Due to the national interests involved and the economic value of partnerships between central banks and fiduciary printers, central banks are increasingly exigent in their requirements. Oberthur Fiduciaire’s CEO Thomas Savare affirms that central banks are turning more and more towards international certificates in an effort to prevent repeats of past scandals.
Central banks are exposed to risks on many fronts. They must mitigate for concerns relating to security, quality of product – both in terms of their reputation as producers and in the prevention of crime – and at the same time, they have national scrutiny exerting pressure on their decisions and practices. Central banks must protect themselves as they always have against theft and robbery. One famous example of the kinds of security issues that have existed in the industry came in 1994 when The New York Times revealed a U.S. Treasury Department printing press engineer had been charged with stealing $1.7 million in $100 banknotes.
But moreover, the financial sector has become notorious for ethical problems. At their most extreme these can manifest in corruption and bribery, though this is in fact a global, multi-sector problem. Examples of central banks and security printers getting caught out on this front are all too common. In recent years, there have been separate corruption cases involving money printers in Austria and Australia.
Issues with the quality of a manufacturers’ products can also bring problems if they result in banknotes being too easy to forge. The capabilities needed to print with holograms or make use of specialised security inks can be expensive. Merely in terms of reputation it can be damaging for central banks if their products are discovered to have defects. The Reserve Bank of Australia found this out in May when it was disclosed that it had failed to correct a typo in the micro-text of its latest fifty-dollar banknotes.
The closure of Crane Currency’s facility in Tumba (Sweden) further demonstrates how central banks are increasingly worried about the safety of the entire supply chain. Swedish members of parliament expressed concern over national security after Crane’s change of production site to Malta, and the Riksbank was equally clear that printing location was not up for discussion.
Why Central Banks need guarantees
Without guarantees, central banks are exposed on each of these fronts. Due to the nature of banknote printing, contracts usually take place over several years. Before committing to work with one printer, central banks want to know for certain what they can expect from the contractor.
As central banks represent nations, the stakes are big: they are not in a position to get things wrong. Alongside high-quality banknotes, the public has expectations about environmental sustainability, sovereignty, and ethical standards, as well as a host of other modern demands.
“Recent and unfortunate examples have reminded everyone that it is not enough to simply demand quality from the manufacturer of the finished product. It is also necessary for the manufacturer to be able to provide guarantees of security and quality throughout the entire supply chain,” explained Thomas Savare, CEO of Oberthur Fiduciaire.
Declarations are no longer enough: external guarantees are needed
“We are not just making promises. We believe it is essential to adopt international standards established by trusted third parties,” Savare explained. “The ISO standards we have put in place, whether in terms of quality, respect of the environment, safety or the fight against corruption, with ISO 37001 for example, are, in my opinion, much more relevant arguments than any statements that we could make,” he said.
Oberthur Fiduciaire is one of many companies that now make use of management systems formulated by the International Organisation for Standardisation (ISO) which provides standards covering all aspects of business, from environmental responsibility to quality product, management and ethics.
Certificates from dependable international authorities are one way that central banks can be sure that printers have effective management approaches in place. With leaders like the BBC and Microsoft getting involved with ISO, there has been movement on this front. ISO 9001 quality management system, for example, has been adopted by over one million organisations around the world.
For instance, the Central Bank of Malaysia experienced an unprecedented scandal when the development fund was embezzled of nearly $700 million. But the current Governor Nor Shamsiah Mohd Yunus, ensures that this will not happen again. In a recent interview she reviewed a number of measures taken to make such an occurrence virtually impossible. This includes the implementation of the international anti-corruption standard ISO 37001.
For the CEO of Oberthur Fiduciaire, the heart of the relationship must always be trust: “[…] what remains at the heart of the relationship, as it does with private companies, is trust. It must be the fundamental quality of every relationship and every transaction. As far as public institutions are concerned, this trust is just as much required and the means of obtaining it remain the same: quality of work and the many guarantees we provide with our offers.”
ISO standards are respected because they provide universal frameworks for dealing with the most relevant issues in business. General consensus suggests that the more companies and organisations adhere to the same systems, the more that the rules coming from certificated standards bodies can become industry norms. There are those who will fear submitting to such standards, and those who welcome them as an additional way to distinguish themselves from their competitors. “We are rather satisfied with the tightening of the requirements of the Central Banks because it raises the general level of the sector and at the same time allows us to distinguish ourselves even more. Indeed, potential customers quickly realize that whatever their requirements, we already have the same ones!” concludes Thomas Savare.