Cost-Effective Technologies Meet the Growing Need for Fraud Control

From an estimated $768.5 million in 2004, the European access control market is set to reach $968.5 million in 2011. Both governments as well as the private sector are deploying access control technology for applications ranging from time and attendance to physical access. This is helping reduce the instances of crime and fraud. In keeping with the technological ascendancy of low-cost solutions, cost-effective magnetic stripe and bar-code card systems, which are used for automatic identification, are becoming increasingly popular. While there are some proven indications that the total infrastructure cost for smart cards and readers is less compared with the extensive network requirement of magnetic stripe set-up, the cost differential is not easily seen by small companies that basically rely on just a few readers and even fewer computers, notes Frost & Sullivan . From this perspective, many small companies are expected to look more into magnetic stripe rather than being aggressive and migrating to smart card technology. In addition to being the oldest and most established automatic ID technology, bar-code technology has the further advantage of being more economical to produce than other access control technologies, since in many cases, an identity card can simply comprise a plastic card with the barcode printed on it. As interest grows in contactless smart cards, contactless readers are poised to experience a related rise in demand. Suited for transactions where speed and convenience are critical, contactless technology is being trialled for payment applications. Several projects involving contactless smart cards in physical access control applications and national ID projects are also in the pipeline. These, together with a recent recommendation by the International Civil Aviation Organization (ICAO) proposing the use of biometrics along with contactless smart cards to ensure safer travel, are expected to expand opportunities for contactless smart card readers. Despite lingering concerns about privacy violations and unacceptably high false reject rates (FRR), biometrics is expected to gain increasing acceptance. Improved performance, greater reliability, lower unit costs and faster verification times have all contributed to growing approval. The publics concept of biometrics may well change once they become aware of the substantial benefits that the technology has to offer in terms of fraud reduction and business operating costs, comments Frost & Sullvan. At the same time, FRR must be reduced so that the denial of access to genuine customers is kept to a bare minimum - particularly important if biometrics is to be used in an open system involving large-scale commercial applications. Overall market growth is expected to be driven primarily by biometric applications and proximity systems. Electronic tokens are set to be the largest and most rapidly growing of the four principal product categories. While time & attendance and biometrics are also set to experience robust growth, electronic keypads are anticipated to become increasingly outdated and suffer from falling demand and revenues. One of the key challenges that suppliers face is shifting market dynamics. Invariably, companies profits are project based and the completion of a project often results in a sharp and immediate shrinking of the companys business. Therefore, the number of customers and projects as opposed to annual turnover is generally regarded as being a better indicator of a companys stability and competitive strength. At the same time, the typically slow materialisation of sizeable government backed projects has resulted in delayed profits for participating manufacturers. This has been compounded by the slowdown in leading European economies, which has negatively impacted spending on advanced technologies. Nev