Photos: Inside BT's world of innovation

BT is also working closely with the financial sector to combat card fraud. The banks are currently developing low-cost mobile chip-and-PIN readers for their customers to use at home, with Barclays likely to lead the charge in 2007. BT is bidding to supply authentication for these services.

The user simply sticks his or her card into the reader, which displays a randomly-generated code for logging into an online banking site.

Costs are kept low in such systems by having an identical series of codes on both the bank’s servers and the card’s chip. All the intelligence is on the card, so the reader itself costs less than £5 to produce. For extra security, a new code is required for every transaction.