It has become something of a tradition at Currency News in the last issue of the year to review the events of that year, recalling the highs and low and which developments, if any have stood out as a driving force for the months and years to come.
But this year, we have decided to look back at the past ten years. It was exactly this time a decade ago that we were preparing to launch Currency News and, Â with ten years of publishing now under our belt, are taking the opportunity to look at what have been (in our opinion) the â€˜Top Tenâ€™ defining events over this period â€“ both good and bad.
In no particular order of importance, they are as follows:
Substrates â€“ there is no doubt that durable substrates are now coming of age, particularly for lower-value notes and, whereas Securency was pretty much the only game in town ten years ago, all the main papermakers now have their own versions. Â It remains to be seen which, if any, of the options (coated and/or reinforced paper, polymer or composites) becomes prime.
Coin materials â€“ the driver for more durable substrates have been cleaner notes in circulation and reduction in costs over the lifecycle of banknotes. Coins are subject to different market forces as regards costs – notably the huge rise in the price of raw materials over the past decade, which has resulted in the cost of low denomination coins in particular outstripping their face value. The main solution is proving to be electro-plating, with a broad trend now towards replacing more expensive alloys with cheaper plated versions.
Level 1 security features â€“ optically variable features first came to the market in the 1980s, but it has really been in the last ten years that they, and other Level 1 security features, have taken off. Examples include microlens technology (notably Motion), features that combine colour shift with movement (SPARK and RollingStar) and, poised to make their first appearance soon, volume holograms and new forms of diffractive and embossed features.
Also worth a â€˜mention in dispatchesâ€™ are windows, which are not just a security features in their own right, but also a carrier for many of the above features too. Once the preserve of polymer, they are now making their presence in paper as well.
Public education â€“ related to the rise of Level 1 features has been the concomitant rise in campaigns informing the public about these features and how to use them. The ECB set the standard with its Look, Feel, Tilt campaign for the launch of the euro and, since then, the issue of ever more new notes and series has been accompanied by large-scale PR campaigns using all the weaponry of modern communications tools Â â€“ the scale of which was virtually unknown just ten years ago.
Capacity â€“ the investment by suppliers in the run-up to the euro launch left many with spare capacity that, in the years following the euro launch, resulted in intense competition and downward pressure on prices. With global demand for currency continuing to rise at around 5% a year, equilibrium returned, only to be knocked out of kilter in the past couple of years by over-expansion in substrate capacity. This, combined with some of the major markets for paper going â€˜domesticâ€™, is likely to see a shake-out and rationalisation in this side of the industry.
Automation â€“ the â€˜gamechangerâ€™ in cash distribution has been ATMs. There has been no comparable development on the cash-in side of the business â€“ yet. Instead, there have been incremental (albeit substantial) changes around software and hardware resulting in much improved sensor technology, processing and sorting capabilities, monitoring and auditing of cash in the cycle, recycling etc â€“ all designed to cut down on the manual processes involved in handling cash. The next evolutionary step to ensure the benefits of such automation are realised will be standardisation â€“ as yet, in its infancy.
Recirculation – outsourcing banknote distribution is another area that has been more of an evolution than a revolution, but there has been a noticeable trend toward devolving responsibility for the circulation of notes to the commercial sector (aided by the developments above). Models are increasingly being adopted around the world to which the key is standards on the one hand and improved sensor and processing technology on the other to ensure that recirculated notes are both fit and genuine.
Emerging economies â€“ the economic rise of the BRIC countries has been a key development of the past decade. Whether it is enormous capacity-building in China, the move towards self-sufficiency in India and the Philippines, enhanced production in Brazil, Chile, Argentina, Indonesia or Russia, the list goes on. The next few years will see a much more â€˜pluralisticâ€™ currency environment, with such countries becoming major drivers for technical development and production capacity in their own right.
Alternative payments â€“ electronic transaction methods have been chipping away at cash at the upper end of the value scale but, until recently, there has been little to threaten its domination at the lower end. But the development of NFC technology and m-payments now represents a real threat – offering two of the main attributes of cash, namely convenience and accessibility. Â Whether such technology proves a â€˜gamechangerâ€™ or simply another evolution in choice, the industry ignores it at its peril.
Global economy â€“ and finally, the event that overshadowed us all since 2008. Four years in, and the problems in the US and the eurozone show few signs of abating, resulting in a knock-on effect to economies around the world. The economic crisis has had relatively little impact on currency compared with other sectors, but it is the depressing backdrop against we all operate, and looks like being with us all for some years to come.
But despite all of the changes, in our first decade, cash has grown by 5%.
So on that cheerful note, Happy New Year and all the best for 2013.