News in Brief

Belgian Competition Authority to Investigate Batopin

The four largest Belgium commercial banks, Belfius, BNP Paribas Fortis, ING and KBC, set up the Belgian ATM Optimisation Initiative (Batopin) in March 2020. Batopin addresses the infrastructure challenge of falling cash usage volumes by developing an optimal network of ATMs in Belgium. The ATMs are branded neutrally and are established away from bank branches. The aim is to have an ATM not more than 5 km from people.

Just before Christmas the Investigation and Prosecution Service of the Belgian Competition Authority (BCA) opened an investigation to determine whether the Batopin agreement could affect the quality of banknote distribution and deposit services or the competition between retail banking service providers under Article IV.1 of the Economic Law Code and/or Article 101 of the Treaty on the Functioning of the European Union.

The timescale of the investigation is unclear.

Demand for New Notes Strong for Lunar New Year

The tradition of giving banknotes as a gift at the Lunar New Year, lai see, increased in Hong Kong this year as COVID curbs were lifted. Bank branches offer packs comprising of 100 new HK$100 and 20 new HK$50 notes, although these are limited to one pack per customer. Used notes have no limit.

Demand has been brisk, with stocks of packs available through online booking sold out. HSBC reported double-digit growth in pre-ordering, even though it had prepared more banknotes than in previous years. People had until 21 January to collect their notes. For older people, some branches had designated queues for them, and HSBC had a ‘lite’ version of its mobile banking app so that the elderly could avoid queuing by reserving notes early.

Singapore reports similar behaviour with people still preferring new notes despite the attempt of local banks to persuade people to gift used notes designated as ‘fit for gifting.’ Despite these notes not requiring pre-booking and being available in ATMs, the tradition of giving new notes to mark a new year remains strong.

DSB Bank, UOB and POSB have installed more pop-up ATMs than usual, in addition to their existing network, to meet demand. Those over 60 and people with disabilities can also use branches of DBS, OCBC and UOB to get their notes, although there are daily quotas. Other people must pre-book using an online reservations system.

The drive to move people to use ‘fit for gifting’ notes is part of the Monetary Authority of Singapore’s work to reduce the environmental impact of banknotes. Apart from fit-for-gifting notes, people are also urged to use digital red packets, or e-hongbao.

Good Planning Leads to a Smooth Transition

Croatia joined the Eurozone on 1 January 2023. The European Commission (EC) is monitoring the change. A survey a week into the new year found 51% of cash payments in shops were made in euros on 5 January and 93% of change handed out was in euros.

The smooth changeover has been helped by the issue of euro banknotes and coins starting in December 2022. By the end of the month 55% of kuna notes and a third of coins had been exchanged for euros. 70% of ATMs were distributing euros ready for 1 January.

One concern was that businesses might take advantage of the change over to push up prices. From 5 September all businesses had had to show prices in both euro and kuna. This requirement will remain in place throughout 2023.

Cash Payment Returns to Berlin’s Buses

After nearly three years where it has not been possible to pay cash to travel on Berlin’s public transport, Berlin’s buses will allow it once again from mid-January. Berlin’s red-green-red coalition and the passenger association IGEB has applied pressure to achieve this result.

There are, though, political and transport voices that oppose this change.

Preparing for Future Crises in Germany

The Fraunhofer Institute has been working on a project known as BASIC since January 2020, which aims to strengthen the resilience of the cash supply infrastructure in the event of an emergency or crisis. Part of the project has been to develop a security framework to secure the work processes of money and valuable service providers.

The definition of crisis and emergency was broadly set ranging from small to large scale with a wide range of causes. The project started by looking at preexisting emergency plans of the cash cycle stakeholders to validate these plans with regard to successful conditions and a need for action. This was used to establish a uniform framework to allow all to optimise and dovetail their plans.

The Fraunhofer Institute developed a mathematical optimisation algorithm to ensure unrestricted access to cash in the event of a crisis. The BASIC algorithm indicates which of the available ATMs and banks in Germany are the best withdrawal points for cash distribution in the event of a withdrawal of service. The mathematical model created will be used to model people’s cash withdrawal behaviour in the event of a crisis and then to control cash distribution. The algorithm is being tested based on geodata from OpenStreetMap.

When applied within the security framework, the algorithm can be used for operational crisis support (eg. which ATMs should be supplied if only 30% are available) and in crisis preparation (eg. which are the central cash withdrawal points that should be covered by emergency power generators).

The project was sponsored by the German Federal Ministry of Education and Research. The four project partners were the Brandenburg Institute for Society and Security, the Bundesvereinigung Deutscher Geld, Cash Logistics Security AG and the Center for Applied Research on Supply Chain Services at the Fraunhofer Institute for Integrated Circuits IIS.

The Bundesbank, European Security Transport Association, German Retail Federation and the Federal Office for Civil Protection and Disaster Assistance were associate partners.

No Bank Robberies in Denmark

In 2022 Denmark had no bank robberies. This is the first time this has happened.

Perhaps this isn’t so surprising in the context of so many banks stopping handling cash. In 2000 Denmark had 221 bank robberies but since 2017 this has fallen to less than ten a year. The unions note that employees still experience significant abuse digitally and over the phone.