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Yes, we can!

Week 04, 2009

In many ways, the new American administration will have a heavy influence on our industry, both in the USA and abroad. Barack Obama has announced the single largest new investment in the nation's infrastructure since the creation of the interstate highway system in the 1950s under Eisenhower.

Change has already started with the involvement of our industry when Giesecke & Devrient delivered 200,000 limited edition SmarTrip cards to the Washington Metropolitan Area Transit Authority (WMATA) to commemorate President Obama’s inauguration.

 

Ongoing restructuring in telecoms, will influence the world split between GSM and CDMA, and also how fast and with which standards 4G will emerge. Barack Obama has appointed Julius Genachowski to head the FCC (Federal Communications Commission). Genachowski was the FCC's chief counsel under the Clinton administration, and is known to be a supporter of net neutrality, a concept that has broad ramifications for mobile operators that provide internet access data and value added services.

More payment card holders are conscious of fraud risks than ever before: Gemalto’s “Digital Trust Barometer” survey showed 57% of Americans are afraid someone will steal account passwords when banking online, 38% do not trust online payments, 74% are afraid of identity theft and 44% are afraid of online bank account hijacking. This could be seen as positive grounds to switch from magstripe to a more secure technology, contact or contactless (given they are not used in magstripe emulation mode) smart cards. EMV is on the way to a global rollout in Europe and in many countries in Asia, Latin America is committed to EMV, Canada will complete its EMV migration in 2010. Why should one of the most technologically advanced nations stay behind?

The continuation of HSPD-12 (Homeland Security Presidential Directive) will have an impact on the completion of existing programs and the adoption of new technologies in identity in the USA. Analysts anticipate the Obama administration is likely to spend US$ 750 million to US$ 1 billion (EUR 578 to 770 million) on biometric applications this year, primarily in defense, intelligence and homeland security. This will include key programs in Defense such as the PIV card, and the Homeland Security Department’s US Visitor and Immigrant Status Indicator Technology (US-VISIT).

However, not all analysts are positive for the short term : “Still, the distractions of the transition – magnified by the economic crisis – will slow some projects and delay the creation of new ones. We forecast flat government spending for 2009 outside of several key programs, as a new administration takes a year to review and reshape existing initiatives,” said Jeremy Grant, an analyst for the Stanford Group research firm.

The Real ID Act that calls for driver's licenses and other state-issued IDs to include digital photos and be readable by scanning devices, was signed into law by President Bush in 2005 as part of the government's effort to combat terrorism. The DHS (Department of Homeland Security) is responsible for implementing the Real ID rules, but the law has been widely criticized by privacy advocates and civil rights groups. There's no mandate that states issue Real ID cards. But eventually, all citizens will need IDs that comply with the requirements in order to board planes, enter federal buildings and receive federal benefits. The Obama administration will have to settle the Real ID issues, and to prompt the DHS to work more cooperatively with states on Real ID implementations

In the long term, some larger projects could even be launched: Dominique Trempont, former CEO of Gemplus US believes that the US should roll out one multi-application smart card to the entire population in order to automate various government and private-sector functions. "The card can be partitioned into application segments, and the companies rolling out applications on it can pay for the privilege," Trempont says. The first application category for a smart card is a government-owned, centralized patient record database that then becomes the heart of the US health care system, and a second application category could belong in the realm of security and identity. Passports and driver's licenses could be implemented on the smart card.

More globally, recovery from the economic crisis will have a deep impact on the future of our industry. So, let’s wish the best to President Barack Obama, and his US administration.

Thierry Spanjaard
Chief Editor
Smart Insights