STRONG AUTHENTICATION FOR ONLINE BANKING AND E-COMMERCE
AS A BUSINESS DRIVER FOR BANKS
Nathalie HA, Business Development Manager XIRING
Prague, 12th December 2008
Internet Security for People 1

In absence of a trusted space
Internet Security for People 2

AGENDA
XIRING at a glance
Online Revenues expectations in Europe
MasterCard, Visa Roadmap for Authentication
EMV-CAP/DPA Europe Status
3 Case studies & a national survey
Nationwide: “To fight Fraud in CNP”
Tatra Banka : “Cost reduction”
PBZ: “Cross Selling and Innovative services”
UK Survey: “Increasing customer confidence”
Internet Security for People 3

XIRING at a glance
28.5 (e)
- XIRING is a European provider of security
+20%
solutions for remote transactions
2004 - H1 2008 revenues in €M
Listed on NYSE/Euronext stock exchange 18/09/06
23.8
Designs, manufactures and markets solutions for
authentication, digital signature and secure +86%
transactions.
Whether for personal or professional use, XIRING +42% 12.8
solutions leverage the security characteristics and H1
+76% 9.0 12.9
mechanisms of smart cards.
Offers a full range of personal, mobile and portable 5.1
smart card readers and terminals, embedded software
solutions and related services to secure transactions.
2004 2005 2006 2007 2008
More than 10 millions readers to 30 countries
9.4%
- Two key markets: Banking and Healthcare
breakdown/sector
2008 H1 revenue
e-ID
XIRING is one of the world leading providers of
security solutions for remote transactions for e-
banking and e-commerce. 46.5%
Health
XIRING is the leader of solutions provided to the Bank
French healthcare system: SESAM-Vitale.
44.1%
Internet Security for People 4

The Internet @ the heart of
multichannel banking
- Banks dematerialize their sales channels
Customers want to better control when, where and how he buys what
Customer relationship model adapts itself to « Branch / Non branch »
interconnections
Banks respond with diversified products, less complex, more personnalized
services
Security: a compromise of requirements in terms of ‘convenience’, ‘cost
efficiencies’ and ‘trustworthiness’
Internet Security for People 5

Online Banking Revenue Forecast
in Europe, 2007 – 2011
- Online banking represents 18% of the total banking revenue in the UK in
2007.
Across Europe, the objective is to double the Internet revenue % / total banking revenue.
Internet Security for People 6

Online Banking Sales Future
Souscription
moyenne
Europe
24%
Average European attractivity to buy is twice as big as current purchases
Internet Security for People 7

The MasterCard – Visa Authentication
Road Map : EMV – CAP – 3D Secure
Worldwide schemes commitments
-
• http://www. http://www.visaeurope.com/aboutvisa/products/dyn_pass.html
• https://mol.mastercard.net/mol/molbe/public/login/ebusiness/smart_cards/one_smart_card/index.jsp
• http://www.remotecardauthentication.info
• http://www.homechipandpin.co.uk
⇒ win-win synergies with investments made in payment systems deployments
⇒ a security level that is identical in the real and physical worlds
Standard mondial Standard mondial de
Norme mondiale des cartes
d’authentification paiement e-commerce
de paiement à puce
(Visa et MasterCard)
MasterCard CAP
EMV Chip Authentication Program
3D Secure
(Europay, MasterCard, Visa) VISA DPA
Dynamic Passcode Authentication
From ‘card-present’ to ‘card-not-present’ payments, in confidence
-
Internet Security for People 8

EMV-CAP status in Europe
- EMV-CAP strong authentication for e-banking and e-commerce Market
More than 60 Millions Users equiped by 2010
In M Oct. 08 (e)
Jan. 08 2010 (e.)
Vision 2010 Nber of Online banking 110 200
135
users
Nber of Users equiped
with a EMV-CAP solution 14
10 60
Scandinavia
5.8 M
Equipment rate 9% 30%
10.3%
UK + Irl Sources : Eurostat, Forrester Research, APACS, ACSEL, FEVAD, XIRING
15.7 M
Benelux
9.7 M
Germany
Mature Market
CEE
Austria
France 1.4 M
4.5 M
Switzerland, Scandinavia, Benelux, Croatia,
10 M Switzerland
2.5 M
Slovenia,UK
Europe du Sud
(Italie, Espagne, Portugal,..)
South Europe
Emerging Market
9.5 M
(Italia, Spain, Portugal,..)
Turkey
9.5 M Central and Eastern Europe, France, Italia
1M
Developing Market
Spain
Internet Security for People 9

WHY EMV CAP-DPA?
Followed by case studies (CS)
Most of the time, decision to deploy card-based strong
Nationwide :
authentication is taken with fraud reduction in mind.
« To fight fraud in
CNP »
By deploying such solutions, banks save major hotline
Tatra Banka :
costs and operational cost.
« Cost reduction »
Full online e-subscription for financial products and
PBZ :
services (until the contract signature, no more paper),
« Cross selling &
the last step in dematerialization
Innovative services »
UK national survey: Banks having equipped their customers with such a
solution will be rewarded by a higher loyalty due to the
« Increase customer
increased confidence environment they offer.
Confidence »
Internet Security for People 10

« To fight fraud in
CNP »
Most of the time, decision to deploy card-based strong
authentication is taken with fraud reduction in mind.
Neil Lover
Nationwide Building Society

Fraud Trends:
• Card fraud increased dramatically during the early
21st century
• Counterfeit, Lost/stolen and Intercept fraud were
partic