
Tsunami in Japan and South East Asia
Floods in Thailand
Civil unrest in Europe
Currency uncertainty in Argentina 2001,Greece 2012
Financial uncertainty in world centers
Currency Research - Review Seminar
Currency Research - Review Seminar
10) Low Denomination Soiling Major issues partly due to outsourcing and commercial
costs
Bank of England study with HSBC and Sainsbury
Distribution and collection issues
Substrate, coin, varnish, public education
Currency Research - Review Seminar
Presentation at Banknote
December ,2012
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
11) Commercial Circulation
Regulations Trends Fitness standards
Fitness sorting requirements
Authentication requirements
Coin sorting requirements
Automation requirements
Reporting requirements
And the next new requirement
Currency Research - Review Seminar
Future developments in the cash cycle
Greater standardisation
Greater automation
Greater cooperation between cash handlers
Greater degree of monitoring by central bank of private
cash recycling operations
Greater efficiency in the area of cash handling
6 November 2012
Page 68
Ralph Rotzler, Head of Division for Cash Payments and Cash Processing Machines, Deutsche Bundesbank
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
12) Automation , Vendor
Interaction Trends Trend is to look at next generation of sorters before
designing notes
Trend is to recognize early vendor and community
involvement is needed in banknote design and release
Trend is to consider technology and reporting
requirements to meet central bank regulation during
note design
Summarizing the trend is much more “community”
involvement from very early stages
Currency Research - Review Seminar
13) Serial Number Use Trend Financial
Political
Technical
Commercial application vs. central bank application vs
law enforcement application
Counterfeits, “shrinkage”, soiling uses commercially
Trend is to “study” , vendor push but no pull
Currency Research - Review Seminar
14) Money Laundering Trend Regulations to restrict high denomination use
New overheads (costs) for commercial reporting
Cash anonymity threat
Technology to track here now (serial numbers for one)
Trend is to regulate more but have not seen active real
time monitoring (yet)
Currency Research - Review Seminar
15) Philosophical Issues,
Payment Methods Trends Can a central bank support cash
Are central banks killing cash
Credit cards “war on cash”
IACA role
Trend is to study
Now some Central banks looking at the question of
“issuing” non banknote currency
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
Currency Research - Review Seminar
Summary of Trends Cash is still growing
Cash is a key element in contingency management and
planning
The trends identified are in constant change
Threats continue in the form of counterfeiting and costs
Alternative media, payment forms and technologies
continue to challenge the use and business case for
cash.
Currency Research - Review Seminar