Inside the Secretive Cash Industry: The Money Printer’s Story
Despite the enthusiasm for new payment methods, cash remains an essential element in the vast majority of economies. In fact, demand for cash continues to grow, as Eric Boissonnas, Chief Executive Officer of Koenig & Bauer Banknote Solutions (KBBS), recently pointed out. With KBBS printing machines involved in the production of 90% of the world’s banknotes, a look inside the company reveals how the secretive and demanding banknote industry works and develops.
The history of Koenig & Bauer Banknote Solutions spans over 70 years, and, like many stories, begins with dreams of new ideas and techniques. Initially named Organisation Giori, the company started with a collaborative agreement with the well-established German printing firm Koenig & Bauer. Long before signing the deal, the founder, Gualtiero Giori, was convinced that the banknote printing industry was in dire need of something new: the bland single-color image and design of banknotes then couldn’t match the post-WW2 economic growth. The world called for more secure banknotes printed in much higher volumes, and Giori set to answer it.
His and other company engineers’ inventions made a quiet revolution of new technologies and efficiency in the secretive fiduciary printing industry, and became a technological cornerstone for many modern banknote printing machines. Several successful launches away, Organisation Giori firmly established its position on the market and, after 50 years of partnership, cemented the deal with Koenig & Bauer by becoming its subsidiary.
It wasn’t a regular big fish that De La Rue – Giori (KBBS name in the early 2000s) joined. Koenig & Bauer was a “Mittelstand” company, Mittelstand being the name of the constellation of businesses that form the German economy’s backbone. Apart from technological excellence, traditional German credibility and family-like managerial and capital solidity, one of Mittelstand’s definitions sounds as «highly focused, achieving unprecedented efficiencies by designing a business model with a razor-thin focus and learning to do the one thing really well». KBBS fully integrated this practice to create a stronger foundation for the business – and, consequently, a trust in their products, banknotes.
To ensure such confidence in cash is a highly important task for any banknote issuer. “An important part of our work is to make sure that the banknotes we all use have state-of-the-art security features, since if counterfeit banknotes are mistaken for genuine ones, this would erode people’s trust in their value,” says Bank of England. This confidence plays a key role in the world’s monetary systems and our daily lives: banknotes, still well-received around the world, hold the financial value and allow for secure payments regardless of Internet connection or social status, provide privacy, and become an irreplaceable asset in any disaster.
Apart from the security features, central banks aim for the printing quality. Precise fiduciary printers are indispensable for layering security elements into banknotes, and they do it at a level unreachable for regular machines, says Boissonnas: “This exceptional level of quality is the absolute hallmark of banknote printing and is only achievable when using dedicated banknote printing equipment. Commercial printing technology cannot reach these levels of precision and excellence.”
Here, the highly focused and client-oriented Mittelstand approach worked well. What’s more, it helped KBBS with another aspect of the industry, the one that often goes with little fanfare for the general public. The case is that however good your equipment is, you will unlikely reach the required level without close cooperation with all industry participants and an integrated approach to ensure flawless day-to-day operations. A banknote is born via multiple techniques, and putting them together requires a comprehensive production facility, be it own printing works of a central bank or a private security printing company. Let’s take a brief look at one of them, the Egyptian Banknote Printing House: its two production sites are literally stuffed with offset, intaglio, screen printing, numbering and other machines, and getting them work required a consolidated effort spanned over two continents.
The formal foundation of the printing house for the one of the most populated and fastest-growing countries in Africa was laid in January 2018. Then, the Central Bank of Egypt (CBE) commissioned German security printer Giesecke+Devrient with planning and building an integrated plant for the production and processing of banknotes, with KBA-NotaSys (former name of KBBS) as their preferred tech partner. In the course of construction, KBBS supplied innovative equipment and extended training sessions for the future employees. “We will train about 500 Egyptian technicians and operators […] over a period of two years and work with them to share the expertise of our instructors and make them familiar with our technology,” told Thomas Hendle, Head of Sales at KBBS, before the work started. A few years later, this co-operation has brought abundant fruits: the CBE introduced its long-awaited 20-pound banknote, skillfully printed on long-lasting polymer substrate, sourced from De La Rue and CCL Secure, and secured with a so-called transparent window with an innovative hologram from the French company Surys.
At his point, it may seem that banknote printing isn’t much different from any industrial production: set it up, get it going and gather the freshly printed bills. However, the industry has some specific pitfalls, hardly known to other manufacturers. Apart from usual issues like savings on consumables or decreasing operational down time, a banknote printing machine must strictly comply with the real operational requirements, and also offer an opportunity to maintain exactly the same excellent quality and characteristics throughout a series lasting several years.
To meet this challenge, a fiduciary printer has to tirelessly improve production, invest in innovation and draw on feedback from customers, Boissonnas explains: “We have reorganised our Austrian factory in order to take our assembly lines to the cutting edge of the most advanced industrial processes, with systematic quality control at every stage. This has enabled us to further improve productivity, thanks to the simultaneous development of our training centre, which has unrivalled expertise.” And there’s the need to keep cash secure that keeps spurring the industry as well, the ECB reminds: “To stay ahead of counterfeiters, we continuously work to improve these [security] features and to develop new ones for future banknotes.”
Another concern of a banknote issuer, perhaps, looks more familiar. A bill should not only be counterfeit-proof, but also sustainable. It’s an aspect important for all of us, which is why central banks opt for sustainable cash, its production and overall lifecycle. Keeping up with this requirement requires a stable budget for innovation, and KBBS, in particular, deals with it by devoting 15% of its turnover to R&D and its implementation. This is how it works in practice: “KBBS prints security features with very precise tolerances, which enable the banknotes to be authenticated several hundred times, at lower cost, while reducing the need for secure transport and the associated environmental impact,” tells KBBS’ Chief.
The last pitfall may look somehow surprising when we speak of a cash printing. Suppliers don’t work alone, but as part of modern ecosystems, where everything, including cash, must be connected to the latest technology. Here, equipment suppliers once again turn to cooperation. Developing the SUSI Optics Jazz optical authentication solution, KBBS has teamed up with Fathom Optics, a specialist in the deployment of light field technology for special effects, Landqart for the supply of the specific polymer substrate, and with watchmaker Swatch for the design of the demonstrator note. Richard Pereira, while introducing the innovation at the Mexico City conference in May 2023, highlighted the added value of cooperation: “the substrate maker, the press-maker, the ink maker, the designers, the originators and, of course, the customer, all have their roles to play as they come together and bring their input to create this fantastic feature for the public”.
So, we see now that the life of a security printing industry manufacturer, even life of as seasoned and well-established one as KBBS, is ridden with challenges and responsibilities. However, once everything is settled, the public gets a chance to touch a familiar banknote featuring the latest innovations, like the UV-visible SUSI Flip on the Solomon Islands’ polymer $5: “The SUSI Flip feature has really captured the imagination of the banknote world because it was a genuine innovation in the way one particular printing machine was used to produce a feature that is viewable under UV light,” Note Printing Australia (NPA)’s Malcolm McDowell said while explaining the amusement.
The element was printed by NPA using a Koenig & Bauer Simultan IV and was the world’s first application of this feature on a circulating banknote: “Due to its configuration and complexity, the SUSI Flip is more advanced than any other offset UV feature on the market. It is virtually impossible to reproduce using commercially available technologies and thus very difficult to counterfeit. Finally, the feature is easy to recognise and understand for the public,” KBBS itself explains on its website.
Seeing the good old cash born of this intricacy seems to create a link between the past and the future. The concept of physical money has been present in our culture for many centuries, and those who help to print it weren’t born yesterday either. At that, modern money is impossible without hi-tech and innovation, including the printing equipment. And, as the story and doings of KBBS show, it’s all about finding the right balance between the past and future, and between being close to customers and going ahead of counterfeiters.
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