In his review of the Global Currency Forum, Wolfram Seidemann, Chairman of the ICA, compared the priorities of the cash industry in the past with today.
Then, he said, the key priorities were security, efficiency and quality of notes is circulation.
Fast forward several years, and the priorities look very different now.
Security is less of a priority as counterfeiting is at historically low levels. And in any case, it is taken as a given. In light of recent events, however, efficiency has been somewhat overshadowed, even discredited, by its antithesis, resilience.
In addition to resilience, major concerns today are access, sustainability (in its broadest sense) and what will be the impact of high levels of inflation simultaneously happening around the world.
Access to cash, and acceptance of cash, or the lack thereof, is well documented. Without access, those who need cash face financial and social exclusion. Access is the key component of cash’s sustainability. This is a hot button topic in all industries, which encompasses not just the need for products and practices that reduce our environmental impact, but also such issues as equality, diversity, social justice and, of course, inclusion.
Resilience, meanwhile, has come to the fore not just for cash, but throughout industry. Greater efficiency (aka lower costs enabled by extended supply chains, outsourcing and just in time delivery, which some would argue has been a race to the bottom) has been mantra for many years now – a driver and a consequence of globalisation, but recent events have tested its benefits almost to destruction.
Shortages of just about everything from materials and labour to fuel and shipping capacity have demonstrated the vulnerability of our supply chains and our dependence on ‘others’. The shortages are an inevitable, some would say predictable, consequence of the disruption caused by the pandemic (and the surge in demand when it ‘ended’). To say that ongoing zero-COVID policies in some parts of Asia (notably China) and the war in Ukraine aren’t helping is a monumental understatement.
Another consequence is inflation. Advanced and/or stable economies haven't witnessed anything like the current levels for years. With the spectre of high and hyper-inflation a distant memory, it seems hard to remember that the worry among economists not too long ago was deflation.
Those very conditions that have propelled the importance of resilience above efficiency are the same ones that are driving higher prices. This is not only eating into margins in our industry, but some – particularly those that have entered into long-term contracts that predated the pandemic and subsequent events – are likely to be fulfilling these contracts at a loss. The implications for those suppliers are serious.
Among the many consequences of high inflation, reduced productivity and profits will mean less investment in sustainability initiatives of all kinds, in developing more resilience, in developing a better cash cycle.
In all, it makes one long for a return to the priorities and concerns of the recent past.
