Who’s on the other end of your digital transaction?

John SculleyChairman of the Board, IdenTrust

Building Trust Into the Supply ChainMarch 20, 2006

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Why standards are increasingly critical

Existing and impending regulatory requirementsSarbanes Oxley (SARBOX)AML (Anti-money laundering)SEPAMIFIDPrivacy laws

The proliferation of overlapping and/or competing standards

Geography or product specificContinued activity and focus around industry-specific standards variants

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Corporations and Banks need teamwork

Corporations are ready to move toward more consistent standards

But they are not certain that their banks are ready to support them

Banks are also ready to moveBut have not been asked to do so by their corporate clients

Both groups agree that their biggest challenges are internal –Getting the required staff, resources and attention

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Disruptive change is often the catalyst for a shift in strategic focus – changing the game

Game Changers

Apple1980’s

Innovation

Dell1990’s

Standards

versus

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The shift in strategic focus will drive standards on to a predictable path

FirstCuriosity

SecondUseful

ThirdUbiquitous

Time

The Adoption Curve

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VS

Defining the Right Problem

Pepsi market researchPlastic bottle developmentUPC, DPP, bar codeStandardized merchandizingFood chains, mass merchandizing and drug chains

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1990’sidentity

proprietary driven

2000’sidentity

standards driven

Creating new sigma curves...

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Re-invention of work

Assumptions:Commoditization of almost everythingDecentralized approvals and decisionsVirtual organizations and ubiquitous broadbandProductivity driven by project teams and real time communications

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Business problem - verified connections

Business is conducted through people and companies without a personal connection

Need to verify and authenticate the participants and sites involved

Global interoperability requires a standardized way to verify connections

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The unknown is painful

Lack of interoperability limits anticipation and global fraud tracking

Result:Fraudulent account openings and closings

Phishing, pharming and corporate payment fraud

Fraudulent public sector procurements

Unqualified and unauthorized resources

Information exchange hampers trapping criminals

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How painful is it?

Estimates of corporate fraud start at $1.2 billion in the US alone (Gartner 2003)

After 10 years, STP still means straight to printer

Fraudulently opened corporate accounts and lack of audited provisioning restrict expansion of e-commerce

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No silver bullet

There is no single answer for all identity needs

Collaboration is key to success and requires globally interoperable standards

No Single Solution Provider Solves No Single Solution Provider Solves the Entire Endthe Entire End--toto--End ProblemEnd Problem……It Takes A VillageIt Takes A Village

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A standardized approach to account opening and management is a first step

The TWIST bank mandate working group proof of concept brings true interoperability to the new account opening process

Globally accepted identities, issued and authenticated by the banks, will simplify account opening and maintenance globally

Identity secured cross border payments generated from an authenticated account secures the integrated financial and logistical supply chains

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Business needs a “Trust Village”

Global & Domestic Financial

Transactions

Global & DomesticDefence & SecurityRelated Warnings &

Information

Medical InformationExchanged Globally & Domestically

Global SupplyChain Data &

DocumentationPharmaceutical Information &

Warnings

Authenticated Communications

Legal InteroperabilityLegal Interoperability

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Comprehensive Identity Management Requires a Spectrum of Trust

Increased Level of Trust

Incr

ease

d So

phis

ticat

ion

Incr

ease

d So

phis

ticat

ion

IdentityControlIdentityControl

OperationalImprovementOperational

Improvement

EncryptionEncryption

RiskManagement

RiskManagement

ComplianceCompliance

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Truly securing payments cross border varies across four key ingredients

NoneNoneGloballyGlobally

ConsistentConsistent& Regulated& Regulated

VettingVetting

StorageStorageSW OnlySW Only HW OnlyHW Only

Validation & UseValidation & UseBatched OfflineBatched OfflineWeb LogonWeb Logon

Real Time OnlineReal Time OnlineDigital SignatureDigital Signature

Reliance & RepudiationReliance & RepudiationNoneNoneLegally Binding Legally Binding

& Global& GlobalNonNon--RepudiationRepudiation

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Trusted identities: key ingredients

StorageStorage

Validation& Use

Validation& Use

VettingVetting

Reliance &RepudiationReliance &

Repudiation

Standardized, globally interoperable, secure supply chains musthave:

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IdenTrust - global, interoperable, bank-endorsed identity blueprint…

Secure data centersConsistent manufacturing processEfficiency

OperationalOperationalOperationalOperational

Highest levels of technical securityIdentities all work the same wayCompliant with industry standards TechnicalTechnicalTechnical

Global contractual frameworkContracted liability modelDispute resolution

LegalLegalLegalPolicyPolicyPolicyPolicy

KYC consistencyFATF complianceInteroperability across financial entities

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IdenTrust extends current market’s approach to Trusted Identities

Increasing Complexity

Incr

easi

ng R

isk

Incr

easi

ng R

isk

IdenTrustIdenTrust

“Transaction Control”• High on encryption, confidentiality• High on identity quality, authenticationCurrent Market

“Session Control”• High on encryption, confidentiality• Low on identity quality, authentication

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IdenTrust provides standardized Trusted Transactions like Visa/MC

Card Issuer Card Authorization

Card Holder Merchant

TrustedTransactions

Powered by Credit Card Associations,e.g. VISA, Mastercard, etc.

Third-Party Provider that operates the network, establishes standard, and ensures complianceThird-Party Provider that operates the network, establishes standard, and ensures compliance

Certificate Issuer

Certificate Issuer

CertificateValidationCertificateValidation

Certificate Holder

Certificate Holder Relying PartyRelying Party

TrustedIdentities

Powered by

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Conclusions

Trusted Identities are mandatory for opening new accounts and making payments globally

Vetting, Validation and Use, Storage, Reliance and Repudiation are key to Trust the supply chain

There is no single solution to identity management

IdenTrust and its partners provide a comprehensive approach

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