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#Currency Management

Cash cycle sustainability

Global Trends
6 Mins.

The alarm has been sounded – the linear economic model is not sustainable and must undergo a drastic circular transformation. If the currency industry is to take an active part in this evolution, it must address factors that can effect systemic change and move the cash cycle towards a new, sustainably minded era.

Considerations such as finite natural resources and ongoing environmental degradation have further invigorated the circularity debate – and the cash industry is taking note. While the existing linear – or take-make-dispose – model has fostered significant economic growth since the Industrial Revolution, it is increasingly being recognized as unsustainable. Arguably its most problematic outcome is the exploitation of natural resources and the creation of limited-lifespan products – for example, banknotes packaged in single-use plastics (albeit securely and cost-effectively) for a single transportation run. Additionally, while not specifically hindering relations between various parties within a value chain, the linear model does little to advance meaningful collaboration.

Conversely, the leading argument for a circular economy – a restorative system that focuses on use rather than consumption and views waste as value leakage – is that it represents a chance to transform production and form new synergies, while simultaneously empowering industry players and consumers to be more sustainable. At this pivotal time, a valuable dialogue must take place between cash cycle stakeholders; one about existing challenges, opportunities, and how to best manage both.

Every crisis has a silver lining

NotaTracc trays from Giesecke and Devrient
Reusable NotaTracc® trays form the core of the NotaTracc® system

In March 2020, spurred on by the advancing climate change crisis, the European Commission released its newest Circular Economy Action Plan.1 Beyond setting out new mandatory requirements, including those relating to the reduction of packaging material and plastics, the document underscored an intensifying concern over sustainability as well as an increasing desire by regulators to enable a circular transition.

This move, as well as earlier developments, did not surprise the currency industry. In fact, according to Christian Huber, Head of Business and Product Management – Business Line High-Speed Processing Systems, G+D, sustainability and the circular economy have featured as key industry concerns for some time. Nevertheless, Huber notes that a transformation is underway. While, traditionally, sustainability efforts in cash centers predominantly focused on energy consumption and the longevity of banknote processing solutions, these have now been extended to include a closer examination of consumables, and their integration with automated processes. Importantly, Huber adds, the demand for circular solutions has increased, and they are now viewed as valuable assets.

“The global focus, in social and political realms, makes sustainability and climate protection much more visible,” he explains. “We are experiencing a push for sustainability from multiple sides, including regulatory authorities, our own internal corporate ethics and social values, as well as customer demand. These triggers enable our industry to move in a different direction.”

Enabling a circular economy

Transitioning to a new economic system is a grand undertaking for any industry, and particularly for one as complex as currency. Or, in the words of Huber, “It’s a challenging assignment. Barriers exist, questions arise, and they aren’t always easy to overcome.”

Huber emphasizes that companies and institutions must also start setting higher standards for themselves. “We must break down our goals into smaller, more tangible increments. My team reaches new standards by developing modular and platform-based solutions that keep our systems up to date for longer, meaning they grow in functionality but not in age. In  the future, intelligent service models will reduce travel, and digitalized, automated solutions will help to develop smarter, more sustainable practices for the whole industry. By developing innovative ideas and discussing them with customers, partners, and experts, we know that together we will create sustainable change.”

One thing is certain: if it is to be successful, the currency industry must be prepared to assume the right mindset and address three important enablers: efficiency, innovation, and collaboration. Encouragingly, according to Huber, players within the cash cycle do not want solutions that drive efficiency or cost-effectiveness at the expense of sustainability. However, conversely, they also do not want business-relevant factors to be ignored. “When industry invests in sustainability, it wants to ensure that this does not conflict with efficiency, but supports it and, at best, promotes both,” he says.

The challenge is that they often can be mutually exclusive. In fact, Huber notes that it takes considerable innovation to turn efficiency into an enabler of sustainability. “The big step is to let go of the status quo,” he says. “The cash industry will need to take an agile approach, accept more risk and even some failures, but in return learn from it and innovate faster.” Rather than focusing on optimization, the best approaches always question whether existing cash management solutions make sense in the first place – and then use new technology to get creative.

“These are precisely the types of concepts that we are actively pursuing,” Huber says, offering NotaTracc® as an example. Rather than finding a way to make single-use banknote packaging more sustainable, the solution replaced it with reusable standardized trays, which not only helped to close a loop, but, when integrated with the automated NotaTracc® loading module, also increased efficiency.

However, to achieve circularity, solutions must seamlessly move through the entire cash cycle. For Huber, this means that collaboration could act as an asset. “The industry must shift its mindset to look at cash payments holistically and work much more closely together. You have to get around the same table,” Huber says.

“Players in the cash cycle must talk, try new models, and address upcoming challenges together.“
Christian Huber
Head of Business and Product Management – Business Line High-Speed Processing Systems, G+D

If executed correctly, the right approach has the potential to lay the groundwork not only for a more rapid integration of sustainable design into the cash cycle, but also for future innovation that works with efficient automated solutions. “There is a lot of potential. And there will be ideas that go beyond the way we think today,” Huber says, “My team and I are thrilled to be a part of it and can’t wait to see what this will look like.”

  1. Circular Economy Action Plan

Published: 21/07/2020

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