European Business Magazine catches up with Etienne Couëlle (pictured) , Managing Director of Oberthur Fiduciaire who gives us his thoughts on the industry of banknote printing.
Banknote printing is a highly sensitive sector. How does Oberthur Fiduciaire meet the technical and technological requirements to prevent counterfeiting?
The design and production of banknotes are, by definition, extremely sensitive issues, directly impacting the reputation of governments. The central banks we collaborate with trust us to produce banknotes of the highest quality within agreed deadlines—banknotes used daily by tens of millions of citizens. This trust is the result of our continuously evolving expertise in meeting the legitimate demands of our customers. We must offer the very best in terms of design and security, which is why innovation is at the heart of our activities and strategy.
The fight against counterfeiting is a long-distance race in which innovation plays a crucial role. We must always stay one step ahead of counterfeiters, and the renewal of banknotes provides an opportunity to integrate new security features that will present unsolvable challenges to those attempting to counterfeit them.
Typically, countries renew their banknote series every eight to twelve years. The main reasons include an increase in counterfeiting (or the risk of it) due to the obsolescence of older technologies or major national events such as a new regime or monarch. However, the time between two series can sometimes be much longer, as in the case of the European Central Bank (ECB). Two years ago, the ECB announced its plan to redesign banknotes, though no date has yet been set. In addition to changing the design to reflect a stronger sense of European identity, this presents a technical and technological challenge for all euro banknote manufacturers, including Oberthur Fiduciaire.
Producing banknotes is a highly regulated legal process that begins with responding to a call for tenders from a central bank. Oberthur Fiduciaire has built outstanding expertise over the years, from manufacturing banknote paper to incorporating numerous security features developed by our research and development department. Our supply chain is another of our strengths, as we control the entire manufacturing process, from security features to printed notes, all within Europe—making our banknotes particularly difficult to counterfeit.
What does the innovation budget represent for a company like Oberthur Fiduciaire?
This is confidential information, but it’s clear that innovation has always been a major expense for our company. The R&D budget has remained constant and has even tended to increase in recent years, as improving banknote security is essential. The COVID-19 crisis demonstrated the importance of allocating resources to innovations that may take years to come to fruition. One example is the Bioguard solution that Oberthur Fiduciaire developed in response to the H1N1 crisis in the early 2000s. Back then, we successfully developed a solution capable of protecting banknotes very effectively against viruses, bacteria, and microscopic fungi. This health-security guarantee has been applied to billions of banknotes worldwide and proved highly effective against the COVID-19 virus, as confirmed by independent laboratories. This effectiveness is not a stroke of luck, but rather the result of our teams’ continuous efforts to improve the solution. More than ten billion banknotes worldwide are covered with the Bioguard solution, which has been shown to be completely harmless to humans and the environment.
Innovation at Oberthur Fiduciaire involves a large number of employees, but we also look for the best innovations from elsewhere. For example, in early 2023, we acquired a majority stake in the Swedish company Rolling Optics, which specializes in anti-counterfeiting systems. We now own over 70% of the company. The ingenuity of their solutions and the immense difficulty counterfeiters face in replicating them make these products masterpieces in the field of micro-optics. Seeking to be a leader in this area and continually offering our customers more advanced security features, Oberthur Fiduciaire made an offer to buy the company, which was accepted, and now owns in excess of 70% of the shares. This development may not be spectacular to the wider public, but expanding our capabilities with this new expertise allows us to face the future with confidence.
What are the different systems used to secure a banknote?
The banknote was invented in China approximately ten centuries ago. Although its appearance may seem largely unchanged, today’s banknotes are high-tech products, nearly impossible to reproduce in full. There are three levels of security.
The first and most important level is for the general public, enabling quick authentication of a banknote. The first indicator is the texture—euro banknotes, for example, should feel firm and make a crackling sound when handled. Relief printing processes are also useful for determining whether a banknote is genuine. Other features, such as color-changing ink and holographic patches, help retailers and users verify the banknote. Euro banknotes, for instance, display visible high-security features, including a recognizable holographic stripe.
These security systems are already very difficult to counterfeit, and it’s not uncommon for counterfeiters to be caught quickly due to their inability to replicate these level 1 features.
Level 2 security features require a simple device equipped with UV light. This control system is particularly effective at catching counterfeit notes that passed the initial naked-eye inspection. At this stage, we rely on retailers to detect fake notes. Finally, laboratory or forensic tests (level 3 security) are possible and reveal features known only to the manufacturer and monetary authorities, such as hidden patterns visible only under specific UV stroboscopic lamps.
There are dozens of features that are extremely difficult to counterfeit and impossible to copy faithfully. Banknotes are technological jewels whose authenticity must be easily verifiable by users. This is a matter of trust, a key word in our industry, where traceability is an essential guarantee of reliability.
Ensuring perfect traceability of banknotes throughout their production is also crucial. Several solutions are implemented on each banknote leaving our European sites (with our main facility in France and another in Bulgaria). At Oberthur Fiduciaire, nothing is left to chance in terms of the supply chain, ensuring that banknotes hold a special place in citizens’ daily lives.
The fiduciary industry is slowly moving toward polymer banknotes. Is this trend driven by the need to make banknotes ever more secure?
In recent years, some players in the banknote industry have advocated for polymer banknotes. In our opinion, this is a mistake, and in some respects, a historical misstep. Polymer entered our industry decades after it was used in sectors like packaging. Now, as these sectors seek to move away from plastic, the banknote industry is doubling down on it. Polymer is essentially plastic derived from crude oil. At a time when climate change and sustainable development are major concerns, producing banknotes from a polluting material contradicts our philosophy and efforts to make our production processes more environmentally friendly and sustainable.
Traditionally, the banknote industry has produced banknotes from natural, renewable materials—mainly cotton waste from the textile industry. These fibers are perfectly suited for manufacturing banknotes and meet legitimate environmental standards. Our base material is fully recyclable and environmentally responsible.
Moreover, paper-cotton remains the most effective solution for preventing counterfeiting. Claims that polymer banknotes are more secure and harder to counterfeit are not supported by evidence. The reason is simple: unlike paper-cotton banknotes, which incorporate security features during the paper production process, plastic banknotes have no inherent level 1 or 2 security features. With polymer notes, all security features are added after the substrate is made. It is not difficult to source raw polymer substrate and print “security” layers with readily available materials. Rumor has it that pre-printed substrates for major currencies can be found on the dark web.
Despite claims that polymer represents modernity, paper banknotes remain the most secure, environmentally friendly, and sustainable solution.
What are the latest technological innovations offered by Oberthur Fiduciaire to its clients that we can discuss?
Some very promising developments are underway, and I can’t wait to introduce them to our clients. We already offer a range of high-performance solutions, including the new Anima™ security thread. This world-class, lenticular-based micro-optic thread offers instant recognition through various dynamic features with custom-made designs. It is both a highly secure thread and an easy way for users to authenticate banknotes. This complex anti-counterfeiting technology was developed in collaboration with Rolling Optics.
Other first-rate solutions are also in the pipeline, complementing innovations like the 3D Relief film, which is already attracting interest from our (potential) clients. Our Pulsar motion security thread is another significant achievement, featuring innovative micro-optics that create unique, forgery-proof visual effects. Lastly, our HD Vision watermark solution offers unparalleled definition and detail, guaranteeing cutting-edge security. These are just a few examples of Oberthur Fiduciaire’s forefront solutions for banknote security.
Is there a system of patents to ensure the uniqueness of these techniques that result from long research work?
Yes, our long research process often leads to patent filings, which are essential to protect our work from competitors. In the banknote industry, copying innovations from those who invest heavily would lead to industrial exploitation. Competition between banknote manufacturers keeps us ahead of counterfeiters. Oberthur Fiduciaire is a very active player, holding around 1,000 patents. However, a patent is not a free pass to become complacent. It allows us to capitalize on our efforts for a time while continuing to develop ever more effective solutions.
This approach also applies to our competitors, who sometimes become partners. Occasionally, we collaborate with one or more competitors, sharing certain solutions. A recent example is Bioguard, which has drawn interest from central banks we do not currently work with. Given Bioguard’s proven effectiveness in uncertain sanitary conditions, Oberthur Fiduciaire decided to make this technology available to all central banks and banknote producers who would like to benefit from it. Applied in the form of a varnish or integrated directly into the banknote manufacturing process, Bioguard is now available to all. Oberthur Fiduciaire knows how to adapt to events, and that’s why we’ve managed to climb into the world’s top 3 producers in recent, challenging, years.
