Banking sector holds its own in smart card arena
28 March 2002 | 3779 views | 0
The financial services smart card market grew 21% in 2001, driven by country-wide projects to replace existing magnetic stripe bank cards with smart technology, according to new research from SchlumbergerSema.
The figures, which form part of SchlumbergerSema's annual review of the smart card industry, compare with year-on-year growth rates for the entire smart card industry falling from typical +20% levels to just +3% in 2001.
The report shows the EMV (Europay MasterCard Visa) specification continues to dominate the industry, with Brazil, Korea and Japan emerging as the newest smart card financial markets, and the UK entering a maturity phase.
The case for smart cards in the banking industry was originally built on controlling fraud. Today, applications are increasingly focused on winning and retaining customers by offering innovative multi-application cards with multiple services, such as credit, debit, e-purse and cash dispensing facilities; new functions such as loyalty, secure remote access to accounts; and even non-banking applications like healthcare, says SchlumbergerSema.
Technologically, a number of platforms notably JavaCard and Multos - are still competing for leadership in open standards, but none is expected to become dominant in the near future. SchlumbergerSema does predict, though, that the banking sector is likely to be the first volume adopter of the company's USB-compatible e-gate smart cards, which enable high security, smart card-based services over networks for authentication and payment.
Philippe Cambriel, vice president, e-transactions cards, SchlumbergerSema, says: "The provision of end-to-end solutions for multi-application cards is now key for financial institutions re-engineering their customer relationships and deploying multi-channel access to reduce time-to-market for these new services and cut total cost-of-ownership."
Alongside the strong momentum for banking applications, other key smart card market trends impacting 2002 include the anticipated dominance for the JavaCard platform, and the continuing rise of the Asia-Pacific region. Looking forward two years, SchlumbergerSema expects smart card-enabled PKI (public key infrastructure) technology to play a growing role in the deployment of many 2.5 and 3G networks, the roll-out of national ID card programmes, and the implementation of smart card-based network access for enterprise IT systems.