Interview: Jussi Kangas on the future of cash

Bank of Finland adviser says it’s challenging to keep the cash cycle efficient as usage falls
Jussi Kangas
Jussi Kangas: “We have identified the retail sector as one of the key stakeholders and we should make sure the cost of cash for them remains reasonable”

The future of cash is a concern for all central banks, and understanding how data can be used to help forecast demand is becoming an increasingly vital part of cash departments’ data-to-day operations. Rachael King speaks to Jussi Kangas, an adviser to the Bank of Finland’s cash department and a member of the European Central Bank’s banknote production expert group, to find out more.

What is the biggest challenge that central banks’ cash departments face currently?

The biggest challenge is to keep the cash cycle efficient and the cost of cash for the society reasonable while cash usage is declining. This is the key question in trying to maintain the cash acceptability and the robust supply chain.

How is the Bank of Finland responding to this issue?

We always aim to look at the cash cycle as a whole and try to minimise the overall costs. We have identified the retail sector as one of the key stakeholders and we should make sure the cost of cash for them remains reasonable. Central banks should be careful not to place too much regulation and requirements for cash production and handling.

Data management had become an increasingly integral part of the day-to-day cash-management strategy of central banks. How does the Bank of Finland collect banknote data?

We get most of our operational data from CashSSP1. It provides us with data on issuance, sorting and storage.

Using the data to forecast future demand is vital. However, the anonymity that cash grants a user makes estimating cash usage difficult. How does the Bank of Finland calculate cash usage?

As we are in the euro area, we do not have accurate figures for the amount of cash in circulation in our country, but we have some estimations on it. What we can monitor also is the amount of cash processed by the professional cash handlers and, more importantly, the amount of cash distributed to the public. We also do various surveys regarding cash usage by the public.

Does Finland’s integration with Europe, and the use of the euro, impact how the central bank forecasts usage?

Yes, definitely, it impacts a lot, as euro cash is moving freely inside the area. Furthermore, because of the shared stocks and production volumes, forecasting needs to be done together within the European System of Central Banks.

What model does the Bank of Finland use to forecast future demand?

In our case the net issuance has been remarkably steady, which, of course, makes forecasting easier. Anyway, I think that if and when there were major and sudden changes in cash demand, these changes would be typically quite unpredictable. So central banks must always have a big enough buffer of stocks. This buffer gives the needed time to react to the change.

What is the general consensus around cash in Finland?

The usage of cash continues to decline, but it is widely acknowledged that cash is still needed.

How is the central bank combating the slow transition to electronic means of payment?

The Bank of Finland is working for efficient payment systems. If the public changes their preferred way of making payments, it is not our task to combat this change. However, it is our task to make sure those who still prefer cash have the possibility to continue using it.

Do you think cash will still be used in Finland in 2025 in the same volume as it is now?

No, I think the decline in using cash continues.

Kangas will be speaking at the Future of Cash conference in Athens on February 20.


  1. Cash SSP is a logistical cash-management IT system in use at the central banks of Belgium, the Netherlands, Luxembourg, Finland, Ireland, Cyprus, Latvia, Malta and Estonia. It allows the central banks to handle the exchange of notes and coins with commercial banks and cash-in-transit companies.
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