The Digital PIN ROI Operational Savings + Security

November 2009

Agenda

Current Market Situation

Pros and Cons of PIN Issuance Methodologies

Cost and Security Advantages for Moving to Digital

Egg Banking Case Study

SafeNet Today…

protects:• the most money that

moves in the world. 80% of all electronic banking transfers -- $1 Trillion a day

• the most digital identities in the world. Most PKI identities for governments and F-100 companies

• the most high-value software in the world. 80 Million hardware keys; more than any other vendor

• the most classified information in the world. The largest deployment of government communications security

PIN Issuance Market

The Reality

Fact: The card and payment market is growing at approximately 10% a year WW & PIN mailers costs issuers millions

This means your cost is going to continue to rise.

The Reality

Fact: Hackers are becoming more sophisticated and identity theft makes up $45 billion of crime in U.S.

The cost per fraud increased 25%- $691/incident

The need to protect against fraud is more critical than ever!

*source Javelin Group 2008

How Do We Stay Secure?User Authentication

Cardholder verification method (CVM)

Signature

PIN

PIN

Online - verified by issuer

Offline - verified by card

Who Manages This? Card Issuers

730 Million EMV cards WW

Role of the Card Issuer: Initialise each card

Establish key pairs

Personalise each card PIN

SDA signature

Key Pairs for DDA

PIN encryption

Keys for Application Cryptograms

Secure Messaging

…

Issues with Traditional PIN Issuance

Method: Issues:

Paper-based PIN mailers 1) Delay in card usage

2) High cost

3) Highly insecure

Susceptible to angled-light attacks

Mail interception

ATM PIN selection 1) ATM susceptible to manipulation

Interactive voice response 1) Not easy to secure

Impossible to encrypt and travels over a public network

http://business.timesonline.co.uk/tol/business/money/consumer_affairs/article4259009.ece

The Digital PIN Issuance Advantage

Imagine a World of Secure Digital PIN Issuance

Secure PIN delivery endpoint

Real time delivery

Provide an end-to-end encrypted transaction

Separation between the cardholder identity and the PIN

No risk of internal or external breach

Digital PIN Issuance Advantages

Reduces operational costs, increases revenue, and saves resources for banks, credit card companies, and retail program-membership card issuers.

Eliminates paper PIN issuance costs an upwards of $1.50 per mailer

Reduces frequency of PIN requests ultimately reducing overhead expenses

By increasing the security around PIN issuance, they will actually be reducing the cost per incident of $691/incident *source Javelin Group 2008

Digital PIN Issuance Advantages

Digital format is often easier to use and provides instant issuance of PIN

Cardholders conveniently retrieve a PIN for a newly issued card online

Enables instant PIN retrieval, card will be top of wallet. In contrast, delivery of PINs via mail takes an average of 10 days, which could be 10 purchasing days a cardholder is using a competitor’s card.

No worries about the PIN mailer getting lost in the post

Digital PIN Issuance Advantages

Eliminates PIN-based fraud and far surpasses the security provided by paper-based PIN mailers or voice-based interactive systems

Eliminates PIN based fraud because it bypasses the paper based PIN mailer system and postal delivery systems

Even the most recent online systems, such as interactive voice response (IVR), cannot be secured.

Digital PIN Issuance Advantages

An ecologically responsible alternative to sending PINs over the mail

Financial services and payment providers make up over 3% of an individual’s carbon footprint.

Besides lowering operational costs, converting mailers from paper to digital will drastically help financial service providers reduce their carbon footprint, as well as promote their green image

BUT HOW?

New Technology: SafeNet ViewPIN+

Revolutionizing PIN Issuance the ONLY fully automated, secure web-based PIN issuance and management solution on the market that

delivers unprecedented cardholder satisfaction and costs savings by eliminating expensive, insecure and time-consuming paper based PIN

delivery to cardholders.

2008 Best Solution in Finance

2008 Best e-Transaction Solution finalist

What is SafeNet ViewPIN+?

A secure, web-based solution to:

Issue PINs to cardholders;

Remind cardholders of their PIN;

Have cardholders change their PIN.

From any web browser, PC-based or mobile phone based.

In essence, it is a secure credential delivery mechanism.

What is the Business Case?

Typical ViewPIN+ Deployment

ViewPIN+ Cardholder Experience

ViewPIN+ Cardholder Experience

ViewPIN+ Cardholder Experience

ViewPIN+ Cardholder Experience

Who can benefit?

Cost of Paper PIN Issuance

Category Size

Description # of Cards in Circulation

Actual Cost Per Year (US $)

Lost Revenue Per Year (US $)

Top 10 Card Issuers

Worldwide Banks and Retailers

1,000,000 + $ 3,560,000 $ 2,394,000

Midsize Card Issuer

Regional Banks and Midsize Retailers

100,000-1,000,000

$ 1,780,000 $ 1,197,000

Small Card Issuer

Local and Community Banks

Under 100,000

$ 178,000 $ 199,000

ROI of Digital PIN Issuance

Category Size Description # of Cards in Circulation

5 Year Average Net Present Value (US $)

Top 10 Card Issuers

Worldwide Banks and Retailers

1,000,000 + $ 18,700,000

Midsize Card Issuer

Regional Banks and Midsize Retailers

100,000-1,000,000

$ 7,100,000

Small Card Issuer Local and Community Banks

Under 100,000 $ 571,000

Egg Case Study

Egg Bank selects SafeNet

Challenge The world’s largest online bank. Wanted to send PINs efficiently, securely, and in a manner

to improve the overall cardholder experience Needed a way to allow cardholders to securely obtain pins

over the Internet Traditional paper-based system was costly and posed risk

Solution SafeNet ViewPIN+ for secure PIN issuance, which is

secured by SafeNet Luna SP Hardware Security Module (HSM)

Benefits Quick implementation that improved cardholder experience

and provided Egg with a major competitive advantage Improved profitability by reducing postage and PIN mailer

expenditures, as well as cardholders were able to use their cards for purchases quicker

Secure PIN issuance solutions reduced the occurrence of credit card fraud from stolen PIN mailers

“Roll out of the Chip and PIN project has proven extremely beneficial to Egg, offering us a secure alternative to PIN mailers which is both cost effective and cardholder friendly,” Egg’s Lead Security Architect Stuart Horler

Thank You!