Market Trends of Security Printing Industry
Banknotes Segment Holds Major Market Share
- Central banks are increasingly opting for advanced materials like pure polymer substrates, paper/polymer blends, and enhanced coatings. While these choices come at a higher cost, the switch to polymer can yield substantial savings for issuing authorities. This is due to the polymer's extended lifespan and heightened resilience to folding, soiling, and microbial threats.
- The surge in both local and global polymer counterfeiting has been a pivotal factor driving banks to modernize their banknotes. Traditionally, banknote substrates have been crafted from paper, often derived from cotton fibers for robustness. Some variants incorporate linen, specialized colors, or even forensic fibers to bolster their distinctiveness and deter replication.
- Furthermore, the uptick in security paper usage in currency printing is a direct response to the escalating counterfeit banknote challenge. Security features like threads, holograms, and watermarks are now commonplace. Watermarks, especially prevalent in banknotes, offer easy public recognition and shield against scanning, chemicals, mechanical tampering, and reproduction. Complementing watermarks, security fibers further fortify defenses against color photocopying.
- For instance, the Reserve Bank of India has introduced distinct security elements like watermarks and threads to set its currency apart from counterfeits. With incidents of counterfeit currency on the rise and the need for continuous currency circulation to support economies, the security paper market is witnessing a surge. As the forecast period progresses, the market is poised to leverage cutting-edge security technologies and printing methods in banknote production.
- Euro banknotes, crafted from pure cotton paper, possess a natural degradation process over time. The Euro system employs a "decentralized pooling" approach for printing, where each of its facilities focuses on specific denominations. Emphasis is placed on countering counterfeiting, maintaining note quality, sustainable production, and environmental protection.
- The Reserve Bank of India's annual report highlighted the detection of around 91,110 counterfeit INR 500 notes in the fiscal year 2022-23. Notably, the latest data reveals an 8.4% rise in counterfeit notes for the newly designed INR 20 and a 14.4% increase for the INR 500 compared to the previous year.
- The increasing number of counterfeit attacks on banknotes, cheques, ID cards, and other services will significantly drive the growth of the security printing market. According to the Bank of Korea, during the first half of 2023, the most detected counterfeit banknote in South Korea was the KRW 5,000 bill, with 73 such banknotes. It was followed by 26 KRW 10,000 banknotes.
Understand The Key Trends Shaping This Market
Download PDF
Asia-Pacific to Account for Significant Market Share
- Asia-Pacific is forecasted to observe impressive growth during the forecast period as a result of the adoption of advanced security printing technology in countries like India, China, and Japan. The market is anticipated to witness consistent expansion in the forthcoming years, driven by technological advancements and a growing focus on document security. Moreover, the government's focus on increasing the adoption of personal identification technologies across emerging economies is further expected to drive the demand for security printing solutions in the region.
- For instance, High-Security Printing Asia, organized by Reconnaissance, is part of a trio of regional events that take place every year to cater to specific regions. This event focuses on government-specified documents, including currency, fiduciary documents, excise stamps, ID cards, e-passports, visas, vehicle documents, and licenses, with a special emphasis on banknotes and emerging technologies for ID and travel documents. Running alongside the event is a trade exhibition featuring approximately 30 exhibitors from the currency, e-passport, smart card, authentication, and related industries.
- India is expected to contribute significant market growth over the coming years due to the growing adoption of security printing technologies. The market for holographic security printing in India is experiencing a boost in demand, as highlighted by the International Hologram Manufacturers Association (IHMA).
- This growth is being driven by efforts from state authorities, the national government, and law enforcement agencies to enhance security measures through both overt and covert protection strategies. The region is seeing a notable rise in the security printing sector, attributed to the government's initiatives to combat counterfeiting and the growing utilization of security printing solutions across various industries.
- The increasing number of counterfeit activities across the region is expected to drive the demand for security printing services. According to the Reserve Bank of India's latest report, during the 2022-23 fiscal year, 4.6% of the total Fake Indian Currency Notes (FICNs) detected in the banking sector were traced back to the Reserve Bank, while the remaining 95.4% were detected at other banks. There was an 8.4% surge in spotting counterfeit notes in the INR 20 denomination and a 14.4% increase in the INR 500 (new design) denomination compared to the previous year, 2022.
- Additionally, the central bank identified 78,699 fake Rs 100 notes and 27,258 fake Rs 200 notes in the same year. These significant factors influencing counterfeit activities in the region will contribute to the enhancement of security printing opportunities.
- Growing fake currency activities across other regions of APAC, such as China, Hong Kong, Japan, and others, are expected to drive the security printing market. In January 2024, as reported by Sichuan City authorities, a couple residing in Chongqing was arrested for producing counterfeit currency in their residence and using more than half a million yuan (USD 70,000) in fake notes over a period of five years. The investigation uncovered that from 2018 to 2023, the couple successfully circulated over 500,000 yuan in counterfeit money throughout Wanzhou and nearby regions, resulting in significant financial harm to the local populace. Such significant activities in determining the availability of counterfeit currency will improve the market opportunities.
- Similarly, in June 2024, The Hong Kong police issued a warning to the general public regarding the increasing prevalence of counterfeit banknotes in the city between January and April 2024. During this period, authorities confiscated a total of 3,396 fake notes amounting to HKD 2.55 million (USD 326,130), a significant surge from the 553 bills worth HKD 166,220 (USD 21,291) seized in the same timeframe in 2022. Notably, three cases of fraud related to cryptocurrency transactions contributed substantially to this year's counterfeit incidents. The rise in counterfeit currency instances is expected to fuel demand in the market.
Get Analysis on Important Geographic Markets
Download PDF
