Executive Summary

1. Company Overview

Authentication and Communication Channel Security are posing a serious threat to conducting financialtransactions over the Internet. The solutions currently available only solve part of the problem or haveunrealistic deployment strategies. These solutions either focus on the authentication or thecommunication channel security but they do not tie them together. This creates an easy opportunity forsecurity breaches like Phishing and Man in the middle attacks.KeyID has developed a patent pending solution to this problem by integrating authentication with theunderlying communication channel information. This solution has a realistic deployment strategy by notrequiring significant changes to the current processes and strategies of the financial institutions. Theminimal infrastructure investment and low maintenance costs make the solution very attractive to theseinstitutions.

2. Market Overview and Opportunity

Cyber-crime has become a US$105 billion business that now surpasses the value of the illegal drug tradeworldwide.

Banks alone are losing over $8 billion in profit per year because of customer’s lack of

confidence in online security. 41% of the customers would change banks if their institution wascompromised by data breach. The recent highly publicized breaches at TJX, Ameritrade, Citigroup andBank of America had significant impact on these companies and caused real financial losses.

However, despite the significant costs and market “pain”, existing technical remedies are often a hassle

to setup and are quite ineffective. Many major banks have recently deployed an image basedauthentication solution from RSA to meet the FFIEC requirements. A study by MIT/Harvard showed a97% failure rate for this solution. Microsoft released Cardspace to solve this problem using a differentstrategy. This solution has unrealistic deployment strategy and it has not been accepted for any realworld applications.

Clearly, there is an immediate need in the market place for a solution that can provide true security that is easy to use and deploy.

This is the goal of KeyID

3. Target Markets and Customers

KeyID is initially targeting the financial industry. We have reached a tipping point where the veryexistence of segments like online brokerages is at stake unless significant enhancements are made inonline security.The company is currently in very early stages of negotiations for securing pilot projects with some majorbanks like Citibank. The company is also exploring the opportunity through MasterCard the potential of integrating the software with PayPass contactless card. KeyID is also working with American BankersAssociation to introduce the product to its member banks.The subsequent target markets would be Health Insurance industry and DRM. Secure authentication willbe a key s

uccess factor for realization of federal government’s goals for Electronic Medical Records. The