Koenig & Bauer Banknote Solutions Approach to Innovation: A Customer-Focused Process to Ensure Banknote Integrity and Trust in Cash

Banknote Solutions

Aurelie BerthonKoenig and Bauer Banknote Solutions, specialists in printing equipment for the banknote industry, is hosting its Equinox 2024 event in May and June. Once again, this year, the focus is on innovation. Aurélie Berthon, Head of Product Management & Innovation at this world-leading Swiss company, sheds light on the technical challenges of banknote printing.

What is the innovation department’s role at Koenig & Bauer Banknote Solutions?

KBBS does not supply machines, it supplies integrated solutions. Innovation is only part of my job and the work of my teams. We define our product strategy to suit our customers’ needs, and innovation is part of this approach. We don’t do fundamental research, but we do provide solutions for our customers, either through complete innovations, or by optimizing the products they already have.

We focus on sustainable development, increased productivity and excellence in banknote security. The aim is to enable our customers—printers and central banks in particular—to retain the confidence of their own customers, the commercial banks, and of all cash users, while increasing productivity.

Innovation therefore applies to security features, design, printing plate manufacture and production machinery. But also, to a very wide range of cross-functional products, inspection systems, cameras with algorithms that analyze what is being printed, or machine data management systems. In short, everything concerning banknote creation and production.

Every year, KBBS devotes between 10 and 15% of its sales to research and innovation. Why?

We provide our customers with specific, long-lasting solutions that meet the most stringent security and quality requirements. In fact, banknote series are printed over the long term, sometimes up to 15 years, and we offer banknote security and quality guarantees, throughout the production of the series, even if for industrial reasons our customer changes equipment generation or requests modifications.

We therefore continually integrate new technologies with today’s best-proven equipment in terms of reliability, safety and quality, while avoiding over-engineering that has penalized the sector in the past.

How is innovation structured at Koenig & Bauer Banknote Solutions?

Lausanne, Switzerland, is home to our expertise in banknote printing processes.

Our product management practice guides the choice of technical solutions best suited to customer and market expectations. The Product Management & Innovation department drives our product strategy and structures all our innovation projects.

We have multi-disciplinary teams, allowing constant cross-fertilization within our project members, which pool all the skills required, including engineers, chemists, physicists and computer scientists. We also work seamlessly with the other entities of the Koenig and Bauer Group, to exploit state-of-the-art technology in the printing sector.

Are your customers involved in the innovation process?

It all depends on the customers’ needs. All our customers have high expectations in terms of innovation, but they don’t necessarily all have the R&D resources to launch projects.

Customers with a structured R&D approach play a key role in the development of new security features or in testing new technologies. Examples include the Bank of Canada, and the central banks of Mexico and Australia. The Bank of England is also very active in developing new solutions in line with sustainable development principles.

Other customers, who don’t necessarily have sufficient in-house R&D capabilities, expect us to develop solutions that meet their needs. To increase banknote life and resistance to soiling, and to meet a specific need of one of our customers, we developed a varnishing module integrated into an existing machine at the express request of a Euro printer.

Can you give us some specific examples of innovation coming out of your workshops?

Spark is a well-known example, adopted in over 100 countries. It’s a security feature for the public, made possible by an extremely safe printing system, with very exclusive equipment, but easy to implement. Each party contributed their expertise: SICPA for the inks and technology, and KBA-Giori, now KBBS, for the screen printing process and machine integration.

Another example is the new “Selective Inking” for intaglio. After years of research, the industrialization phase is approaching. This is a key project, as intaglio is an essential process that gives banknotes special tactile and security features. Our new system will be easy for operators to use, with automation and operator assistance tools. Operators are an important issue, as there are new generations to train, and we need to provide them with more modern, easier-to-understand tools, while retaining the technological specificity of the process. “Selective Inking” therefore offers several advantages: it reduces the cost of intaglio, by reducing ink losses, while retaining the same functionality and print quality.

Precisely how long does a printing line last? And how do you strike a balance between the durability of printing machines and changing requirements?   

Modularity is the key, enabling us to add new components or replace existing ones. Machines have very long life spans. So, we have to give our customers the possibility of introducing equipment upgrades for at least 15 to 20 years, to print new security features or improve productivity. We therefore combine the development of any new functionality with the possibility of retrofitting existing presses, so as not to force customers to invest in a new machine: they won’t be changing machines every time they launch a new note. However, a customer may need to change a machine during a series, while maintaining the very high standards originally defined.

For security offset printing, which you find on all banknotes, we have set up a modular platform that adapts over time to market needs. In practice, this is the Super Simultan press, which has continually evolved, with, for example, a 10-color module, or other specific modules meeting customers’ particular requirements. We’re working on a new platform that will enable us to take modularity even further for equipment that will still be in use in 20 to 30 years’ time.

Artificial intelligence is becoming increasingly important in R&D processes across all sectors. How does this apply to Koenig & Bauer Banknote Solutions?

The banknote industry is one of the forerunners in this field. Current developments are increasing the power and speed of an approach we already have some experience of, since KBBS has been developing algorithms for online banknote quality inspection and analysis for over 20 years. This enables the operator to make the necessary changes to avoid deviations that may not be visible to users but are detectable by equipment. For obvious security reasons, the data is collected locally by our equipment enabling printers to maintain flawless integrity of the quality, quantities and progress status of each sheet, and then of each printed banknote. Our equipment therefore generates a huge amount of data that AI can interpret, particularly to increase the productivity of any printing plant.

Do you think machines will replace humans in the banknote printing sector?

I don’t think there’s a real risk of that at the moment. There is a trend towards reducing the number of operators in printing plants, but for now it involves certain demanding tasks that can be robotized, such as handling inputs or stacks of sheets. Precisely because these machines offer new operator assistance functions, they need an operator who understands the process and the operator aids to be able to use them properly, and this as an opportunity to further enhance the role and skills of our customers’ employees. This is the focus of the training courses we offer, which take place on the customer’s premises.

This explains why our teams spend days on the machines to really handle, experiment and analyze the product, and thus advise and assist the customer. This is also why we organize demonstrations and tests here in Lausanne.

A more personal question: how did you end up working in the banknote industry?

When I finished my studies in mechanical engineering between France and Spain, I chose to work in engineering design before moving on to more product management positions. I worked in the automotive and petrochemical industries, before joining KBBS in 2011 as product manager for a foil application machine, a very “mechanical” process. In those early years, I learned all about security and banknote printing! 

Have you witnessed any particular changes in the industry to date?

I’ve noticed a growing number of women in our sector, both among suppliers and customers, as at the Bank of Spain, where there are many women in senior positions, at Canadian Bank Note, in Canada, or most recently at the head of the Bureau of Engraving & Printing, in the United States. This is a great thing: discussions are different, and there’s perhaps a greater sense of collaboration. But I’m opposed to quotas: what counts above all are skills.

The Equinox 2024 event has recently begun. What is the significance of this event for your teams in particular?

Equinox is a major event held in May and June, where for four to five weeks KBBS hosts senior executives and experts from our customers, central banks and printers, to discuss trends, expectations and our latest developments. As a player for over 70 years, we also have a responsibility to understand and study changes in the use of cash and the impact on its functionalities and means of production.

Few weeks ago, we held a pre-event, where together with my team we met with designers and people in charge of new banknote series or cash circulation, to discuss very concrete issues, such as the production of plates, security features and design. They can meet their counterparts from other cultures, with other approaches, see how they use the products, identify improvements, etc. This also consolidates our ties with them: it’s not a company talking to a company, but people who know each other and form a community of experts, often over many years.

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