UK and Ireland – The Mismatched Pair

A Country Portrait

For years now, the economy of the United Kingdom has been growing steadily. Ireland, too, has developed into one of the EU's wealthiest countries following several years of strong growth. Together, this pair forms a market of 65 million inhabitants, which Giesecke & Devrient services via its London-based subsidiary G&D GB Ltd.

The United Kingdom’s development was and is defined by its global outlook. In the nineteenth century, the UK grew into the world’s leading naval, commercial and economic power. And today the UK’s role in international politics, global competition and worldwide trade remain among its most important challenges. Growth of the British economy has been moderate but steady over the last fifteen years. According to the UK Treasury, the nation’s gross domestic product (GDP) amounts to £1,320,611 million for fiscal 2006/7. This represents growth of 2.76% on the previous year. In January 2007, the unemployment rate was at 5.5 percent and the inflation rate (CPI) at 2.7 percent.

Ireland, on the other hand, previously a poor relation within the former EC, has now become one of the EU’s wealthiest nations. The small, open economy has been among those to reap the greatest benefits from globalization. In 2006, GDP rose six percent according to the German Foreign Office and further growth of 5.2 percent is anticipated for 2007. The unemployment rate is 4.2 percent (September 2006) and therefore the third-lowest in Europe. Purchasing power per capita is around 33 percent above the EU average (Germany: 8 percent above). Ireland is also known as the “Celtic Tiger” as a reflection of this strong economic growth.

London – international financial centre
Both the British and Irish economies are substantially influenced by the strong service sector. The financial sector, in particular, makes an above-average contribution to growth in the United Kingdom. As the British Chancellor of the Exchequer, Alistair Darling, was proud to emphasize in his speech to London Business School students in July 2007, “London has risen to the challenge of the global economy and has become the world’s leading financial centre.” As well as the London Stock Exchange, some of the UK’s most important banks are located in the capital, Barclays, Lloyds, the Royal Bank of Scotland Group and HSBC. Several hundred international banks also maintain branches in the City of London.

Banknotes: euros and pounds
Giesecke & Devrient has been active here since 1997 through its subsidiary Giesecke & Devrient GB Ltd. This was initially set up by the Banknote Processing division as a London-based sales and service branch for its customers in the United Kingdom, Ireland and the Netherlands. The company’s key accounts include the Royal Bank of Scotland Group, Group4Securicor, The Post Office, Halifax Bank of Scotland, HSBC and Loomis. The banknote processing market in North-West Europe has seen major changes over the past ten years. While Ireland (like the Netherlands) is now a member of the European Monetary Union and adopted the euro as legal tender in 2001, the United Kingdom retained its own currency, the pound sterling. However, this has not detracted from the UK’s monetary significance. Thanks to its transaction volume, the British pound remains one of the most important international currencies. The pound is also a frequently held reserve currency in Europe and the Commonwealth countries. Apart from The Bank of England – the central bank for England and Wales – various other banks in Scotland and Northern Ireland are also authorized to distribute banknotes in limited quantities. Describing the current market volume for the Processing division, Ian Dodd, Sales Director, Banknote Processing at G&D GB Ltd explains: “Approximately 2.2 billion banknotes are now in circulation in the United Kingdom. And each year around 650 million of these, so roughly a third, are identified as no longer fit for circulation by the commercial banks or their authorized CIT companies using state-of-the-art banknote testing devices. They are then removed and sent back to the central bank to be destroyed.”

G&D banknote identification systems are also used on British public transport. Cubic Transportation Systems Ltd., which operates ticket machines in the London subway system, uses the modern CashRay® 90 sensors. G&D GB Ltd. generated a total of around £6 million in Banknote Processing over the last year, employing a staff of 67.

Payment cards, SIM and more
At the end of 1999, Giesecke & Devrient GB Ltd. expanded its capacity in the UK and Ireland to cover the Cards and Services business unit. The focus was initially on the Payment division, with Telecommunications, Government Solutions and New Business gradually following. The benefits of the UK’s strong service and financial market also extend to the G&D subsidiary’s Cards and Services unit. Just under 400 commercial banks currently operate in the United Kingdom, with around 14,000 branches. Alongside this are 14,500 post office branches and ten cash-in-transit (CIT) companies with 100 branches. Around 60,000 card-operated automatic teller machines (ATMs) are currently in use. Payment cards equipped with a chip are widespread in the UK, offering state-of-the-art security. “EMV migration is well under way for payment cards in the UK,” reports Amanda Gourbault, Group Vice President, Cards and Services, Government Solutions and New Business at G&D GB Ltd. “Our migration status from magnetic to chip cards is almost at 100 percent. And with a market share of 20 percent, we belong to the top players here,” emphasizes Amanda.

The mobile telephony market has also been showing promising development. The four major GSM Operators in the UK are all part of larger, global groups. This, coupled with a penetration rate for mobile devices in the UK of around 120 percent makes the UK a very interesting market. Mobile phone games are particularly popular with the British, and data services such as mobile e-mail and traditional text messaging are also growing in importance. “G&D has a very strong position in the UK SIM market as we supply 3 out of the 4 major MNO’s”, says Amanda. “This means that we are very involved with our customers in the development of new and exciting technologies to help continue market and revenue growth for ourselves and our customers.“

In common with many other European countries, the UK and Ireland have initiated e-Passport roll-outs. They are also actively reviewing the roll-out of nationwide government identity schemes. With New Business and Government Solutions, G&D GB Ltd. is increasing its focus on innovative opportunities in the UK and Ireland, harnessing its comprehensive security expertise. The company is expanding established technologies and applications, adding new methods to secure access to digital content and developing security-related applications for mobile devices.

Related links


HM Treasury (UK economics and finance ministry)
www.hm-treasury.gov.uk/

UK current affairs
http://www.ft.com/home/uk

Department of Enterprise, Trade and Employment (Ireland)
http://www.entemp.ie/

Central Statistics Office Ireland
http://www.cso.ie/statistics/imfsummaryire.htm

GfK GeoMarketing – Irish market data (German)
http://www.gfk-geomarketing.de/marktdaten/marktdaten_irland.php

For further information please contact:

Sabine Hornberger
Chief editor e-media