Euro banknotes in a cash drawer ©tetra / GettyImages

Cash Management – be prepared for the future

Banknotes have been used in Asia since the 11th century and in Europe since the Middle Ages, but one could be forgiven for thinking that this era might be drawing to a close when observing the debate about modern payment methods. But this would be a mistake!

Even if the use of cashless payment methods is on the rise, discussion is intensifying about the associated risks regarding security, data protection and energy consumption. It is therefore understandable that demand for cash continues to be strong and net issuance of cash is even increasing in many countries. Germany is renowned for preferring cash payments. Since 2010, the Bundesbank has issued euro banknotes with a value of €35.8 billion every year, which is equivalent to an annual growth rate of 7.8% on average. But the same applies to many other countries.

It is therefore still important for a central bank to be well equipped for the core business area of cash in order to be fit for the future in terms of strategy and operations. This is also shown by the large number of queries on this range of topics we receive from central banks all over the world.

The costs involved in the choice of payment instrument have increasingly come under the spotlight recently. Central banks must therefore first analyse their national cash cycle and on this basis make decisions about involvement in the cycle and corresponding future services. The next step would involve designing relevant business processes, whereby particular importance would need to be attached to security aspects and efficiency. Automation and digitalisation play a key role here. 

Thomas Langer, an experienced colleague from the Directorate General Cash Management, joined the Centre for International Central Bank Dialogue (CIC) at the beginning of the year to take on responsibility as a senior advisor on cash management and as a specialist lecturer. Over the past two decades, he has worked on numerous cash projects at the Bundesbank. Topics included, for example, the introduction of the euro, IT applications, machine cash processing, use of video technology, modernisation of work processes and the new design of a modern cash centre. He therefore has great expertise in the area of automation and digitalisation.

The CIC has already initiated bilateral cash projects in Central Asia and South and South-East Asia, with content ranging from improvements to cash processing to questions on building a new cash centre. Another geographical focus is the cooperation with cash departments in Eastern Europe. Questions concerning the close proximity to the euro area provide an additional focal point.

The following topics generally attract much interest:

  • Circulation of cash and involvement of central bank
  • Range of services
  • Automation: modern and efficient cash processing
  • Improved banknote quality / clean banknote policy
  • Going digital: big data, serial number reading
  • Cash centre design
  • Counterfeit prevention and tasks of a National Analysis Centre
  • Banknote requirement planning

Interested central banks may send their enquiry to us directly (see internal links: Bilateral projects).

Our range of international central bank seminars also covers cash-related topics in 2020. A new attraction is the tailor-made seminar for young professionals. The focus will be on a modern central bank’s tasks in the cash cycle. A visit to the Munich branch and the “Automation of Cash Processing” service centre located there allows participants to gain their own impression.

You are also very welcome to contact Thomas Langer directly.

Text: Thomas Langer