Sunday, March 25, 2007

Giesecke & Devrient: In the business of secure transactions - From security paper to smartcards

There is a nice story that many management consulting firms use to explain the nature of their work and lure the starry-eyed graduates into the mothership. It goes somewhat along these lines...
"Once upon a time, Birmingham was the center of the drill manufacturing business. The people of Birmingham were confident they made the best drills in the world. They felt they did not have to worry about competition as their drills were so good. However, one day someone produced lasers and the people of Birmingham suddenly realized they were not in the drill business but rather in the business of making holes. They realized that if someone developed a better way of making holes the people of Birmingham who made drills would be in trouble."

Now, strategic shifts like this happen when a new technology emerges that completely rewrites the way something is done or made. Some companies identify the technology shifts and remake their themselves. But successful examples are few and far between.

An great example of success is Giesecke & Devrient (GnD as we call them).

I have been working on DB's corporate banking application for sometime. Last year, the project that I led involved (among other things) adding support for new types of smartcards to our application. The smartcards are used by the customers to digitally sign transactions. This digital signing is done to prove the user's identity and to approve a transaction. Our smartcard vendor is GnD. Being the inquisitive guy that I am, I did some Google research on this firm. What an eye-opener...

GnD was setup in 1852, and for a long long time, their business was to print banknotes and security paper. But in 1970's, GnD realized that they were not in the banknote printing business. Instead, they were in the business of secure transactions. They started an R&D arm to develop expertise in secure cashless transactions. Now GnD is a leading provider of smartcard solutions, enabling secure digital transactions.

Wow... To identify the paradigm shift to digital security in 1970. That's something. Consider that the public-key-cryptography concept that underpins digital security today was introduced only in 1976.

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