• Thierry Spanjaard

2018, a further step on the dematerialization path

Probably the most important event of 2018 in the secure transactions industry is the one that did not happen: the acquisition of Gemalto by Thales! At first, a bit more than a year ago, the companies anticipated the completion of the transaction in the second half of 2018. Now, they expect to finalize the acquisition in the first quarter of 2019, when all regulatory clearances will be granted.

In the telecom segment, 2018 will be remembered as the year the first 5G pilots happened in various parts of the world. The vision behind 5G is a unification of various networks, from high data rates for end users to IoT networks with low power and low throughput. Unlike former generations, 5G networks rely on a variety of authentication solutions, which means the SIM will no longer have the central role in user authentication and rights management it had until now. Going into the same direction, the eSIM has finally gained general market recognition with its implementation by Apple.

In the payment segment, diversity in the means of payment is always increasing, with the fast growth of QR-code based solutions, such as WeChat or Alipay, that are on a world conquest path. This way, in the midterm, the banking card as we know it may no longer be the most recognized payment means worldwide.

Year 2018 has also been marked by an increase in giant hacks, demonstrating once more the need for secure data administration policies. This is where the secure transactions industry comes into play with its expertise is data management and especially in the combination between a centralized solution and remotely managed authentication means. The most important event in enterprise security in 2018 was the enforcement of GDPR (General Data Protection Regulation) in Europe, although it is probably too early to see if this regulation brings an improvement in personal data protection or if it was just the creation of a business bubble for consultants. However, a positive aspect of GDPR is the raise of awareness about privacy in the general public.

Biometrics grew in importance in 2018. Government identity is always using more biometrics from fingerprints stored in ePassports and other government identity documents to the massive use of face recognition for population control. Biometrics are also increasingly used in private businesses, as is demonstrated by the increasing number of pilots using biometrics for payment regardless whether the fingerprint sensor is in the card or in the payment terminal.

Dematerialization is on its way in all segments of our industry. The acquisition of Gemalto by Thales is going into the same direction when they essentially promote the synergies in digital security and do not specify what’s bound to happen to SIM and banking card manufacturing plants.

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