More Business Power for the Cash Cycle

The most important trends and developments associated with the cash cycle were discussed at the “Currency Technology 2017” symposium in Munich. G+D Currency Technology invited around 200 guests from all over the world, to talk about innovations in security technologies, engineering, and services, while also developing their personal networks.

As in 2013 and 2015, Giesecke+Devrient Currency Technology GmbH again hosted the “Currency Technology Symposium” international industry meeting in summer 2017. Almost 200 guests from central and commercial banks, as well as cash-in-transport companies and printers, accepted the personal invitation and traveled to the headquarters in Munich. In addition to enabling mutual networking among professionals, the key focus of the five-day event was to create a forum for the discussion of trends and changes in the industry. The key topics were automation, digitalization, and the future of cash.
Opening the event, Dr. Wolfram Seidemann, CEO of G+D Currency Technology, specified two main reasons for the continuing worldwide popularity of cash: inclusion and innovation. He made reference to the fact that the quantity of cash in circulation continues to increase by 3-5% every year, and believes that this is down to cash not only being secure, convenient and crisis-proof, but also being the only means of payment that everyone can use – regardless of their social status, level of education, or access to banking systems. “People all over the world trust in banknotes and coins,” said Seidemann. “Cash is the most democratic means of payment in the world.”

Cash is an integral component of modern life.

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Dr. Wolfram Seidemann, CEO, G+D Currency Technology

This trust in cash, which is supported and validated by central banks worldwide, is primarily founded on constant innovation and technological refinement in the field. This power of innovation is a characteristic feature of the industry, alongside the will to always achieve the best for the population and the product. In collaboration with central banks, banknotes have evolved to become highly technological products which combine aesthetics and technology in a unique way. Seidemann went on to talk about the necessity of further developing collaboration with respect to digitalization, in order to leverage every opportunity to increase efficiency and effectiveness.


From the “future of cash” to “business power”

It’s no longer possible for companies to survive without standardization, automation, and digitalization.

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Nayif Demirkaya, Group Vice President at G+D Currency Technology

On the subject of the trend towards standardization, automation, and digitalization, G+D keynote speaker and Group Vice President Nayif Demirkaya drew parallels with the automotive industry. “When the first Benz motor car was driven in 1886, we had already been producing banknotes for more than 30 years.” He continued by saying that automotive construction has contributed to a phenomenal development in mobility over the past 120 years, which Demirkaya believes is a clear consequence of company groups’ significant “business power”. The former Daimler manager invited visitors to the symposium to release similar forces in the cash cycle: “It’s no longer possible for companies to survive without standardization, automation, and digitalization.”

The events series at the symposium

Following the keynotes in the morning, there were several events series at the “Currency Technology 2017” symposium, looking at the most important subjects in the industry. Individual presentations were followed by discussions in which visitors were able to share their experience and objectives with other professionals from all regions of the world. There were 16 workshops in total, organized into different sessions. These included:

  • New banknotes – ideas, concepts, and launch
    Project management; security concepts; counterfeit analyses; and aesthetic criteria, as well as introducing banknotes into the cash cycle.

  • Looking forward – an array of opportunities in the future
    Banknote processing in the BPS ecosystem; well-founded decisions based on Big Data analytics; and the outsourcing of tasks.

  • Automation – increased security and productivity
    Optimization potential in cash centers/the cash cycle; new approaches in cash logistics; and reduction of operational risks.

  • Printers – optimizing process efficiency
    Reducing waste in banknote printing; tailored consulting services; and efficient quality control.


Standardized cash logistics

In his events series, Dr. Thorsten Pillo, Sales Director for Latin America and the Caribbean at G+D Currency Technology, together with Czech Director Ralf Rüben and visitors, discussed making both the cash cycle and cash centers more efficient. He picked up on the rule of three from the keynote – standardization, automation, and digitalization – and added the aspect of synchronization. The question of the ideal number and sites of cash centers in a country was a key topic. The focus was on correlating the costs of transporting and processing the cash in order to calculate the ideal number of sites from the line curves.

“Another main driver of cost efficiency is transport optimization through the standardization of logistics components,” reported Pillo, based on his experience. At this point, he made reference to Malcolm McLean, who revolutionized the international exchange of goods and laid the ground for globalization 50 years ago, with the development of the shipping container. Pillo continued: “Transferring the idea to the cash cycle, the container is our NotaTracc Tray banknote container, which optimizes pallet logistics for the macroscopic cash cycle, and is also adapted to various systems within and outside the cash center.”

Synchronize and optimize the cash cycle

Pillo used a bicycle chain connecting variously sized hubs to demonstrate how all institutions in the cash cycle synchronize. “The chain in the cash cycle is software that needs to be integrated end-to-end, from the point of sale to the cash center.” He added that matching the data beyond different interfaces enables the amount of cash in circulation to be controlled, monitored, and predicted, in order to ultimately calculate the ideal level for each individual end point in different institutions. He went on to say that a “virtual pool” of banknotes is formed in the system, which can then serve as a buffer for demand.
On this basis G+D Currency Technology offers businesses the opportunity to integrate their systems into the “Compass VMS” software via web portals, for example. Pillo, a manager at G+D, reported on an example from the Caribbean, where a cash-in-transit company had found that it is worthwhile for all involved parties to set up a small office with a machine in retail parks, in order to pre-count and directly book the banknotes. “The processing system data are recorded into the customer’s Compass VMS program live, and immediately synchronized.”


The Experience Cash Center

Security and efficiency are not mutually exclusive

In his events series, Barnabás Ferenczi, Director of Sales and Services in Europe, demonstrated to visitors that security and efficiency no longer need to be mutually exclusive – in fact, quite the opposite. The end is in sight for manual activity in cash centers, where there have previously often been “trade-offs”: “In a manual world, if headcount is reduced with an eye to productivity, fewer employees are also available for control functions, and this impairs security,” reported Ferenczi adding that
these days, however, with modernized, and to a great extent, automated operations, it is possible to improve both aspects at the same time. “A comprehensive software solution in place of paper-based track and trace saves time and resources while also increasing security, because all work steps take place automatically and are controlled.” He added that coupling the software with a video monitoring system could make video monitoring much smarter. “In 2017, it’s no longer necessary to trade off security for efficiency.”

Central banks rely on modernization.

According to Ferenczi, the industry is experiencing a huge wave of modernization, automation, and digitalization. “Investment is being made in all regions of the world – not only for efficiency gains, but also security and a high demand for modernity.” He went on to say that checks by employees are becoming less possible over time, and that using video monitoring systems is impossible in some regions because of legal frameworks. “In these situations, automation is often the only way to achieve security and efficiency.”
What’s more, he pointed out, many of Europe’s central banks are relocating from inner cities, to industrial cash centers located at the edges of cities, with high-rack storage. There are examples of this happening in Hungary, Sweden, Finland, the Netherlands, and Germany. “Relocation is always associated with modernization and automation projects.” He went on to say that automation reduces operational risks – both unintentional errors, such as in paper-based environments, and deliberate attempts at cash and information fraud. “Both of these have potential to cause scandal, making them dangerous for management,” said Ferenczi. Although breakdowns are always possible, central banks in particular have very high demands for flawless work. “Automation and the end-to-end use of software significantly reduce errrors.”


The leading edge in cash centers

The cash center outsourcing option

Reinhard Hofer, Global Program Manager for Managed Services at G+D Currency Technology, went one step further in his events series. “Even the Romans outsourced tax collection,” he argued, saying that this was done to keep state machinery lean, and to trade risk off against security. It was a few years ago that the first central banks also started transferring cash processing to third parties. This meant that they had to invest less cash, employ few people, and support fewer machines. “None of this is the core business of central and commercial banks,” said Hofer.

It’s no surprise that an increasing number of big players in the cash cycle are outsourcing individual tasks or entire business processes. Advantages include reduced costs, increased flexibility, and ease of scalability in the event of changes in demand. “The objective is to convert cash processing from a cost center to a profit center,” commented Hofer, an expert from G+D Currency Technology. This can only be achieved with custom-tailored solutions and products that focus on productivity, cost optimization, and maximum security.

Cash processing is not part of banks’ core business.

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Reinhard Hofer
Global Program Manager for Managed Services at G+D Currency Technology

Cash management: outsourcing instead of expansion

The Central Bank of Brazil has outsourced the operation of its ten country-wide cash centers to Giesecke+Devrient Currency Technology GmbH. The benefits pay off:

  • Financial flexibility: financial institutions do not commit their cash flow in the long-term, and instead rely on projectable expenditure based on need, with no surprises.

  • Efficient operational sequences: assurance that Service Level Agreements (SLAs) are complied with from the outset Monitoring and optimizing operational sequences are part of G+D Currency Technology’s core competencies.

  • Reduced risk: enhanced security achieved through time-tested approaches and technologies, as well as technical experts who guarantee optimal system operation.

  • Custom-tailored solutions: options for each part of the value chain – from the paper mill, through banknote production and inspection, to complete cash center operation.


The basis for “Currency Technology 2019”

Traditionally the symposium program is rounded off with a visit, by participants from central banks and printers, to the Louisenthal paper mill at Tegernsee. Here, visitors could experience for themselves how high-tech security foils and substrates for banknotes are produced. In the “We Make Semiconductor Technology Visible” workshop, customers had the opportunity, for the first time, to see how semiconductor technology is used to create micro- and nano-structures in the clean room. “We are delighted that our customers are so interested in our innovations and expertise,” said Clemens Berger, Chairman of the Louisenthal Management Board.

For example, the sophisticated micromirror technology that is used in the Galaxy security thread proved very popular among the international visitors. Around 10,000 shots per second are placed precisely on the nanometer, with the aid of an electron beam. This creates the holograms that secure billions of banknotes worldwide. “There’s good reason for Louisenthal being the world’s market leader for substrates and security features,” said Berger.

To close the symposium, the participants laid the groundwork for “Currency Technology 2019”, and gained the required “business power” as requested by G+D manager Nayif Demirkaya in his keynote – in a typical Bavarian beer garden over Tegernsee, enjoying magnificent sunshine.


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