Following last year’s announcement by the Bank of England that it is to begin issuing polymer banknotes from 2016, it is important to consider how the UK’s transition can be managed effectively in order to minimise disruption to the cash cycle, argues Paul Adams
While central banks, commercial banks, retailers, CITs, and equipment providers all have their part to play in making Britain’s polymer journey a smooth one, the key to realising success is to act now and harness the value of collective industry strengths.
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The race is on, or indeed it should be, to get Britain polymer-ready, and the success or failure of Britain’s implementation will likely be judged on whether or not come 2016, on the day that the new £5 note is released, consumers are able to withdraw the new £5 note from ATMs.
While this may appear to be a relatively simple objective to achieve, of course the UK is not the first country to transition to polymer, a great deal of work behind the scenes is required within the next two years in order to make this goal a reality.
ATMs are however only one piece of the cash cycle puzzle, ensuring that the whole cash cycle is ready on day one represents a substantial challenge. Components of the cash cycle that is not as visible to the public eye need the same level of attention and focus to enable success.
Areas such as in branch recycling units, the transport mechanisms cash logistics companies use to transport cash, the machines that will sort out old notes from the new, all need to be enabled in time and tested.
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By GlobalDataA key determinant of the success of this transition will be the levels of engagement between the Bank of England and equipment providers. It is important that test notes are made available to vendors early in order to ensure that systems can be evaluated and upgrades configured in good time.
Systems need to be upgraded so that they can accept a paper/polymer mix, identify genuine polymer notes and manage the way polymer notes behave differently from their paper predecessors.
Once these upgrades are ready for the field, equipment providers need to be proactive in working with commercial banks, retailers and CITs, to deliver the necessary upgrades across their networks.
Moreover, vendors need to consult on the potentialities which polymer adoption may present in the short to medium term.
For example, in the weeks after the release of polymer, commercial banks may experience increased branch cash volumes as a result of the ‘buzz’ factor leading to a ‘flushing out’ of old notes.
To prepare for this eventuality, banks might want to consider the burden this may place on their staff and the extent to which they are ready in operational terms.
In addition, introducing any new note presents an opportunity for counterfeiters seeking to cause confusion and profit in this case from the very new look and feel these notes will have.
It will be important that the Bank of England spends time and money educating everyone in the UK – after all cash is the most ubiquitous of products.
From within the industry the Bank of England’s investment in the latest security technology will help neutralize this threat to a large degree.
However, to minimise the risk completely, it is important that banks train their staff early, and ensure that cash handling systems such as teller cash recyclers are able to detect counterfeits.
If providers are in a position to work on these issues, it will enable retailers and commercial banks to concentrate on their strengths. They will continue to be able to grow their businesses and adapt to consumer demand as the UK continues its economic recovery, safe in the knowledge that the disruption posed by cash to UK payments systems has been minimised.
Paul Adams is CEO, Glory Global Solutions
