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SPECIMEN: ISSUE 7

SPECIMEN magazine

Swipe your next edition!The fully interactive version is available on iPad and Android tablets.

Look for Guardian Publications on the iPad App Store or Google Play.

2 From the Editor’s DeskCCL Secure brings exciting new opportunities to the banknote arena.

INSIGHT

3 Keeping You NotifiedCash handling best practice – the new e-learning experience. Consultancy and Advisory Services Provider of the Year (Bespoke) award.

SPECIAL REPORT

4 Good on Guardian™ Polymer: New Counterfeiting Data From MexicoGuardian™ banknotes dramatically reduce counterfeiting in Mexico.

FEATURE STORY

6 Big, Bold & Beautiful Innovative polymer banknote design has moved to the next level of security and sophistication as its fast-evolving windows feature takes on larger-than-life proportions.

BEST PRACTICE

14 Best Practice in Government Communications With the PublicStrategic partnerships are critical for the success of a series launch.

SPECIMEN EXCLUSIVE

16 A New Equation in Banknotes: IS + BCA = CCL SecureCCL Secure merges two world-class companies to form a new business with a focus on high-security products.

TREND ANALYSIS

18 Evidence and Implications of the Global Trend Towards Machine Handling of BanknotesGrowing mechanisation of the cash cycle poses challenges for central banks.

INDUSTRY INTERVIEW

22 7 Layer: Big Data Solution for BanksPhil Ball, Technical Director of 7 Layer Solutions, explains what Big Data is and how it can benefit a central bank.

RESEARCH & DEVELOPMENT

24 Wigton Counterfeiting Laboratory: Open for BusinessDr Simon Buckley, Manager of Analytical Services, gives his thoughts on the testing and analysis of counterfeit polymer banknotes by Innovia Films.

Contents

3CCL Secure has been named the Consultancy and Advisory Services Provider of the Year (Bespoke) by

leading industry publication, Central Banking.

16As the world’s dominant supplier of polymer banknote substrate under its Guardian™

brand, CCL Secure now aims to double its current 4% market share in the banknote industry over the next five years.

6Our feature story, “Big, Bold & Beautiful”, looks at ways the window feature has been applied

in contemporary banknote designs around the world.

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Cash handling best practice — the new e-learning experience

New banknote technology is supported by online training for cash handlers.

As part of its continuous improvement program, PolyTeQ Services has developed

three e-learning modules designed as best practice for assisting cash handlers in aspects of cash processing.

Based on many years of experience in handling Guardian™ polymer banknotes, the modules help cash handlers to ensure efficient and effective processing of banknotes. The techniques are equally effective for polymer and paper banknotes.

The three modules cover packing and unpacking, manual counting techniques and quality sorting of banknotes.

Although polymer banknotes process similarly to paper banknotes, there are subtle differences in the way these notes should be packed and unpacked. Polymer banknotes are very durable and hard to tear but, if accidentally cut, the tear propagation is different to paper. Consequently, the use of open-faced knives when opening packets of banknotes is

strongly discouraged. To extend the durability of polymer banknotes even further, they should not be folded for storage but retained flat or on edge.

Polymer banknotes feel and behave slightly differently to paper notes. The second module demonstrates the most common and effective manual counting techniques.

Quality sorting of banknotes is a very important aspect of cash processing. The third module provides a visual presentation of the most common forms of unfit banknotes.

The e-learning modules will initially be provided in English, Spanish, French and Arabic. As the need arises, translations into other languages can be produced.

It is envisaged that these modules will be incorporated into PolyTeQ’s current training programs for central banks, commercial banks, CITs and large retail organisations. This will ensure they reach a wide audience. They can also be used as a refresher course on an ongoing basis.

Consultancy and Advisory Services Provider of the Year (Bespoke) award

CCL Secure wins top industry award.

CCL Secure, formerly known as Innovia Security (page 16), has been named the Consultancy

and Advisory Services Provider of the Year (Bespoke) by leading industry publication, Central Banking.

When announcing the award, Central Banking said, “Polymer banknote provider Innovia Security offers a suite of advisory services from design through to recycling to prepare central banks for the transition to ‘plastic’ banknotes, as highlighted in Nicaragua.”

“We ran a number of tailored seminars with the central bank [of Nicaragua] to ensure the transition from paper to polymer was as smooth as possible,” said Bernhard Imbach, CCL Secure’s Vice President and Managing Director.

“We do not like to leave our clients alone, and so we had a range of courses ready on hand for them.”

“Innovia’s contributions have been fundamental for the project’s development — the range of issues on which the company provides advice, and their disposition to contribute to our central bank success,” said Guillermo Selva, Currency Executive, Central Bank of Nicaragua.

But it was the collaboration with local recyclers that was deemed most impressive by Central Banking.

“The central bank had always intended to work with a recycling program to reduce our impact on the environment,” said Selva.

“Following work undertaken by Innovia, we were able to find a viable option for recycling the banknotes as part of the Guardian™ Global Recycling Program.”

Central Banking noted, “Innovia’s consultancy services span all the way from the benefits of polymer adoption to note recycling. But a number of central banks

also take advantage of Innovia’s marketing services to ensure members of the public remain confident in their currency once a shift is made to polymer notes.”

“We are now in a new era of banknote production, and it is imperative the public trusts the currency. Without confidence, the notes will not be a success,” concluded Imbach.

Quotes from Central Banking’s interview

available from www.centralbanking.com

CCL Secure brings exciting new opportunities to the banknote arena.

Many significant innovations and milestones have been achieved in the use of Guardian™ polymer substrate since the last edition of SPECIMEN. In this issue we explore how creative design and new technology, coupled with collaborative partnerships and peerless passion, can turn big concepts into reality.

One of the biggest milestones for Innovia was the acquisition of the business in February this year by CCL Industries and our subsequent rebranding as CCL Secure. As part of CCL Industries, which has

a significant worldwide commercial footprint, we now have greater opportunities to drive further market growth in polymer banknotes. Read more on page 16.

Our rebranding closely follows the announcement that we were awarded the Consultancy and Advisory Services Provider of the Year (Bespoke) award by leading industry publication Central Banking. This award recognises our trusted advisory services and collaboration with local partners.

In SPECIMEN 7, we take you around the world to bring you the latest insights from the industry and present the endless possibilities of polymer banknotes.

We start in Mexico, exploring how Guardian™ banknotes have led to significant reductions in counterfeiting. Next, we follow the design journey of the revolutionary window feature on polymer banknotes in Canada, New Zealand, the United Kingdom and Australia. Crossing the ocean, we head to Vanuatu to look at how the Reserve Bank of Vanuatu and CCL Secure’s PolyTeQ Services collaborated to design and launch an upgraded new series. In England, we interview software company 7 Layer Solutions and learn more about the power of big data in the cash cycle. We also talk to Dr Simon Buckley, Manager of Analytical Services at Innovia Films, about the work being done at the Wigton Counterfeiting Laboratory.

And wherever you are in the world, you now have online access to three recently launched e-learning modules, supporting cash handlers with education on best-practice processing of polymer banknotes.

CCL Secure is committed to delivering outstanding innovation, quality and service. I hope you enjoy SPECIMEN 7 and that it inspires a new polymer possibility.

Pilar Ruperti Editor

From the Editor’s Desk Keeping You Notified

Editorial Team

Editor Pilar Ruperti Editorial Consultant Lorna Hendry

Contributors Carlos Almenar Andrew BayliffSteve CaseyChris CatlinBrian HayrRaul Sierra John Winchcombe

Design Next Brand Strategy & Design

INSIGHT

John Winchcombe accepts the Central Banking award on behalf of CCL Secure.

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Good on Guardian™ Polymer: New Counterfeiting Data From Mexico

Guardian™ banknotes dramatically reduce counterfeiting in Mexico.

Banco de México produces and issues banknotes in six denominations: $20 and $50 printed on Guardian™ and $100, $200,

$500 and $1000 printed on cotton paper. In 2005, the $50 paper banknote was the

most counterfeited denomination. Counterfeits of this note dropped dramatically following the introduction of the $50 Guardian™ polymer banknote in 2006, from 249.3ppm in 2005 to 31.6ppm in 2009. By 2009, the $50 polymer note had become the second least counterfeited denomination, after the $20 Guardian™ polymer note.

In 2010, the $50 note was attacked by professional counterfeiters who had access to significant resources and sophisticated technologies. Banco de México upgraded the design of the $50 note and a new version was issued in May 2013. The new design, and the arrest of the counterfeiters, had an immediate effect on the number of counterfeits.

In 2016, the $50 and $20 banknotes were once again the least counterfeited notes in Mexico. The evolution of the counterfeits in the past eleven years is shown in the table opposite.

The impact of introducing Guardian™ banknotes and updating security features is shown in Figure 1 (opposite).

The participation of every denomination in circulation and the percentage of counterfeit notes in 2016 is shown in Figure 2 (opposite).

All the intercepted counterfeits of the $20 and $50 banknotes, with the exception of the ones from the professional attack in 2010, were paper rather than polymer.

Although it is generally accepted that no banknotes are completely counterfeit-proof, there is substantial evidence that Guardian™ banknotes are much more resistant to counterfeiting and more difficult to imitate. COUNTERFEITS (PPM) JANUARY TO DECEMBER

Year $20 $50 $100 $200 $500 $1000 Total

2006 0.7 253.7 129.7 105.8 84.9 153.8 118.3

2007 0.6 135.3 88.7 92.6 105.8 454.1 94.9

2008 1.1 64.4 104.2 118.5 113.6 507.4 97.0

2009 3.4 31.6 96.2 158.6 104.7 445.0 100.2

2010 2.9 73.4 116.7 158.9 107.2 256.4 107.5

2011 1.4 238.5 106.3 146.8 107.0 159.7 123.3

2012 0.2 310.8 93.0 117.0 111.6 130.1 125.2

2013 0.4 101.7 121.4 144.9 131.9 129.3 113.4

2014 0.1 26.8 90.2 106.6 79.0 104.3 71.6

2015 1.2 23.9 98.5 94.7 81.4 88.1 70.7

2016 1.3 16.4 79.7 87.6 74.1 82.8 61.8

Source: Banco de México website www.banxico.com

Figure 1: Counterfeit notes in Mexico, 2006–2016

2006 2008 2010 2012 2014 2016

Guardian™ $50

Guardian™ New $50

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GUARDIAN ™ PAPER

Notes in circulation 24.4% 75.6%

Counterfeit notes 3.5% 96.5%

Data clearly indicates that Guardian™ based denominations are subject to significantly lower degrees of counterfeiting when compared to paper based denominations.

$1000$500$200$100$50$20

Figure 2: Participation and counterfeit notes in Mexico, by denomination, 2016

$20 $50 $100 $200 $500 $1000

< Guardian™ Paper >

50%

40%

30%

20%

10%

0%

% Guardian™ notes in circulation

% paper notes in circulation

% counterfeits

SPECIAL REPORT

BY RAUL SIERRA

In 2016, the $50 and $20 banknotes were once again the least counterfeited notes in Mexico.

The new Mexican $50 note.The introduction of the new $50 note contributed significantly to the reduction in counterfeiting.

Guardian™ banknotes

Guardian™ and paper-based co-circulation

Paper-based banknotes

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True to its thematic aspirations, the Charles Darwin Guardian™ banknote released in December 2012 was one of the markers of

the next evolution in windows design. At the time, critics of the note regarded the design as too bold and not relevant to the real-life requirements of a central bank’s needs. However, supporters of the note recognised the advanced nature of the design. The windows were large and complex and designed in both horizontal and vertical planes, third-party features were integrated for enhanced security, and features including foil and SPARK® were used to create different aesthetics on the front and back of the note.

“Designing for polymer banknotes is a three-dimensional challenge, and the Darwin Note is a flagship example of managing the inherent tension between functionality and design. It really is a tug of war between art and science,” says Michael Kavanagh, Senior Substrate Designer at CCL Secure, who heads the team responsible for translating the concept design for the substrate into artwork for the press.

“The science refers to the fully transparent substrate, the security features, the print layers and their sequence, and how the tolerance rules are applied. The art is the theme of the series’ design elements, its balance across the note, and of course its colour. In banknote design,

whenever a change is made there’s a domino effect as the change translates down to the substrate design as well. We’re required to adjust a series of design elements to retain the note’s manufacturability.”

The Canadian Series: New frontier in window designThe Darwin Note was a perfect complement to the Bank of Canada’s breakthrough hundred dollar note design. Released in 2011, this was the first of the bank’s Guardian™ polymer banknotes that are at the heart of its Frontiers series. The window size was unlike anything designed previously, and was notable for its frameless character. The clever use of spot colours in the shape of maple leaves that flowed down the boundaries of the window provided

the tolerance needed to account for movement of the offset print layers. In previous generations of the note this was done using more obvious opacification layer framing.

“The idea of the frameless window came from the bank’s need for greater complexity around the window area. They saw that colour added security and also reinforced the aesthetic of a distinctive note colour. It was very innovative and the bank wanted to make the note as secure and sophisticated as possible. They definitely achieved that and it was groundbreaking at the time,” says Amanda Jones, CCL Secure’s Concept Designer, who supported the Canadian banknote design team who created the Frontiers series.

The large foil from KURZ that extends the length of the window is also a stand-out feature and a key means of authentication for the Canadian public. Functionally, the foil was used in combination with the substrate printing process to ensure continuity along the note edge for machine readers, while the window edge has an hourglass shape that enables the clear window area to be maximised.

The large size of the window with the foil has proven extremely difficult to counterfeit. Data released by the Bank of Canada confirms that counterfeits are of poor quality and in low

FEATURE STORY

Big, Bold & Beautiful

BY STEVE CASEY

Innovative polymer banknote design has moved to the next level of security and sophistication as its fast-evolving window feature takes on larger-than-life proportions.

The large size of the window with the foil has proven extremely difficult to counterfeit. The Bank of Canada confirms that counterfeits are of poor quality and in low numbers.

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numbers. Attempts to counterfeit the polymer notes have been below 1ppm since they were first issued six years ago.

“The close collaboration of suppliers was a key factor in creating well-integrated and effective security features that have proven to be very effective against counterfeiting,” says Jorge Peral, Vice President and Design Master Engraver at Canadian Bank Note Company (CBN).

The Bank of Canada won the International Association of Currency Affairs “Banknote Series of the Year” award in 2013.

The New Zealand Series: A window of collaborationPeral and his team used the Canadian experience to full effect when CBN won the tender to design and print the Reserve Bank of New Zealand’s (RBNZ) new note series in 2012. One of the success factors for the RBNZ was

the detailed design brief it issued as part of the design tender. The vision and detail presented in this document are considered a benchmark in the banknote design industry. It left no doubt about what the central bank wanted to achieve in its new series, both aesthetically and functionally.

“A great advantage of working with RBNZ was that the research done before design

started was brilliant and exemplary. Its direction and design expectations were clear and very well defined. Consequently, its expectations were clear and easy to understand from the beginning,” says Peral.

As a result of the RBNZ’s collaborative approach with its suppliers (see SPECIMEN Issue 6 for the full story), CBN’s innovative work with KBA-NotaSys and KURZ during a time of enormous technical challenge created yet another first on polymer – the foil patch in the clear window area. While CCL Secure had applied the foil for the Canadian series, CBN decided to take on foiling of the New Zealand series. Not only were they learning how to foil on polymer, at the same they were also innovating with a leading edge foil application technique.

“To produce the patch on the polymer window, we had to develop major improvements on machine, foil and application process in

record time. This was achieved with a great team working seamlessly across multiple organisations,” says Michael Hans, Vice President of Operations and Chief Engineer at CBN.

Surrounding the foil patch is a complex window that pushed the design innovation edge even further. The use of two spot colours and white ink on the substrate was used to frame the window, this time creating a rounded window edge top and bottom over which offset was printed. The layers were interwoven to create a highly complex design that combined front and back into a single design. Half windows on both sides of the note were combined with complex bordering on the top and bottom.

“Every single layer, whether a white or a spot colour, has its own unique shape, which is a new development in polymer banknote design,” says Kavanagh. “The clever aspect of this design

is that the movement in each layer is disguised by its relationship with the design elements on other layers. From a substrate design perspective, this was challenging for us to build. Every substrate layer needed to be constructed to create a window whose design elements always appear tightly connected, regardless of movement.”

The new New Zealand five dollar note received international acclaim when the International Bank Note Society declared it the

“2015 Banknote of the Year”.

The UK Series: Tradition modernisedAs the RBNZ was in the formative stages of designing its new series in 2014, the Bank of England’s The New Fiver project was on the verge of a bold public engagement campaign about its proposed polymer banknote.

While a large window area was an aspiration for The New Fiver, the bank went through

numerous iterations of the window shape as it strived for a modern design that was tempered by the traditions that were the hallmark of the world’s oldest note-issuing authority.

The Bank of England committed to an exhaustive process, which began in 2009 and ran for several years prior to the start of the design process for The New Fiver. Various substrates and new security features were analysed and assessed. The credibility of the bank’s decision-making and rationale for moving to Guardian™ polymer was highly influential. There was significant interest from the banknote industry about how the most traditional of central banks would work with this very modern banknote substrate.

“While the front remains traditional, the reverse side of the note is quite modern,” says John Walker, who has designed for CCL Secure for many years and played a formative role in concept design development and window

CBN’s innovative work with KBA-NotaSys and KURZ during a time of enormous technical challenge created yet another first on polymer — the foil patch in the clear window area.

Michael Kavanagh, Senior Substrate Designer at CCL Secure.

The Canadian and New Zealand series pushed design innovation even further with their frameless and complex windows.

Jorge Peral, Vice President and Design Master Engraver at Canadian Bank Note Company.

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design for the new British polymer note series. “With the public in mind, changing to polymer substrate as well as changing the note size meant the bank was keen to retain strongly familiar design elements while incorporating the largest window it reasonably could. The bank was interested in more window space and the design outcome was a significant achievement.”

The New Fiver holds a unique position amongst the latest crop of the world’s most interesting and sophisticated Guardian™ polymer banknotes. Although the window framing is not as complex as its contemporaries, the foil work is extremely detailed, presenting a multi-faceted medium with gold on the front and silver on the reverse. This combines with a small half-window of turquoise colour on the reverse side to provide one of the most vibrant features present on any banknote in the market. Together with the detailed Cameo™ of the Queen, the window structure is more horizontal than vertical, and has strong counterfeit resistance.

Walker says, “This was a very successful collaboration with the Bank of England, linking the strengths of both CCL Secure and KURZ technologies to create a highly secure banknote. From my perspective, the note design fulfilled the aspirations of the team in terms of the technology we wanted to get into the note, and the public has immediately accepted it. Clear polymer brings out the best in so many features because of the transmission of light, and The New Fiver is a great example of how polymer substrate can optimise the effectiveness of these security features.”

“With the major design aesthetics in place, the NPA design team had the challenge of creating a complex window, which involved making a 20–25mm visual break in the note look visually continuous.

The Australian Series: Design leads technologyThe move to large windows has been pushed even further with the 2016 release of the new Australian five dollar note, which features a spectacular top-to-bottom window.

Dean McGrath was Design Manager at Note Printing Australia (NPA) when the new series was on the drawing board. In its efforts to think outside the square, the Reserve Bank of Australia (RBA) developed the early concepts for the new Australian series with Emery Studio in 2010. These designs called for a complete top-to-bottom window.

“The constraint with any ambitiously designed banknote is to make it manufacturable. The top-to-bottom window forced us to create technical solutions to make this design a reality, which was a huge challenge. What quickly emerged was an infrared edge feature to the clear window and the Ghost varnish project was launched (around 2011). The RBA wanted to set a new innovation benchmark,” says McGrath.

Product development needed to keep up with design. Bernhard Imbach (CEO of NPA at the time) told the design team to be highly innovative in its response to the Emery Studio’s concepts, and required the technical team to support the design vision.

“With the major design aesthetics in place, the NPA design team had the challenge of creating a complex window, which involved making a 20–25mm visual break in the note look visually continuous. The other challenge was to retain enough elements of the old design to keep it looking familiar to the public as a five dollar note,” says Rob Cook, current NPA Design Manager.

Introducing the radical window also required NPA to draw on the traditional references of colour and portrait as key elements in retaining public familiarity. The original $5 note was based on old print technology and used older design techniques.

“We reinterpreted the micro and macro pattern work to get the colour saturation that is synonymous with the Australian banknote look,” says McGrath. “The Singapore notes and

UK Fiver have high offset integrity and we needed to meet and push that. Large amounts of integrated pattern work that makes offset the hero is a distinguishing feature of our note family and we took full advantage of the SUSI 4 press.”

Cook describes a high level of plate-to-plate registration of offset layers, which is a defining feature of the new series and a good example of how larger window design created a positive impact on the design features for the rest of the note’s design.

“We pushed KBA NotaSys and ourselves to find as much capability in the press as possible. This required significant trialling to deliver that result,” says Cook. “The original design had large offset areas, so something needed to happen in those areas — both aesthetically and also to maximise counterfeit resistance.”

In addition to colour saturation, Cook and the design team used other techniques to bridge the visual gap created by the clear window. This included ensuring the offset at each end of the note was the same colour, creating a visual connection with the placement of spot-colour wattle flowers along the window edge, and the introduction of a sweeping window shape.

“There was no silver bullet. This was an exercise in visual integration in which all these factors combined to soften the gap, completed with the inclusion of a KINEGRAM ZERO. The ZERO® foil patch by KURZ features an Eastern Spinebill honeyeater and finely detailed wattle flowers, as well as other iconic Australian images,” says Cook.

Future polymer banknote design: Continuing collaborationCook has no doubt that design gains can be made through end-to-end design collaboration between the central bank and its suppliers.

“Future collaborations that involve designing with polymer substrate must consider the transparency of the film itself as a part of the design process. It’s a different type of thinking and requires the designer to view polymer as a platform. This is the next step in achieving full integration between substrate and banknote design,” he says.

Cook also believes the future of polymer banknote design will reach its full potential when the central banks and their suppliers fully integrate their design approach. “If we could work as an integrated team across substrate, feature and banknote design, we could work together on a singular note design in which all parts work together to create a single visual narrative across the note,” says Cook.

Walker believes it’s important to involve the public and other commercial interests at the very outset of the design process. Involving the public in some decision-making processes, such as the choice of subject matter, helps give them a sense of ownership of the final design.

“Banks should provide the media with early notice of intention to issue a new design to help spread the message and explain the reasons

for the change. Gaining the public’s approval and trust early on in the process is vital for the success of the new design,” says Walker.

Careful choice of designer is also important, particularly when it comes to designing for polymer. There are some differences when designing for polymer over paper and selecting a designer with experience of polymer and the processes involved in the manufacture and use of polymer banknotes and security features will make the process far more fluid and lessen any potential issues in production.

Cook agrees, and builds on the idea that effective banknote design comes down to public perception. He believes there is a balance of recognition of individual features versus design integration.

“You still need to communicate to the public, so a certain degree of visual separation is useful for public consumption. For example, on the new Swiss 50 franc it could be argued that the public miss some of the features because they are so beautifully integrated into the overall design,” says Cook.

McGrath sums up the key to success in the world of polymer banknote design well.

“The front-end organisation and preparation ahead of any design is vital,” he says. “For a design team, competence and confidence feed off each other. If the brief is well thought through and clearly represents the central bank’s vision for the design, this engenders confidence in a technically competent design team. They have the skills, they understand the constraints, and they know what they’re trying to achieve. When you get that combination right, really exciting things can happen.”

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Cook also believes that the future of polymer banknote design will reach its full potential when the central banks and their suppliers fully integrate their design approach.

5mm engraving on £5 note

Graham Short, one of the world’s leading micro-engravers, commemorated the 200th

anniversary of author Jane Austen’s death by engraving her portrait on five of the Bank of England’s new five pound notes.

Austen’s portrait and a quote from one of her works were engraved in the transparent section of the notes, which is just 5mm wide.

In partnership with Tony Huggins-Haig Gallery, Short distributed the notes across Great Britain late last year, intending to bring Christmas joy to the people who discovered them.

The public has been so enthralled by the initiative that the media have compared the notes to Willy Wonka’s Golden Tickets. The lucky owners of the three notes that have been found so far have chosen to keep them, even though they are said to be worth up to £50,000 each.

Although visible to the naked eye when titled at a certain angle, a microscope is required to see the portraits in their full glory.

Short’s tiny works, including the smallest-ever portrait of the Queen engraved on a fleck of gold in the eye of a needle, take months to complete. 

His secret? He wears a stethoscope while he works to allow him to engrave in the moments between his own heartbeats. He sometimes waits up to 20 minutes for the perfect moment to slice. He also works late at night to avoid the rumbling of traffic, receives regular botox injections to hold his eye muscles steady and steers clear of coffee to keep his heart rate down.

The Austen portraits are a testament to Short’s painstaking commitment, as well as the endless, unique possibilities of polymer banknotes.

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John Walker is a highly experienced polymer banknote designer who has created many Guardian™ polymer concept designs, including contributions to the recently released Bank of England polymer banknote series.

The new Australian $5 note features the world’s first top-to-bottom window.

Left to right: Dean McGrath, NPA Manufacturing Manager, and Robert Cook, NPA Design Manager.

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A window into the future of banknote securityIntroducing the world’s first top-to-bottom window on the next generation of Australian banknotes.

The new Australian $5 has recorded an impressive first in polymer banknote security by

extending its complex frameless clear window from top to bottom, creating a new standard in counterfeit resistance on Guardian™ polymer banknotes.

Along with the innovative new design, other newly updated features include Spark® Live, fluorescent ink, and a hard-

embossed tactile feature to assist people who are blind or have low vision. Celebrating native Australian flora and fauna, the design also includes the Prickly Moses Wattle and Eastern Spinebill bird.

The new $10 polymer note will be launched in September 2017 and will feature the same top-to-bottom window feature. Other Australian denominations will also be upgraded over the coming years to

deliver next-generation security for a next-generation banknote series.

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The preparation for a new series of banknotes requires significant planning by a central bank, and normally commences years

before the actual launch.In 2012, the Reserve Bank of Australia

announced the Next Generation Banknote Program with the emphasis on upgrading security of the existing series. The first note of this Next Generation series was launched in September 2016.

Similarly, in 2013 the Bank of England began a program of public consultation with retailers, businesses and cash industry stakeholders to gather information prior to the 2016 launch of The New Fiver on Guardian™ polymer substrate.

During the long lead time, central banks consult with many different interest groups,

including cash handlers, banknote equipment manufacturers and community groups such as the vision-impaired. These consultations provide input into the design of the new series of banknotes.

Once the design and theme of the new series have been determined, central banks usually announce general details of the new series to the public, such as the characters or cultural icons that will appear on the banknotes.

Some central banks focus on themes with clear messages. The Bank of Canada (BoC) has previously had series such as the Canadian Journey and Birds of Canada series. The current Polymer Series is described by BoC as “highly secure, durable, innovative and a celebration of Canada’s achievements at home, around

the world and in space”. The Reserve Bank of New Zealand’s new series is the Brighter Money Series 7. It retains key elements of Series 6, such as characters and Guardian™ polymer substrate, but “includes improved security features, vibrant imagery and innovative design”.

Public announcements prior to the launch are key elements of preparing the general public for the new series of banknotes. In the lead up, central banks also implement education and publicity strategies to ensure the general public, retailers and businesses are fully aware of what the new banknotes look like and can readily identify the security features that authenticate the notes.

Central banks also engage with key stakeholders such as law enforcement, commercial banks, cash handlers in CITs and casinos in preparation for the launch. Outreach programs using focus groups and ambassadors enable central banks to reach a wide audience and get feedback on their launch strategy.

Communication using a range of media is an integral part of a central bank’s armoury. Press releases and interviews with key central bank personnel provide inexpensive opportunities for key messages to be conveyed. Paid advertising on television, radio and

newspapers outlining design and security features ensures the widespread dissemination of important information about the new series. The establishment of dedicated websites and Twitter and Facebook accounts enable central banks to use social media to the greatest advantage. Q&A briefing notes add value to a communication program. Posters, pamphlets and other printed material demonstrating key elements and security features are tangible support material.

Central bank collaboration with the education sector captures a key audience group

— younger people — and gives them firsthand experience with the new series. They then spread the message to their parents and other adults.

The central bank will consider the appropriate timing for the delivery of key messages leading up to the launch so as to consolidate and re-enforce the understanding of everyone about key elements of the new notes, especially authentication processes. Advice on the removal of the old series from circulation, if applicable, will also be advised.

Central banks monitor both social and traditional media to gauge the effectiveness of their communication plan. They set up

opportunities for the general public and other vested interest groups to comment on the new banknotes. The period immediately after the launch normally generates considerable commentary on the note and its acceptance.

Some central banks may not have the internal resources or expertise to design and implement a new series banknote program. These central banks look for third-party assistance by way of tender or collaboration.

PolyTeQ Services, with its extensive experience assisting central banks issuing banknotes on Guardian™ polymer substrate, working with CCL Secure’s extensive expertise in substrate and banknote design, can assist central banks that wish to upgrade their existing banknotes.

A good example is the partnership between the Reserve Bank of Vanuatu, CCL Secure and PolyTeQ Services. Vanuatu is a small island country in the Pacific. When looking for a new upgraded series, its central bank needed assistance with the design and launch program. In collaboration with CCL Secure, the bank designed a series of notes on Guardian™ polymer substrate that were secure, culturally appropriate and aesthetically appealing to the

citizens of Vanuatu.PolyTeQ Services assisted the Reserve Bank

of Vanuatu with guidance on a launch program for the new series. The strategy included education, publicity and Q&A briefing notes on the new Guardian™ polymer substrate, security features and banknote design. Advice on cash handling, adjustments to cash processing equipment and liaison with key stakeholders ensured a successful transition from the old series to the new.

PolyTeQ Services also provides ongoing support to central banks after a new series has been launched, through periodic performance reviews of notes in circulation and advice on recycling of banknote waste once the notes are no longer fit for purpose and withdrawn from circulation.

PolyTeQ Services has provided similar assistance to many other central banks, including the Central Bank of Nicaragua, Bank of Mozambique and the State Bank of Vietnam.

PolyTeQ Services and CCL Secure consider these services to be key factors in building long-term relationships with customers who wish to use Guardian™ polymer as the base platform for a secure, durable and cost-effective banknote series.

Best Practice in Government Communications With the PublicStrategic partnerships are critical for the success of a series launch.

BEST PRACTICE

This photography, taken for communication materials, aims to help educate the public on how to detect security features of a new series.

Vanuatu’s new series of notes were designed and launched in partnership between the Reserve Bank of Vanuatu, CCL Secure and PolyTeQ Services.

The new $20 banknote was literally brought to life with the kãrearea — New Zealand falcon — on display at Government House during the launch of the Brighter Money Series 7 by the Governor-General, Lt Gen the Rt Hon Sir Jerry Mateparae.

BY CHRIS CATLIN

In collaboration with CCL Secure, the bank designed a series of notes on Guardian™ polymer substrate that were secure, culturally appropriate and aesthetically appealing to the citizens of Vanuatu.

The New Fiver was launched as cleaner, safer and stronger.

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SPECIMEN EXCLUSIVE SPECIMEN: ISSUE 7 SPECIMEN: ISSUE 7

One of Canada’s quiet achievers, CCL Industries, has moved into the security printing industry with two deft acquisitions

— Banknote Corporation of America (BCA) in 2016 and Innovia Security (IS) in 2017 — that are being merged to create CCL Secure, a new business within CCL Industries’ growing portfolio.

The transformation of CCL Industries from a domestic business to a multinational company is one of Canada’s success stories. The business has experienced strong organic growth, augmented by acquisitions, for more than a decade. Revenues reached C$4 billion in 2016 and the target for 2017 is C$5 billion.

Over the last five years, the company’s share price has grown more than 570% and it is currently trading at record highs. This rapid growth is due to a series of targeted acquisitions that has seen it move from a company exclusively focused on the home and personal-care industry to becoming a major supplier to the healthcare and chemical, food and beverage, automotive, consumer electric devices and retail markets, as well as well as Avery, with a focus on the needs of consumers and small businesses for digitally printed labels.

CCL Industries now operates in 35 countries and owns 156 facilities. It has concentrated on purchasing businesses that have a unique technology and/or customer set, such as Checkpoint, a highly innovative business that manufactures Electronic Article Surveillance (EAS) and Radio Frequency Identification (RFID) and other security devices designed for the retail industry. Checkpoint was a pioneer in EAS and

RFID source tagging, to provide clothing brands with dramatically improved logistical visibility and security across their entire supply chain. With go-to-market strategies being turned on their head by companies like Zara and H&M, RFID source tagging is growing rapidly due to the need for superior supply chain management to enable such models to work effectively.

CCL Industries is building core expertise in multiple areas. Synergy between the divisions will be used to help each one grow. The new CCL Secure business has many overlapping technologies with other business units in surface engineering, gravure printing of complex

images and the use of automated inspection systems to control quality.

“Since 2000, our company has focused on growing both organically and by acquisition to increase our geographic scope and add to our capabilities and end markets without drifting into businesses that are not related to our core technology. We have known Innovia and watched the company develop its markets and products for more than 20 years and see many opportunities to deploy its capabilities around the world,” says CCL Industries President and CEO, Geoffrey Martin.

CCL Industries is now expanding its influence into the field of high security, and aspires to use its considerable resources to drive market growth in polymer banknotes as well as other high-security products in passports and document security. The acquisition of Innovia Security, the company’s largest purchase to date, is a key driver of this strategy.

As the world’s dominant supplier of polymer banknote substrate under its Guardian™ brand,

CCL Secure now aims to double its current 4% market share in the banknote industry over the next five years. CCL Industries has offices and facilities in many markets, providing the CCL Secure team with local contacts and knowledge that will open up new opportunities in an efficient and effective way.

CCL Secure, which is headed by Vice President and Managing Director Bernhard Imbach, is already transforming its global reach thanks to CCL Industries’ global presence. Both parts of this newly formed business will continue their specialist focus, with the singular focus and expertise in developing polymer banknote technology remaining in the Australian, Mexican and UK operations.

“The business continues its drive toward creating business centres of excellence, and I am pleased with the quality management system we now have in place. Customers are signalling to us that they are experiencing a positive difference in our approach,” says Mr Imbach.

“Product quality is a foundation of the business. With this being well managed, we are now focusing on improving the performance of the product and we have the necessary resources in place to drive this program of improvement.”

At the Greensboro plant in North Carolina, the passport components, document security,

and postage stamp business is looking to grow its sales and will focus on growing into new markets. The 155-staff operation currently serves the US market and, like the polymer banknotes business, has plans to expand its business by leveraging CCL Industries’ commercial footprint.

“While we remain firmly focused on delivering the world’s best banknote substrate, we are now an important part of a larger business and this integration will continue over time based on opportunities to add value to CCL Industries,” says Mr Imbach.

“Being part of CCL also means we have a significantly greater presence in markets around the world that can assist us to win new business where we previously had minimal presence.”

SPECIMEN EXCLUSIVE

From left to right: Bernhard Imbach, CCL Secure Vice President and Managing Director, and Sandra Lane, Banknote Corporation of America Vice President.

The US operation in North Carolina focuses on passport components, document security, and postage stamps.

A New Equation in Banknotes: IS + BCA = CCL SecureCCL Secure merges two world-class companies to form a new business with a focus on high-security products.

BY STEVE CASEY

CCL Industries aspires to use its considerable resources to drive market growth in polymer banknotes.

Both parts of this newly formed business will continue their specialist focus, with the singular focus and expertise in developing polymer banknote technology remaining in the Australian, Mexican and UK operations.

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TREND ANALYSIS SPECIMEN: ISSUE 7 SPECIMEN: ISSUE 7

Figure 5: Growth in self-checkout machines by region, 2012, 2015 and 2021 (* forecast)

Figure 4: Teller cash recyclers by region, 2007, 2014 and 2019 (* forecast)

2012 2015 2021*2007 2014 2019*

Figure 1: ATMs, 2005, 2015 and 2021 (* forecast)

Figure 3: Percentage of ATMs with cash acceptors in five leading countries, 2015

Asia Pacific

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Figure 2: Deposit ATMs, 2005 and 2015

TREND ANALYSIS

SPECIMEN: ISSUE 7

Central banks who are issuing a new series of banknotes deal with many stakeholders during the design, production and release

process. Success is usually measured by the public’s acceptance of the design and awareness of new security features. To maximise acceptance among retailers, equipment manufacturers and banks, the issuing authority focuses on meeting public expectations about machine readiness at the time of the release.

Historically, central banks set aside funding for public education about overt features of the new notes. This aids counterfeit detection and allows banknote equipment manufacturers (BEMs) and retailers to lead their own authentication initiatives. Investment in cash cycle infrastructure is usually left to the market to absorb.

Machine handling trendsOver the past ten years, there has been steady growth in mechanisation in the cash cycle. In many countries, the bank teller is no longer the first line of defence for counterfeits. Many banks, retailers, unattended kiosks and cash handlers now mechanically accept, sort, authenticate and dispense cash. The growth of cash-handling equipment is an important trend that central banks need to consider when issuing a new series.

Using RBR Research data, ATMs provide a reliable long-term source of global data and give

us a hint of what the future might look like.The number of ATMs doubled between 2005

and 2015 and this growth is likely to continue (Figure 1). ATM installations in some developed economies plateaued around 2015, but many other regions appear to be catching up with this technology.

An interesting trend is the deployment and adoption of cash acceptors and cash recycling machines. These technologies are not new, but they continue to grow globally as commercial banks develop more efficient and effective cash distribution technologies and improve the customer experience.

The proportion of ATMs with cash acceptors grew dramatically between 2005 and 2015 and continues to expand (Figure 2). Fifty-eight per cent of these ATMs recycle cash, which has a material impact on cash-cycle infrastructure hardware, software and distribution costs.

The drivers of ATM cash acceptor deployment are country specific, but the figures indicate there is opportunity for growth in other regions, both developed and emerging (Figure 3). Countries with high numbers of ATMs with cash acceptors are improving the customer experience and the public’s access to cash. There will also be societal benefits in terms of the cost of distributing and securing cash.

While ATMs provide a snapshot of cash handling equipment, there are other kinds of cash acceptors, processors, dispensers and sorters. Data is not readily available on these machines, but evidence of growing adoption rates can be seen by reviewing teller cash recyclers and self-checkout machines in retailers.

Retail banks continue to invest in cash-handling equipment (Figures 4 and 5) over recruiting human resource tellers. Retailers, particularly in North America and Europe, continue to lower their cash-handling costs through innovation and offerings of multi-

channel payment options to the public.Conversely, retail cash equipment

manufacturers are developing innovative solutions for customers and the public in the cash cycle. There has been considerable change over the last ten years in retail bank and merchant business models, as they develop new digital technologies while maintaining cash payment platforms. Every country (and issuing authority) has its own drivers and level of adoption of technology. However, there is an underlying trend for increased mechanisation in both developed and emerging economies. There is significant variation in technology adoption. Emerging economies can benefit from technology developments which enable them to leapfrog traditional paths to advanced technologies in the cash cycle.

While no data is available on high-speed cash-handling equipment, it could be inferred that this sector will continue to expand in line with the growth of cash. However, there remains a question about the substitution effect of retail desktop equipment. In some countries, many cash-in-transit centres, banks and retailers are using new desktop equipment to fitness sort and authenticate their own cash.

Implications for central banksCentral banks should factor in ten-year forward planning for any new banknote series. The design and feature selection should reflect the cash cycle and current counterfeit trends in their country, as well as the likely ten-year investment trends for equipment purchases by cash cycle stakeholders.

Technology is driving down unit prices and increasing capability to retailers, so engagement with BEMs and users is becoming much more important. The impact of a new series on cash-cycle infrastructure is increasingly complex, as there is now a wider range of equipment and more retail participants. BEMs often have to upgrade both their hardware and software, and multiple calibrations of denominations add to this task.

As alternative payment methods become more common, there is a risk that the costs of upgrading cash infrastructure in order to cope with a new banknote series will drive merchants to other payment methods. In some countries, we are now starting to see retailers who only accept electronic payment methods. Central banks need to consider the impact of change on retail upgrades in the context of competing payment forms. Ideally, retailers should be

Evidence and Implications of the Global Trend Towards Machine Handling of BanknotesGrowing mechanisation of the cash cycle poses challenges for central banks.

BY BRIAN HAYR

An interesting trend is the deployment and adoption of cash acceptors and cash recycling machines.

Recirculating poor quality or fake notes in a mechanised cash cycle increases counterfeit risk and creates poor customer experiences.

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advocates for a new series of counterfeit-resilient banknotes.

Evolving distributed cash models (Figure 6), are becoming more common. Mechanical authentication and fitness sorting often take place outside the central bank cash centres or areas of control. Central banks need to develop policies to facilitate a more efficient and effective cash cycle that identify counterfeits at the source and encourage the early withdrawal or repatriation of unfit, mutilated and possible counterfeit banknotes. Recirculating poor quality or fake notes in a mechanised cash cycle increases counterfeit risk and creates poor customer experiences.

Automated cash acceptors can handle large volumes of banknotes — more than a cash operator. Poor Level 2 security features in a banknote, combined with poor authentication capability in equipment like cash acceptors, increase the counterfeit risk. There is little point

in a central bank investing in high-quality Level 2 machine-readable features if the market can’t or won’t deploy the authentication capability. Likewise, if a central bank invests poorly in Level 2 security features, it can’t expect the equipment market to support counterfeit resilience in the cash infrastructure.

Mechanisation is challenging previously accepted paradigms in banknote design for central banks and the industry as a

whole. Traditionally, central banks and their suppliers have focused on overt features and the integration of portraits or icons, for both aesthetic reasons and to encourage acceptance by governors, finance ministers and the public. If central banks follow the trend towards greater mechanisation, they should invest an equal amount of resources into covert feature selection, design and user experience. Perhaps the first question central banks should address is: What machine-readable technology do we need to incorporate into the design that creates a counterfeit-resilient banknote for the future and that all equipment manufacturers and users will be able to authenticate?

Digital developers have for many years used user-centred design principles, in which users are the key drivers of the design process. Some central banks have good early engagement with BEMs, but feedback suggests that this is variable at best and often one way. This must

change if central banks want to avoid costly unplanned and unscheduled early redesigns or reissuance.

We are not aware of any published empirical evidence about the societal benefits of mechanisation and durable substrates, but some central banks are beginning to research this topic. Central banks that have converted to polymer have reported direct benefits to their business. However, the societal savings captured in infrastructure and distribution are often amplified by retail mechanisation and have yet to be reported on.

It has been demonstrated that the business cases for retail bank automation and transformation have paybacks of less than two years. Retailers also report paybacks of less than 18 months for self-checkout and cash-handling installations. These involve large mechanisation investments and are commercially driven.

CITs have been less forthcoming, or are as yet unaware about the benefits of durable banknotes and increased mechanisation, probably due to the fact they are often resellers of equipment.

If central banks want to facilitate an efficient and effective cash cycle, they must factor in mechanisation trends and how to leverage them. The increased use of acceptors, sorters and authenticators in the frontline should be a key consideration during the design process. Central banks need to identify durable

substrates and machine-readable features that meet the future demands of their cash infrastructure.

Implications for the banknote industryIf banknotes are to maintain their position in a global payments hierarchy, the banknote industry needs to continue to innovate and invest in new covert technologies. Historically, the industry has driven substantial innovation in the development of overt features and Level 3 security features. However, the complexity and competing nature of multiple stakeholders in the BEM sector has in many ways stifled investment. Some central banks (and suppliers) have contributed to weak engagement, with many industry groups meeting infrequently or not at all.

BEMs will become critical to the ongoing success of cash, as they increasingly invest in and support other payment technologies. The industry needs to keep engagement and innovation at the forefront of the agenda with BEMs. This is challenging for central banks, which often do not have strong commercial capability or a high tolerance for risk. However, collaborative models and solutions will be required in order to bring new technologies to market.

In the future, the industry will need to focus as much time and resources into developing covert Level 2 security features as it does on

overt features, to avoid creating counterfeit resilience risks.

Looking to the futureThere is a long-term trend towards increased mechanisation in the cash cycle, as all countries have invested in retail infrastructure and automation. Every country and central bank has a unique profile of investment and adoption to work with, which enables planners and designers to more accurately predict what the implications might be for a new series.

Early engagement with BEMs is increasingly important in the design process. The alignment of design and security features with expected detection deployment is an important conversation to have with BEMs and retailers. Acceptors are becoming the first line of defence against counterfeiting.

The industry and BEMs have many aligned issues with covert machine-readable security features and there is a need for more collaboration and innovation. Looking to the future, the opportunity to keep cash as a payment of choice is important for both stakeholders, but this will require more investment in research and development and better alignment of industry standards.

Acknowledgements: RBR for ATM, TCR and SCO data.rbrlondon.com

TREND ANALYSIS SPECIMEN: ISSUE 7TREND ANALYSIS SPECIMEN: ISSUE 7

The rapid growth of ATMs and cash receivers has important implications for banknote design and security features.

Mechanisation is challenging previously accepted paradigms in banknote design for central banks and the industry as a whole.

Central banks Commercial cash 0perations (CIT/bank)

Bank branches and self service

Retailers, shopkeepers and consumers

Figure 6

The cash cycle has evolved from a traditional model, where the circulation of notes was handled mainly by banks and commercial operators, to one that directly involves self-checkout machines, retailers and consumers and often bypasses the central banks. Source: RBR NCR

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SPECIMEN: ISSUE 7

What is Big Data and why it is such a hot topic?Big Data is usually described as extremely large data sets that are stored digitally and can be collected and analysed in real time. Computing power has increased in the last decade and the cost of storing data has reduced dramatically. As a result, data is now commercially viable in a way it was not before. This has unleashed an explosion of applications, including in the world of banknotes.

What has 7 Layer Solutions done in this space?After identifying the huge potential in the area of Big Data for the cash logistics industry, 7 Layer Solutions was awarded a British Government grant to study Big Data analytics in the banknote machine space. As a result of extensive research by a PhD quantitative data graduate, we have developed a dedicated cash analysis product called NoteChain (more information is available at www.7layer.net).

How does Big Data fit into currency management?Every sensor and detector device that reads a banknote serial number creates data that is useful to an issuing department. When you link a serial number to information collected by the fitness and authentication detectors, you get a snapshot of that banknote. If you see that same banknote two or three times a year, you can start to track trends and understand the life of banknotes more accurately.

What are the key advantages of collecting data in the cash cycle?Ultimately it comes down to being able to make decisions based on hard quantitative facts, as opposed to assumptions or past experiences. The two obvious benefits from tracking

banknotes by their serial numbers are policy benefits, and demand and supply benefits.

The policy benefits are that you can set specifications accurately, based on knowing why notes fail and how well different security features last in circulation. You can manage the quality of your substrate and print suppliers, assessing whether all suppliers are equal or if each delivery is equal. If you have an outsourced clean note policy, you can understand how your third-party note processors, such as commercial banks and cash-in-transit companies, are performing. You can rethink your “notes held to order” schemes to manage their behaviours and performance.

The demand and supply benefits start with being able to match stocks to demand. Central banks will always need a stock of banknotes for the unexpected. More accurate matching of demand and supply allows lower stocks to be held. Secondly, the ability to be sure that you have the right number of banknotes in the right place at the right time increases. Because banknote demand fluctuates by climate, geography and society, this is not as easy as it sounds. The supply chain is usually kept

overstocked, just in case. Knowing what stocks you have, and whether they are 25% or 90% through their note lives, increases the chance of having appropriate stocks in place.

This sounds useful, but how hard is it to do?Not as hard as you may think. You do need to answer some key questions at the start. Assuming the answers are positive, then you could be getting data within three to six months, depending on how many banknote sorting machines you are going to collect data from.

What are some of those key questions?Are the serial numbers on your current banknotes capable of being read by machines? Do you have serial number reading on your sorters? If you do, but they are not enabled, then you need to talk to your supplier. If you don’t have serial number reading, you will need to establish the cost of upgrading your sorter with your supplier.

You might assume that, having bought a sorter, you own the data. This may not be the case. Check that your contract with your machine supplier gives you free and full access to your own data.

Ask your banknote printer to supply you with a full data set from the detectors in their single-note inspection machines. The data should be linked to the serial numbers for each making.

But surely that is just the start?Yes, the next stage is actually the most important. And this is where we have found our collaboration with PolyTeQ invaluable. In order to prepare a proper cost-benefit analysis for our NoteChain software, we need the customer — the central bank — to define the questions they want answered. We bring extensive knowledge of writing vault management and cash-handling software for central banks and the cash-handling industry, but PolyTeQ’s central bank consulting expertise helps make this project successful.

Finally, we need to map the data from the sorting machines to prepare a database to download the data into. We also need to understand and assess the server and data security needs. Armed with that information, we can prepare an accurate cost-benefit analysis for each customer.

What happens next? The implementation phase. This takes less than six months because NoteChain is an off-the-shelf software package that is straightforward to implement. As long as the preparation has been done well, implementation is seldom a problem.

How often does the cost-benefit not add up?Central banks that are currently active in this area include the Reserve Bank of Australia, the Bank of Canada, De Nederlandsche Bank and the Bank of Mexico. Each bank has its own particular reasons and circumstances, but they are all clear on the benefits.

Our experience is that the benefits are clear and credible. When we start talking to central banks, the challenge is usually slowing down their thinking about what is possible, as the benefits are so compelling!

Is the implementation process an expensive undertaking?If you do not already have serial number reading enabled on your sorters, this can be a significant one-off cost. The data storage costs and the cost of getting the data into the software are trivial — a few thousand dollars per server. The project costs and ongoing software licencing costs are small, compared to doing this work in-house. The long-term cost savings associated with buying, storing and managing banknotes and gaining control of note cleanliness are very significant.

How has 7 Layer Solutions worked with central banks to make this concept a reality?We have talked to leading central banks about the work they are doing to understand what questions they have about banknote lifespan and how Big Data can be used to answer them. These discussions have led to a trial with a national central bank, using real data to explore the value it offers. We are currently talking to a number of central banks about implementing our software. All these discussions allow us to update NoteChain to fully serve the needs of customers.

Working with PolyTeQ in this area has been incredibly helpful.

About the company

7 Layer Solutions is a specialist software company based in England with close to 20 years’ experience in providing robust and innovative solutions to the cash logistics industry. Its Vault Management Software product is the largest in the world.

7 Layer: Big Data Solution for Banks

“Big Data” is a buzzword that has had a lot of airplay in the last 12 months. CCL Secure’s PolyTeQ Services has been working with 7 Layer Solutions in the application of Big Data to the banknote industry. Phil Ball, Technical Director of 7 Layer Solutions, explains what Big Data is and how it can benefit a central bank.

INDUSTRY INTERVIEW

JOHN WINCHCOMBE INTERVIEWS PHIL BALL

INDUSTRY INTERVIEW SPECIMEN: ISSUE 7

Top: Phil Ball, Technical Director of 7 Layer Solutions.

7 Layer Solutions’ NoteChain software helps central banks use Big Data to track banknotes, and better control both policy decisions and supply and demand.

“The demand and supply benefits start with being able to match stocks to demand. Central banks will always need a stock of banknotes for the unexpected. More accurate matching of demand and supply allows lower stocks to be held.”

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Wigton Counterfeiting Laboratory: Open for Business

ANDREW BAYLIFF INTERVIEWS DR SIMON BUCKLEY

SPECIMEN: ISSUE 7

What facilities do Innovia Films have for the analysis of polymer banknotes? Within the R&D Centre at Innovia Films, we have a wide range of analytical equipment dedicated to the support of our polymer banknote products. Our expertise is in two main areas: materials characterisation and surface characterisation.

In our materials characterisation group, we have a suite of thermal analysis equipment that is capable of fully characterising the polymers used in banknote construction. We have state-of-the-art chromatography and mass spectroscopy equipment that aid in the characterisation of raw materials, coatings and inks.

In our surface characterisation group, we have a wide range of advanced spectroscopy equipment including Time-of-Flight Secondary Ion Mass Spectrometry as well as advanced microscopy techniques like atomic force microscopy and scanning electron microscopy. We also have a variety of print and print-testing capabilities that we use to support our evaluations.

What type of testing do you carry out in your laboratories? The team is regularly involved in helping solve in-service problems, as well as banknote authentication and counterfeit analysis.

Is counterfeiting a major problem for polymer banknotes?Clarity™C film and Guardian™ polymer substrate are amongst the most secure materials available today. The unique manufacturing process combined with the highly transparent nature of the film present many significant challenges to would-be counterfeiters.

How do you approach counterfeit testing?I have worked closely in the past with central banks and enforcement agencies to effectively determine the characteristics, method of construction and mode of manufacture of counterfeit banknote samples.

The look and feel of a banknote often offers early clues about the material’s authenticity. A few tests and passing the note through a Verus™ device gives me a quick indication of the authenticity of a sample. However, it is generally more important to understand how fake materials have been manufactured.

The sophistication of some forged materials requires a unique approach to their testing and characterisation. Fortunately, Innovia Films has a laboratory dedicated to the testing and evaluation of counterfeit polymer banknotes.

The unique method of manufacture of Clarity™C produces a co-extruded film with closely controlled thickness and birefringence characteristics that are almost impossible to forge. In order to copy the Clarity™C base film, counterfeiters have resorted to making elaborate multilayer laminates from a variety of commercially available packaging films.

What sort of tests might you consider in the first analysis?The analytical systems and techniques developed by Innovia Films allow easy determination of both the number of layers in any construction and the mode of manufacture of each layer.

Other security features, such as microperforations, can be relatively easily mimicked with a simple sewing machine, but evaluation of the polymer around the perforation quickly separates the counterfeit from the genuine note.

Some counterfeit banknotes are printed using off-the-shelf home or office printers. In contrast, commercial banknotes are printed using a combination of offset and intaglio printing methods. The differences in ink application can be used to identify the genuine article from the fake. The analytical facility within our Wigton centre of excellence can perform complex reverse engineering of inks using a range of spectroscopic techniques along with pyrolysis gas chromatography to help confirm the authenticity of a banknote.

What does the future hold for banknote analysis within Innovia Films?In 2017, we intend to create a purpose-built forensic banknote facility within the current Innovia R&D building. The suite of interconnecting laboratories will hold high-end imaging and spectroscopy equipment, state-of-the-art surface analysis instruments and high-resolution microscopy instruments. This will allow us to offer access to the centre of excellence in polymer banknote analysis to all new and existing customers of Clarity™C films and Guardian™ substrate.

Dr Simon Buckley, Manager of Analytical Services, gives his thoughts on the testing and analysis of counterfeit polymer banknotes by Innovia Films.

RESEARCH & DEVELOPMENT

Simon Buckley and his team of 17 analysts have over 200 years of combined experience.

Left: A multilayered film construction. Right: Clarity™C.

Left: Poor microperforations in a counterfeit note.Right: Clean-cut lines of a genuine feature.

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CashEssentials Beyond Payments

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