This article, from today's WSJ, doesn't mention CKFR, but does seem to show that online banking's appeal is indeed worldwide and in fact seems to be maturing in Sweden, at least. Perhaps CKFR should be more aggressive overseas?
Internet-Security Firms Are Thriving in Sweden
By ALMAR LATOUR
Staff Reporter of THE WALL STREET JOURNAL
STOCKHOLM -- Would you get fingerprinted to check your bank statement?
If you're in Sweden, you might.
As the number of Internet users in Sweden grows rapidly, companies are developing a variety of security solutions for banking and commerce on the Web.
Swedish banks aggressively encourage their clients to conduct their banking transactions at home, and Swedish government institutions are pushing citizens to fill out forms on their home personal computers.
Such sensitive transactions require security, and the Swedes like to regulate and organize Internet matters, and security issues, in great detail. Swedish banks have tried to develop a common standard for Internet transactions, while lawmakers are discussing the legalities of "digital signatures" -- an issue that's also being discussed at the European Commission.
Sweden's highly organized society has traditionally relied heavily on an ID-card system. Whenever people want to sign a check or use a credit card, they have to show an additional official ID card that features their state number.
"It's natural for us to search for solutions to protect your identity on the Internet," said Ann-Marie Nilsson, president of Swedish IT Companies Organization in Stockholm, a group of 500 technology companies. "We use the Internet intensively and, culturally, we are used to showing our IDs with every minor transaction."
The country is on the cutting edge of Internet usage, with three million Swedes, or one-third of the country's population, regularly logging on to the Web. There's even a pilot program featuring a small focus group that will vote via the Internet in the Sept. 20 national elections.
One Company's Success
One company that is thriving as a result of Sweden's focus on Internet security is iD2 Technologies, a small Stockholm-based business that develops and sells technology to secure financial services on the Internet. iD2 has received more queries -- and orders -- than it can handle from governments to postal services to retail banks. The reason for all the attention? iD2, which was formed in April 1996, designed a system providing an extremely high level of identification security on the Internet.
The technology is called public key infrastructure and relies on so-called asymmetric encryption -- an identification system that features two digital keys: one that's kept in a public data bank and another that's kept on a user's personal ID card. For example, each time a consumer banking from home wants to execute a transaction, he inserts his card into a device the size of a computer mouse and punches in a personal identification number, or PIN. Then, the key in his card is matched with the card in the public data bank. If the security system finds the match, the user can access his account.
"The technology is hard to explain," said Bjorn Gustavsson, the 35-year-old president of iD2 and a veteran manager in the information-technology industry. "But its applications are generally easy to use."
In December last year, MeritaNordbanken, the largest retail bank in the Nordic region, launched an on-line banking system using iD2 technology for the system's identification security. MeritaNordbanken estimates it will have around 70,000 customers using its Internet system by the end of this year. And with some 5,000 more customers signing up every month, the bank saw good reason to invest more than 26 million kronor ($3.3 million) in Internet security this year alone.
"We need to take action to prevent the worst from happening," said Jari Nyholm, manager of IT security at MeritaNordbanken. "Throughout the world, the Swedes are perhaps the most frequent users of the Internet -- people here want it to be safe to do business there."
Currently owned by AU-Systems, a joint venture between Swedish phone company Telia AB and Telefon AB L.M. Ericsson, iD2 is now handling other ambitious projects. It is developing a national ID smart card for Finland's postal service and is creating security technology for Funai Electric Co. of Japan for a low-cost device that will provide Web services on television sets. "We are well-financed at the moment," said Mr. Gustavsson. "But if the industry growth continues, we might go public in the next two years."
High-Tech Fingerprints
Another company, Fingerprint Cards AB, is taking identification-security technology a step further. Based in Gothenburg, on Sweden's west coast, the company is developing technology that may one day replace bank-card codes and passwords with, well, fingerprints. Springing from a partially state-funded research project in the 1980s, the company recently developed a system that combines a sensor that reads fingerprints, software that identifies fingerprints and a microprocessor that matches fingerprint data.
With Fingerprint Cards' technology, instead of punching in numbers to access computer systems, users would carry an identity card about the size of a credit card that has a three-dimensional fingerprint digitally stored inside. To activate devices, or to access accounts, users would insert their card in a card-reading device. Then, the user places his finger on a reading device. A sensor reads the print and verifies it with the fingerprint stored inside the card.
The company has already grappled with some potentially grisly fraud scenarios. Fearing that some criminals might be motivated to slice off someone's finger in order to make use of the print, the company installed a sensor that would measure the user's body temperature and heart beat.
"You have to be alive to use the card," quips Lennart Carlson, Fingerprint Cards' managing director.
Investors seem to have faith in Fingerprint Cards. When the company went public in early May, it was oversubscribed 10 times and raised 60 million kronor. Meanwhile, the company is looking at a broad range of applications for the technology, involving any device that requires a PIN to be punched in before usage. Fingerprint Cards hopes to link its product to a large computer manufacturer in the U.S., but no deals have been signed yet.
Fingerprint Cards did ink a multimillion-dollar contract and licensing agreement with Swedish telephone maker Ericsson to jointly develop fingerprint security applications for communication devices. For Ericsson, security access is an important issue, because the company is scrambling to integrate mobile-phone technology with Internet devices. Such technology would allow people to use the Internet or e-mail via their mobile phones. A pilot program featuring mobile phones with fingerprint access will be launched next year, according to Fingerprint Cards. Still, the company continues to look for new clients in Sweden and abroad.
"We've had great interest so far," said Mr. Carlson. "People want advanced forms of security."
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