The Bank of England, which in September announced that the UK plans to follow Australia and Canada’s lead in replacing traditional paper banknotes with plastic ones, confirmed that the switch will commence with a new £5 note. It will feature an image of Winston Churchill and enter circulation in 2016, to be followed shortly after by a redesigned £10 note featuring Jane Austen.
The BoE’s governor, Mark Carney, said the new notes would “combine the best of progress and tradition” and that the switch was a “natural evolution”.
The BoE said back in September that it was launching a three-month public consultation peiord. Representatives have taken sample £5 and £10 notes on a roadshow to UK shopping centres, telling shoppers that they are secure, cheaper and greener than paper-based money.
“The response to that consultation was overwhelmingly supportive of polymer notes,” the BoE said on Wednesday, adding that though brand new notes can “sometimes stick together?.?.?.?this effect is short-lived”.
Ben Thorpe, director of global marketing and strategy at cash handling technology company Glory Global Solutions, said that the 2016 launch presented challenges for banks and users of cash machines in ensuring that these devices are adapted for the new substrate and designs of the notes.
“Ensuring that the new notes are correctly recognised will be critical, and finding the right technology suppliers will be crucial for banks in reconciling that issue, but equally there is presumably going to be a phase of dual circulation where polymer and paper notes of the same denominations will circulate.
“While to every man and woman on the street this doesn’t cause any major problems, the unseen parts of the cash cycle will have to adapt processes to ensure that the old notes are retired and the new notes re-circulated. Having enough capacity and flexibility within the cash cycle and systems that banks, security companies and other major users of cash have will be key to the continuation of smooth cash flow – but will go largely unnoticed by the general public.
“Whether the currency is paper based or polymer based, the on-going challenges for banks are essentially the same: counting, authenticating and quality sorting to make sure that the notes we use day in and day out are fit for purpose. These operations happen largely out of sight of the public but ensure that cash is available around the clock in automated teller machines [ATMs] and via bank branches.”
While the BoE has admitted that the cost of producing plastic notes is higher than for paper ones, it reports that they typically last two and a half times longer and are also more difficult to counterfeit.
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.
Kicking off day two of the Singapore Fintech Festival, Deloitte Chairman David Cruikshank said that fintech is significant for three reasons. First, customer expectations of services are higher than ever. Second, barriers to entry are lower than before. And finally, financial institutions (FIs) face a threat of what a competitor might do.