Skip Navigation Links

Intercrim Press - The banknote market – the first line of security holography

20 January 2016

Ian Lancaster is a specialist in holography, optical security and authentication technologies.

- General Secretary of the International Hologram Manufacturers’ Association – from 1993 to 2015

- Co-founder and Managing Director of Reconnaissance International: publisher and editor of Holography News® and Authentication News®, organiser of Holo-pack•Holo-print® conference – from 1990 to 2015.

- Executive Director of the Museum of Holography in New York – from 1986 to 1988.

BoW: As a commercial technology, holography is a very young industry. Do you remember how it began?

I.L.: The holography market was growing rapidly. Commercial growth started just after MasterCard first used a hologram for security in 1983. After that, in 1988, first hologram was used on banknotes (it was Austrian 5000-schilling note). Individual companies and entire countries one after another started adopting the holography technology. In 1995, there was a breakthrough in the industry, when Iraq began to use holograms to protect passports. Since then holography and optical security technologies became ubiquitous. 

Concerning holograms used for banknote protection, we must point out here the launch of the euro banknotes with security holograms in 2002. This was recognised as a very thoroughly researched banknote concept and design, which the IHMA played a small part in. With an initial requirement of around 15 billion holograms, this was not only the largest order for holograms to date, but it was a tremendous vote of confidence in security holograms, encouraging other central banks to use them.

Since 2013 the new series of euro banknotes called ‘Europa’ has started. We already have 5- and 10-euros banknotes in circulation now, and the 20 euro banknote has just come. I think, the holograms used on these new euro banknotes are the next revolutionary step for the banknote security elements extremely difficult to counterfeit.

BoW: What are the advantages of the security holograms used on euro banknotes of the second series ?

I.L.: The hologram on the ‘Europa’ series banknotes of all three existing denominations (€5, €10 and €20) is still a stripe (like on the first series of euro banknotes), but in the new series it is registered to the printed design, so the distinctly different images are in the same place on every banknote. The hologram stripe for the first series previously had a repeating design. The images in the new hologram are large and distinct and also relate strongly to other major features on the banknote in a coordinated or integrated design. The watermark (Europa), the main printed image – the architectural arch, the denomination and the euro symbol are all featured in the hologram and so are easy to reference and check.

The new €20 banknote just released on 25th November 2015 also follows the integrated, easy to authenticate design theme of the €5 and €10. The hologram stripe is again registered to the banknote so the different images, in the same sequence as the previous two banknotes, are also in the same place on all banknotes of this denomination and, therefore, easy to recognize.

The watermark, Europa, is the same as in the €5 and €10 banknotes but in the hologram stripe it covers an aperture or window in the substrate and so becomes visible in transmitted light along with the watermark. However, when the note is tilted and viewed from the front, the Europa image in the hologram displays a ‘20’ value in the centre with prominent coloured diffractive lines around it. When viewed from the reverse side of the note and tilted, the Europa hologram displays a number of different coloured ‘20’s’.

As a result, the hologram in the window is different on each side when tilted, but in transmitted light it displays the same image only in reverse. This Kinegram Review® hologram also has fine registered metallised lines. The other images in the hologram stripe match the printed feature on the banknote, enabling this sophisticated hologram that is extremely difficult to simulate yet is easy to authenticate.

There are other security features in this new €20 but it is the hologram that is the focal or coordinating feature, while the window feature, although not the first in a cotton substrate, is the first with such a sophisticated hologram.

This development for the €20, in my view, represents a quantum leap in banknote security achieved through a combination of optical wizardry combined with an advance in material science/engineering to both create the window and register the hologram stripe to it and the banknote, all without adversely affecting the printing and finishing of a full sheet of printed banknotes.

BoW: ‘Easy to counterfeit’ is one of the most popular arguments to the opponents of holography. The losses of banknote counterfeiting worldwide are really weighty – for example, according to the IHMA reports, in 2007 the losses the Eurozone suffered from counterfeit euro were around $47 mln, and for the USA they amounted to approximately $62 mln. Do you think former holograms (say, before the new euro series) were as weak as it’s said?

I.L.: For more than 20 years of work in IHMA many times I have entered into discussions with opponents of the use of holograms. There’s been a lot of criticism of holograms – they’re easy to copy, they were good when there was only a handful of producers, track and trace is more effective, and so on.

Frankly, most of this is just competitor envy. Holograms can be copied, but a well-designed security hologram, as part of a properly conceived anti-counterfeiting programme, is extremely difficult to copy accurately. This has been proved time and time again. A counterfeit hologram may fool a lay-person; it may even fool, say, a bank clerk or a supermarket checkout clerk, but it won’t fool a trained and equipped examiner. There have been numerous occasions when a customer has contacted the IHMA in panic because their hologram has been copied and every time without fail we’ve been able to show how easy it is to detect the copy by comparing it with a genuine hologram. Usually just by eye, very occasionally using a simple loupe magnifier.

We are held hostage by technology. This is both good and bad. For example, if some time ago to counterfeit a banknote one needed an artist and a high quality printing machine, recently, with the advent of computers, scanners and professional printers, the process has become much easier. So new protective security technologies have shown up, including holography. To counterfeit a banknote with the security hologram is much more difficult, but ‘difficult’ does not mean ‘impossible’. And therefore our task is not to rest on laurels, but to improve the technology constantly. 3D-holograms, demetallisation, multiview holograms, digital holograms, holograms with surface relief – each new step in the development of the technology is an additional protection of banknotes, documents, packages and anything else equipped with holograms.

We also should not forget that no industry exists in isolation. Together with the development of holography evolves manufacturing of paper for banknotes and secure documents, for example. In addition to the watermarks blotches of different materials in sheets of paper are widely used changing the appearance and tactility of paper, and the ongoing transition to polymer substrate worldwide opens up new possibilities for the use of holograms (such as holograms visible in transmitted light ). The banknote market is something of a ‘holy grail’ for hologram producers due not only to the very large volume of notes produced (in 2015 the annual global volume of banknotes produced will be around 160 billion) but also the technical challenge for the security hologram industry in general.

BoW: Do you position holograms in general as public or expert security features?

I.L.: In reality, that depends on the design and quality of the hologram but all holograms on banknotes are primarily meant to be level 1, or public, security features. They are a strong, visual feature on a banknote and are synonymous with security and so people review them, especially if they have highly distinct, simple-to-see and authenticate designs.

The very first credit card holograms had these attributes – the Visa dove and the MasterCard world images. They were both very strong brands and security features, although the card companies claimed they were not for security. In my view the second euro series holograms, which are specifically meant for authentication and to make counterfeiting extremely difficult, epitomise the use of the hologram as a public verification feature.

The euro series is not alone – the new Canadian polymer banknote series uses large holograms with two very distinct images in large vertical windows that are visible from both sides. The first two of the new series of New Zealand polymer notes that were recently released have a similar feature.

But holograms can incorporate covert features which can be interrogated on the spot with simple readers such as a laser light, or a special optical filter. They can also be examined forensically using a high-powered microscope to study the fringe structures in the laboratory. These are unique to each master hologram, so a copy will not have the same fringe structure. The hologram would very useful in this respect for identifying or grouping banknote counterfeits and also in holograms used for brand or product authentication.

BoW: Are there any solutions in today’s market for machine authentication of holograms?

I.L.: There are two ways to look at this. There are handheld and desktop devices for checking holograms, but these are one-at-a-time methods, so they’re suitable for examining suspect notes. However, banknotes are usually sorted at speed (the highest speed sorters run at 120,000 banknotes an hour), and holograms are definitely not suited for interrogation at this or even much lower speeds. And there are other features in the banknote, such as UV, IR, magnetic features and taggants that are much more suitable for sensor evaluation at high speed.

BoW: The birth of the IHMA, which you headed afterwards for many years, almost coincided with the active phase of the holography industry development. Why was the Association put together in the first place?

I.L.: The market was growing rapidly and many new companies were set up to meet this growing demand, especially in the USA and Western Europe, while in Japan Dai Nippon and Toppan – two large print and print equipment companies – had both set up holography operations. By the early 1990s, the holography industry (though very young) have already been formed, so it was logical to start thinking about an industry association.

Steve McGrew, the founder of Light Impressions, identified the need for a register of security holograms because it was so easy for a company to make a hologram to a customer’s design without knowing that it was a counterfeit of one in use on the other side of the world.

Earlier Wasy D’Cruz, then CEO of American Bank Note Holographics, was very keen on the idea to establish industry association and he made the corresponding statement on pages of Holography News.

At the second Holo-pack•Holo-print conference in Geneva in November 1991, Lew Kontnik and I (Lew was my partner in Reconnaissance Holographics, as we then were – changed to Reconnaissance International in 1996) convened a meeting of around 20 companies, which agreed to establish a Working Group to look in to setting up an industry association. That group reported back a year later, when the vote was taken to establish the International Hologram Manufacturers Association.

Today the Association includes about 100 companies and organizations from different countries, and it is actively growing due to the emerging economies – for example, in recent years a lot of companies from India have joined the ranks of the IHMA, and now this country is the second largest presence after Western Europe.

BoW: What is, from your point of view, the role the IHMA played in the industry?

I.L.: Introducing a Code of Practice for members was one of the first things the Association did. Over the years, we’ve improved the process of making members aware of and committed to this Code, which they must pledge to abide by. This has made a significant contribution to the business ethics of the industry. The Association has also got better at vetting membership applicants. There have been times when an application has been refused, telling the applicant to improve their business practices and re-apply, which they have done.

The Association has also helped to improve the understanding and respect for intellectual property rights (IPR) in the industry, through its Guides on Hologram Patents and Copyright.

Saving the best till last, the IHMA’s Hologram Image Register has also helped enormously in preventing members from inadvertently infringing another company’s IP. The IHMA established the HIR in 1994 and it has done its job well. Unfortunately, it can’t “police” the activities of non-members, but for members it has proved its worth, contributing to the detection of copied holograms and even to the apprehension and prosecution of the criminals behind them.

By the way, one of the biggest challenge connected with standardization role of IHMA is the one that the IHMA is focused on now – reaching out to Chinese hologram producers, to encourage them to become involved in the international industry and to help them better understand IPR and the damage that can be done if they don’t undertake due diligence on their customers.

BoW: Will you please comment a little on the future? What challenges do you think the industry will face in the nearest prospective, and where is it heading?

I.L.: Today the market has come to an understanding that the security holograms provide basic and fundamental security standard. The holography was recognised in a 2007 special report by the US National Research Council as having a definitive role in the fight to combat banknote counterfeiting. Our challenge has been to enhance the security provided by holograms so that criminals (who are now and will always remain in the industry) turned out to be the ‘catch-up’.

We see that, despite the availability of various electronic payment systems, mobile payments, NFC and other technological solutions, the issue of cash is not declining – it has been increasing year by year. So we nowneed even more to strengthen banknotes’ protection against counterfeiting.

The future will be largely determined by the ability of new forms of optically variable technologies to displace holograms as an effective yet low cost authentication device but other factors are in play too, including their continuing use on existing notes despite the emergence of competing technologies.

The hologram industry is likely to see further growth as the pace at which anti-counterfeiting technologies combine to provide multi-layered solutions continues to quicken.

I see great opportunities for further development at the intersection of the optical and holographic technologies. HOE’s and nano-optical devices will become a big part of the industry, not only for security, but for lighting control, electro-optical devices, solar energy, visual displays and monitors and more. With Microsoft now involved in HOE-based vision systems, and Google exploring holography, who knows what they might achieve?

It seems, the most hurtful problems that the industry failed to solve was the failure of display holograms to make real impact on the market has allowed other 3D imaging systems to claim that they are holographic. There have been huge advances in display holograms, to give us true 3D, full parallax and full colour holograms, which I believe are the ultimate 3D imaging method. However, lighting remains a problem and is the big hold-back factor. I’d love to see holography established as the 3D imaging medium used for advertising, illustration and so on. But it’ll only happen if holograms can break free of the need for a bright light set at a specific position.

BoW: How do you estimate the holography industry now compared to 20 years ago?

I.L.: It’s more professional, bigger, geographically more spread and more diverse. It’s indicative of that diversity that Reconnaissance (which provides the Secretariat to the IHMA) has changed the name of the annual holography event that it runs: from 1990 to 2012 this was called ‘Holo-pack•Holo-print’, reflecting the dominance of holography for packaging and printing; in 2013 the name changed to simply ‘The Holography Conference’ to better reflect and serve the industry, which is now so diverse, including holographic optical elements, display holograms, light-control films, mapping and visualisation, nano-optics and more. It’s an exciting time for the holography industry!

In The News

In The News

© International Hologram Manufacturers Association
10 Windmill Business Village
Brooklands Close
Sunbury-on-Thames TW16 7DY
United Kingdom
Privacy Policy
All rights reserved.
All trademarks acknowledged