“Smart Security” industry withstands crisis

With nearly 7 billion smart cards in use, the industry’s activity remains linked mainly to profound global changes in fashion and lifestyle, which are almost impervious to the crisis. This will be the message from the 1 500 delegates and 500 companies expected at the CARTES & IDentification trade show, the global event for digital security and intelligent technologies, from 17-19 November 2009, in Paris Nord Villepinte.
 
No-one is going to stop using their mobile phone or making purchases with their bank card. Similarly, crisis or no crisis, secure identity cards will still be needed to cross borders…
Structurally, the smart card industry’s three major markets – mobile telephony, payment and identity – are currently only experiencing collateral and marginal effects from the financial crisis impacting the global economy.
 
The latest results from the industry’s key players demonstrate not only a strong resilience to the slowdown in activity but also a significant and sustained potential for growth. 
  
Three reasons to be optimistic

Firstly, the “Smart Security” industry is tackling the crisis after having completed its cost reduction, rationalization and internationalization programs. These foundations, which are now global, are a stabilizing factor in optimizing operating costs and facilitating market access. The latest crisis experienced by the industry in 2001 revealed its close dependency on the emerging telecoms, internet and mobile sectors, with effects made more widespread by the semi-conductors industry. This time, despite it being more global and profound, the crisis is most drastically affecting the property and automobile sectors and to some extent sparing the digital economy.
 
Secondly, the “Smart Security” industry has now achieved a critical mass giving it an independence which it did not have in the last crisis. It is much less dependent on other business sectors. It has become autonomous as a result of the size it now represents (soon there will be 7 billion cards in use, with more than 4.5 billion cards issued this year), particularly in the mobile environment.
 
Finally, the three main “Smart Security” markets are influenced more by a long-term and profound change in lifestyles and fashions than by investment policies. Although forecasts made last November by Eurosmart for 2009 risk being revised slightly downwards over the coming months, predicted growth rates in the number of cards marketed are more than 10%.
 
The SIM market, which is due to grow again by more than 12.5%, is proving to be fairly independent of mobiles phones, which are due to decrease in volume this year by 8%. In practice, the SIM market is related to the number of GSM subscribers, which reached 3.4 billion last year (for 3.6 billion SIM card issued). It can be estimated that between 2.3 and 2.5 billion SIM cards will be issued directly to meet the demand (renewals and changes of operator) generated by an “numbers in use” effect independent of mobile sales and new subscribers.
 
The payment card market also appears to be well-prepared for movements already affecting consumers’ purchasing behaviour. With a growth rate of 14.8% in volume**, bank cards remain one of the favoured methods for retail banks to build loyalty and win new customers. Growth in this sector remains led overall by demand related to security and EMV migration. This is also true in the payment-terminals market and the two-factor authentication market. Secure access to online banking services is proving to be a way for banks to respond to regulatory imperatives, as well as recognition and image.
 
In the identity sector, a similar phenomenon can be observed: security, including the ease-of-use offered by secure travel documents, is becoming a growth factor.
Governments also need to speed up programs to reform administrative procedures for reasons of economy and efficiency of public services. These e-services offer greater ease-of-use for citizens (less travelling and queues) and are likely to contribute to the development of a digital democracy.
 
To keep up with all the changes in the market of the “Smart Security” industry and discover how dynamic the CARTES & IDentification trade show is, come to Paris Nord Villepinte on November 17th to 19th!