Next-Generation of Security Technology

1. Next-Generation of Security Technology Edward M. Cheng, M.D. Ph.D. ABFP CMO, VP Bus. Dev., HealthHighway Consultant Biometrics application in e-Biz edcheng@secugen.com Steve Hong, Director, SW Appl., SecuGen steveh@secugen.com February 13, 2002

2. Contents of this Seminar • Update Current Status of Network Security • Review Existing Security Technology • Introduction and Relevance of Biometrics • Types of Biometrics and Market Trend • Potential Biometrics applications • Fingerprint Biometrics in Internet application in e-Business

3. What Consist of a Secure Network? • Person-to-Person authentication • User identification • Data integrity • Data confidentiality • Privacy protection • Non-repudiation • User and process management SW

4. How Secure is our Network? • According to recent survey by CSI on 521 security executives: >32% has experienced incidents of serious electronic fraud- double in 3 years > 30% reported intrusion by outsiders >55% reported insiders unauthorized access >estimated: in-house security breaches account for 70-90% of all attacks on corporate network • Concern: financial, reputation, legal liability

5. How Serious is ID Theft? • 500,000-700,000 Social Security Recipients are victims of fake ID. - Social Security Adminstration in Baltimore • Online Credit Card Fraud: $24M/day: $9B/year - Meridien Research Jan. 2002 • Online Consumers Survey: 1 in 12 are victimized • Total cost in ID Fraud: 1.13% of all Online Transactions or $tens of billion yearly. - Gartner Jan. 2002

6. Passwords and Locks are Inadequate • The GAO report found weaknesses at nearly every point of computer security controls at the Treasury Department’s FMS (Financial Management Service). • Government computers that handle $trillion in tax refunds and SS benefits are vulnerable to cyber-attacks. • Billions of dollars of payments and collections are at significant risk of loss or fraud, sensitive data are at risk of inappropriate disclosure, and critical computer-based operations are vulnerable to serious disruption. • The GAO recommended FMS to install a security management program and to fix individual weaknesses- identified as access control, such as passwords and locks. - CNN Government Reuters, Feb.5, 2002

7. Existing Security Technology • PKI / Encryption / SSL • Firewall • Digital Certificate • Password and PIN • Token • Smart Card • Biometrics

8. Passwords Frustration • Must be a mixture of alpha-numeric with upper and lower cases • Must be random and not easy to figure out • Should not be written down or posted on monitor • Must be changed regularly • Password should not be recycled within 5 months • Transfer factor- Passwords get passed around

9. Cost of maintaining passwords • About 50% of calls in IT help desks are password related • Estimated cost per employee per year: • $200 by Forrester Research Inc. (Economics of Security, 2/98) • $340 by Gartner Group • Bottom line: A single biometrics can replace multiple applications’ passwords

10. What is Biometrics ? • Definition: Measurement of body’s unique characteristics or behavior • Types: Voice, Signature, Facial, Palm, Eye, Fingerprint • System components: • HW -sensor • SW -algorithm, API • Middleware and application

11. Why Biometrics ? • Unique • Authentication: 1-to-1 matching • Identification: 1-to-M matching • Convenient • Non-repudiable • Fast, accurate, non-transferable • Nothing to remember and nothing to forget

12. How is Biometrics Performance Rated? • FTE Vs FRR Vs FAR • Reliability • Speed • Ergonomic • Intrusiveness • Convenience • Acceptance

13. Biometrics Acceptance • Historically slow • Privacy concern • Unreliable • Expensive • Difficult to integrate • Negligence • Post September 11 • demand and acceptance: increased by 3-4 folds

14. Change in Acceptance of Biometrics • Estimate: ID theft in U.S. is about 500,000 cases/year • Consumers are ready to accept biometrics at the cost of decreased privacy and more intrusive method of identification • Consumers’ fears and losses due to fraud give strong incentives for institutions to invest heavily in biometrics as alternative to PIN • Financial institutions are considering biometrics: ING Direct, American Banker Association, Credit Union of Canada, Deutsche Bank, Citibank Meridien Research Inc. • Financial Service will spend $1.8B annually on biometric technology by 2004 IDC, Framingham, MA

15. “Biometrics is a Good Fit with Banking” “The Technology offers security to customers at ATM, within branches to authorize transactions and for online banking. It can also be used inside companies to secure vaults and monitor access to doors and computer systems. Meridien Research Inc.

16. Market Trend - 1 Total Biometric Revenue 1999-2005 ($M) 2000 1905.4 1750 1500 1440.6 1250 1000 1049.6 750 729.1 500 523.9 399.4 250 250.9 0 1999 2000 2001 2002 2003 2004 2005 Biometric Market Report 1999-2005 International Biometric Group – 2001

17. Market Trend- 2 Fingerprint Market Revenue 2000-2005 ($M) 500 450 453.3 400 373.9 350 300 266.6 250 200 167.0 150 100 99.4 50 57.2 0 2000 2001 2002 2003 2004 2005 Fingerprint Market Report 2000-2005 International Biometric Group – 2001

18. Market Trend - 3 Biometric Market Report 1999-2005 International Biometric Group – 2001 • Fingerprint and Middleware market will lead biometrics market in future • Projected Revenue of Fingerprint and Middleware will occupy 40% of Total Market at 2005

19. Signature-Scan 3% Voice-Scan Iris-Scan 4% 6% Facial-Scan 15% Finger-Scan 49% Hand-Scan 11% Middleware 12% Dynamic Growth in Finger-Scan Biometrics Market Share by Technology, 2001 (Excludes AFIS Revenues) Worldwide Finger-Scan Biometrics Technology Revenues ($ Millons) Source: Frost & Sullivan, 2001

20. Privacy Concern:Minutiae Extraction Fingerprints cannot be reproduced from minutiae template

21. Areas of Biometrics Application • Physical access control • Data access security • Time and attendance • ID theft prevention • Privacy protection • Fraud reduction • Cost-effective and high security

22. Types of Fingerprint Sensor • Semiconductor • Capacitive • Thermal • RF • Optical • Traditional • SEIR • Thin Film Technology

23. Semiconductor Sensors

24. Semiconductor FP Sensor • Small and low profile • Cost - expensive at low volume and large sensing area • Physical and electrical Unstable • Vulnerable to EDS • Metal discharge pathway • Surface coating required • Low tolerance to abuse

25. Types of Fingerprint Sensor • Semiconductor • Capacitive • Thermal • RF • Optical • Traditional • SEIR • Thin Film Technology

26. Traditional Optical Sensor

27. Traditional Optical FP Sensor • Plastic platen with soft coating • Nonlinear distortion • Low contrast image • Stray light interference • High power consumption • Assembly required mirror for compensation • Integration relatively difficult • Production- labor intensive

28. Types of Fingerprint Sensor • Semiconductor • Capacitive • Thermal • RF • Optical • Traditional • SEIR • Thin Film Technology

29. New Generation Optical FP Sensors • SEIR: Surface Enhanced Irregular Reflection- a break through optical finger-scanning technology • High contrast and virtually distortion-free image • High performance for extreme skin condition • Scratch-proof surface with robust and compact housing • Low power consumption • Integration relatively easy • Mass production capable at low cost

30. EyeD MouseTM • Award-winning world’s first biometric mouse • Most ergonomic & durable fingerprint sensor • State-of-the-art fingerprint matching algorithm • Matching software: SecuDesktop, SecuIBAS (Features: logon, File En/Decryption, Screen Saver)

31. SecuGen PC Peripherals

32. How to Select a Fingerprint Biometrics? • User friendliness • Durability • Cost • Size • Ease of integration • Choice of application products • Third-party SW support

33. Stand-alone Finger-Scan Module • Building Access Control • Time & Attendance • Vehicle Control • Door-lock System • Point of Sale • Safe and Gun control Box • Supported protocols: Wiegand, RS232 and RS485

34. Financial Sector Computer Security Telecommunication Point of Sale ATM Online Banking Access Control Network Security e-Commerce Mobile Phone Call Center Internet Phone Immigration Medical Facility and Attendance Passport Control Border Control Medical Records Mgt HIPAA Compliance Door Lock Time-Attendance Public Sector Social Service Aviation & Travel National ID Correctional Facility AFIS DMV Social Security Welfare Payment Missing Child Access Control Ticket-less Travel Anti-terrorist security Biometrics Overview Biometrics Applications

36. Electronic Medical Records • Automatic encounter documentation • Electronic transaction processing • Online PDA easy data entry • Work flow management • Transcriptions • Patients • Website Access • Clinical and Account Info • Appointments and Messages • Personalized Health Info • Financial Management • Charge capture at the point of encounter • Claims processing and billing • Accounts Receivable • Eligibility & Authorizations • Managed Care • Health Plans/IPA • Claims, Eligibility, Authorization, • Formulary, Regulations, Contracts, • Connectivity Biometrics for Healthcare Provider’s Automated Office

37. Biometrics Application • Physical Access Control • Time and Attendance • PC/Enterprise/Network Security • Internet & e-Commerce • B2B Transactions • Financial: on-line banking, ATM • Medical information system • Distant Learning • e-Publishing • Smart card/Digital Certificate • Any password-based application

38. Distant Learning • Physical Access Control • Time and Attendance • PC/Network Security/IT • Student registration/verification • On-line testing

39. Healthcare • Physical Access Control • Time and Attendance • PC/Network Security/IT • Patient registration and Identification • e-Claim processing • EMR • Document Management • HIPAA Compliance • Privacy Protection

40. Benefits of Biometrics Implementation • Maximize network security • Ensure users’ privacy • Protect institution physical assets • Provide user authentication • Allow non-repudiable transaction • Deter hackers and ID fraud • Eliminate password frustration • Cut IT cost in password maintenance • Increase corporation image, productivity and profitability

41. SecuIBAS Server Configuration CORPORATE HEADQUARTERS Mobile & Remote Warriors PSTN / ISDN / ADSL Customers University Bank Trading Hospital INTERNET PSTN / ISDN / ADSL Home Worker Firewall Groupware Web Server SNA Leased Line Branch Office Supply Chain or Factory

42. SecuGen Biometric Authentication • SecuIBAS Web Server Software • Takes only one day to integrate into your system. • Supports various operating systems and databases. • Windows 2000/NT • Solaris • Linux • Unix

43. SecuGen Biometric Authentication • SecuIBAS Server Software • Takes only one day to install. • Supports various operating systems and databases. • Windows 2000/NT • Solaris • Linux • Unix

44. SecuGen Biometric Authentication • SecuIBAS Client Pack • USB plug & play mouse or other sensor • Windows device driver • Supports Internet Explorer & Netscape

45. EyeD MouseTM • Award-winning world’s first biometric mouse • Most ergonomic & durable fingerprint sensor • State-of-the-art fingerprint matching algorithm • Matching software : SecuDesktop, iBAS (logon, File En/Decryption, Screen Saver)