Reasons for developing the Chip Authentication Program

Account acquiring costs:
If one compares the account acquiring costs:

• Portfolio Acquisition
• Direct Mail
• Telemarketing
• Internet Application

It is clear that the costs are significantly lower for the Internet Application, still having good response and activation rates.

Even if comparing different types of applications:

• Loan
• E-Banking
• Bill Payment
• Mortgage Loan Origination
• Loan Servicing

The Internet channel wins hands up, with 13% to 33% lower costs

Still many customer have fear to be on-line and to use on-line services, because of hackers and fraudulent use.
So there is a concern about security and feeling uncomfortable with on-line services.

At the same time there is an immense increase of use of the Internet. However the on-line Banking and On-line shopping is not keeping pace with the increasing trend of the Internet use.

This can be explained by the increasing existence and occurrences of hacking, Phishing, viruses, identity theft, stealing of credit card numbers, worm, keyboard loggers, ...

So the trust of the Internet channel is at stake for the Financial Institutions.

Therefore the business objectives are:

• Coherent, any services, any delivery channel
• Highly secure for a fast evolving problem
• Cost-effective:
  Using strong cardholder authentication.

Coherence:
For bank delivered services, directly (e.g. e-banking) or indirectly (e.g. e-commerce)
Relying on a mechanism known by the customer (i.e. ATM) across all channels, now and tomorrow
Leveraging on existing trusted and known tool in the physical world

Security with aggressive demands:
Simple for the customer, yet highly secure
Easy to remember but not replicable
Works equally well over any delivery channel

Cost effective:
A mass market solution is needed across all channels for customer convenience.
Single authentication method means MUCH lower costs:

• Just one method to manage and administrate
• Less cardholder confusion so less help desk support
• Marketing, communication and physical delivery costs all part of normal chip investment
• Leveraging on current known secret (PIN?)
• Leveraging on current technology investment - EMV

The answer:
Strong, chip authentication
Based on "something I own" (the chip card - CAM)
And
"something I know" (the PIN - CVM)

"One Chip One PIN for Everything"

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