Strengthening Cash Security : The Imperative for IBNS Adoption by Central Banks

In an age dominated by digital transactions, the imperative to fortify the security of physical currency remains of most importance. This article delves into why central banks, the custodians of a nation's monetary stability, should play a pivotal role in endorsing and adopting the Intelligent Banknote Neutralization System (IBNS) to enhance cash security across Cash in Transit (CIT) companies, commercial banks managing ATMs, and the retail sector.

What is IBNS ?  

Intelligent Banknote Neutralization System Definition

An Intelligent Banknote Neutralization System (IBNS) is a high-tech security mechanism specifically crafted to guard against theft or unauthorized entry to cash held within automated teller machines (ATMs) or other secure enclosures. Its main objective is to render the banknotes within a designated area non-functional should a theft be attempted.

The benefits of IBNS 

The adoption of an Intelligent Banknote Neutralisation System (IBNS) by a country is a proven and effective crime prevention method to protect its financial institutions and assets. There are several compelling reasons for implementing IBNS:

• Deterrence of Theft:
  IBNS serves as a strong deterrent against theft and unauthorized access to cash in automated teller machines (ATMs) and secure containers. The knowledge that banknotes can be rendered unusable in the event of a theft discourages criminals from attempting such acts.

• Enhanced Security:
  The introduction of IBNS significantly enhances the overall security of cash handling and storage systems. By deploying advanced sensors and neutralization mechanisms, financial institutions can better protect their assets, reducing the risk of successful theft.

• Traceability of stolen banknotes:
  The staining of banknotes by the IBNS makes the stolen currency easily identifiable and traceable. This not only discourages criminals but also assists authorities in tracking and recovering stolen funds.

• Global Best Practices:
  Many countries and financial institutions worldwide have successfully implemented IBNS as part of their security protocols. Introducing IBNS aligns with global best practices in financial security and risk management.

• Save costs :
  The implementation of IBNS is expected to result in cost savings on insurance for cash handlers. By integrating advanced security and crime prevention technology into their operations, they are likely to achieve a higher level of security. This, in turn, should lead to a reclassification of their risk profile, resulting in lower insurance premiums. Additionally, certain countries have transitioned from heavily armored vehicles to soft-skin vehicles equipped with IBNS, leading to reduced fleet investment costs, including lower fuel consumption and decreased taxation groups.

• Singapore usecase :
  Auxiliary Police Forces (private companies supervised and licensed by Singapore Police Forces) is currently escorting CITs on cash deliveries. Singapore Police Forces has the plan to implement IBNS in the country which means that they will no longer require APF as ink technology will protect the cash in the ATM Cassettes/Bags.

• Japan usecase :
  Japanese CiT organisations continue to struggle to recruit sufficient manpower. A significant benefit of IBNS is that fewer custodians will be required to deliver this service with the introduction of soft skinned vehicles.

To facilitate the widespread adoption of IBNS, central banks play a crucial role in endorsing and regulating its implementation. The approval process involves establishing clear guidelines and standards to ensure seamless integration into the existing cash infrastructure. Collaboration with regulatory bodies becomes imperative to align IBNS adoption with national monetary policies and legal frameworks.

Where is IBNS implemented in the Cash Security Sector?

IBNS implementation Across Various Cash Handling Entities

The global acceptance of IBNS underscores its efficacy in fortifying cash security. Currently operational in numerous countries, IBNS has been embraced by CIT companies, commercial banks, and retailers, tailoring implementations to address the specific challenges unique to each sector.

Benefits of IBNS implementation

Consider a scenario where a central bank in Country X approves the integration of IBNS across its financial ecosystem. IBNS contributes to improved risk management for the central bank and financial institutions. The system's ability to quickly detect and neutralize threats allows for a more proactive response to security incidents, minimizing potential losses and mitigating risks associated with cash handling. Furthermore, the approval and implementation of IBNS contribute to building and maintaining public confidence in the country's financial system. The visible commitment to adopting advanced security measures reassures the public that their funds are well-protected, fostering trust in the banking system.

The adoption of Intelligent Banknote Neutralization Systems by central banks represents a pivotal stride in fortifying the security and operational efficiency of physical currency. As technological advancements persist, embracing innovative solutions like IBNS becomes indispensable to safeguard cash and maintain the resilience of cash-related operations. With central banks at the forefront, providing the necessary approval and regulatory framework, IBNS emerges as a vital asset in securing the future of cash-intensive sectors.

 

 

Patrice Rullier, Managing Director, Oberthur Cash Protection