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Press Releases

January 20, 2003

48% OF BANKS ACROSS EMEA STILL AT PLANNING STAGE FOR EMV MIGRATION DESPITE ONLY YEARS TO COMPLIANCE DEADLINE

Finextra Research report - investigating banks' readiness for EMV compliance - finds the industry aware of its importance, but confused about the implications

London, UK, 20 January 2003 - According to a survey published today by Finextra Research, a specialist provider of financial technology news, analysis and research, almost 90% of financial institutions in EMEA expect their EMV (Europay, Mastercard and Visa) smart card implementation projects to be live by the 2005 compliance deadline. Yet 48% of respondents have not progressed further than the initial planning stage for migrating their ATM networks to EMV.

The introduction of EMV chip card technology represents the largest change to ATM and Point of Sale (POS) technology and networks in the past 20 years. Every bank will need to update the technology throughout its ATM and POS networks to ensure interoperability between chip or 'smart' cards and terminals worldwide. Considering the scale of change ahead for many banks, preparations for such a huge technology shift should be at the top of the agenda according to Martin Macmillan, CEO of Level Four Software, sponsors of the Finextra Research report.

"This research proves that with only two years to go to deadline, many banks still do not understand the complexity of EMV. Close to 40% of respondents cited lack of information as one of the main hurdles to achieving compliance, with a further 40% identifying a lack of technical skills and knowledge." He continues: "In discussions with top European banks we have certainly found this to be true. EMV is a complicated subject, many financial institutions are looking for advice as well as appropriate tools to help them achieve the deadline."

It is well documented that fraud is the main driver for implementing EMV in the UK, with credit and debit card fraud alone reaching nearly £430 million in 2002*. Other countries in EMEA do not have the same fraud issues as the UK, and the report highlights the potential of multi-application smart cards as the key driver for countries outside the UK. A summary of other key findings include:
· Over 80% of financial institutions rate EMV compliance as an ongoing or high priority.
· Over 75% of respondents feel that the majority of cost benefits following EMV migration will come from reduced fraud.
· Over 70% of respondents anticipate offering loyalty programmes via multi-application smart cards. Other popular applications include e-wallets, mobile phone top ups and payment of utility bills.
· 75% of financial institutions believe that the greatest EMV project related delay is due to host systems not being ready to process transactions.
· Over 30% of respondents claim there is a lack of suitable products in the marketplace for migration to EMV.

Many aspects of a bank's technology will need to be upgraded to meet requirements for EMV, including ATM and POS hardware and software and the technology that integrates banking processes and host switch companies. The complexity of EMV chip technology compared to the traditional magnetic strip, means a much greater degree of end-to-end testing is required to ensure all the technology works effectively from day one.

"The potential for smart cards is huge. The greatest challenge for banks it to ensure that the introduction of this new technology does not have any adverse effects on customer relations. A thorough customer education programme should be part of EMV preparation plan," comments Macmillan. "Most importantly, banks need to be 100 percent sure that their systems are ready. They cannot afford a situation where consumers test the technology after the deadline. In today's competitive and media-fuelled society, the embarrassment factor would be huge. There is no second chance, they must get it right the first time."

If you would like a copy of the full report, "The smart card revolution - is the market ready for EMV?" by Finextra Research; please contact Jenny Taylor on 020 7959 5526 or e-mail jenny@write-image.co.uk. The report is also available at www.finextra.com/emv. Please feel free to include this in any articles you may be writing about the report.


About Finextra
Finextra Research provides an independent online resource - www.finextra.com - to serve the information needs of the financial technology community. It covers finance-specific innovations, services, solutions, applications and technologies. News from financial institutions and technology vendors worldwide is updated throughout the day. It is a single, dedicated resource for news, analysis and other information relating to the implementation of technology in the financial services industry.



Perfil de Level Four

La suite integrada BRIDGE de productos de software abierto ATM de Level Four ha sido desarrollada para dirigirse a las necesidades de usuarios de ATM que buscan maximizar su inversión en la cadena de ATM. BRIDGE se dirige a bancos y a usuarios de ATM que tienen, o desean tener, una red ATM moderna basada en el conjunto de la industria CEN/XFS estándar abierto. Como oferta realista, BRIDGE satisface las necesidades de los usuarios de ATM en las áreas de instalación, pruebas y monitorización así como la ejecución de software ATM.

Desde 1995, Level Four ha construido una considerable base global de clientes en banca y en el sector de medios de pago, incluyendo, The Royal Bank of Scotland, Lloyds TSB, National Bank of Dubai, Rabobank, LINK and Standard Bank of South Africa. La Sede de Level Four está en Dunfermline, y el resto de oficinas están en Maidenhead, Dubai y Charlotte NC.

Para mayor información, visiter: www.levelfour.com

Si desea más información, póngase en contacto con:

Martin Macmillan
Level Four Software Ltd
Tel: +44 (0) 1383 720 118
E-mail: martin@levelfour.com

Hotwire PR
Nicola Truman / Alexia Ward
+44 (0) 20 7608 2500
E-mail: levelfour@hotwirepr.com



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