Follow-up of Prof. Honeyman’s lecture, by Galina Schwartz U of M Business School

1. Follow-up of Prof. Honeyman’s lecture, by Galina SchwartzU of M Business School My comments are in italics, and underlined . They are at the end of almost every Prof. Honeyman’s slide…

2. electronic payments — and —emerging technologies peter honeymancenter for information technology integration

3. problem statement • risk management • elevate trustworthiness of electronic payments to “card present” status • simple, practical, inexpensive • Sounds like real Finance?

4. emerging technologies • computing: moore’s law dictating faster and smaller computers at a constant price • smartcards are the ultimate mobile computer • communications • ubiquitous internet • wireless data communications • biometric identification Question: how to alter your fingerprints?

5. smartcards • tamper resistant • secure key storage and management • “personal cryptography assistant”

6. how can smartcards be applied? • secure identification • trust platform • to do: solve the infrastructure problem Is the infrastructure a big problem? Related question: How to make reverse engineering more difficult?

7. what is this? •  • a mobile phone? NO! • portable, disposable smartcard reader • solves the infrastructure problem

8. emerging communications technologies • gsm • europe now, n. america coming on line • europe: gprs, umts • japan: i-mode • cdpd • n. america now, will fade from the scene • n.a. telecoms don’t “get it” • wap • and other futile efforts to occupy this space

9. the convergence • pda + mobile phone + bluetooth + smartcard • offers opportunity for secure, authenticated payments Why Eurore is so advanced in cellular phones??? [catch-up] Supply and demand sides: Supply: technologically possible Demand: Is it really there?

10. biometrics • goal: personal identification • fingerprint • faceprint • retina or iris scan • voice recognition • questionable technical foundation to date • secrecy abounds Compare this reasoning with the reasons behind the disclosure requirements (still, see slide 12 : OPEN! is important) [pros and cons are both there]

11. biometrics? • revocation is difficult • fingerprints and other durable identifiers • spoofing is easy • fingerprint • voice recognition • compare to present biometric identification • signature on paper • demeanor of customer

12. multi-factor identification • combination of methods • secure crypto platform • biometrics, possibly more than one • can this offer risk management comparable to “card present” transaction? • maybe • “data collection yields to pattern recognition” -- m. mcluhan

13. promoting (and preventing) competition • the wap re-intermediators • wap must die • internet protocol will be the instrument of its death! • open systems • has huge advantages in risk management • gsm protocols • french bank card • aes (des replacement)

14. next steps • explosive growth in internet deployment application space will continue unabated • it will continue to accelerate! • this provides fertile ground for innovation, development, and deployment • Subject: MAKE MONEY FAST • €omputing + €ommuni€ation$ It is a great logo. Is not it? It is clear, elegant and greedy, but convinsing: exactly as the markets are!

15. thank you for your attention http://www.citi.umich.edu/

16. Relating technology to International Finance • Volatility – we expect to grow  UP. • Specifically, Financial Industry will be MORE risky business • Also: Telecoms: huge risks • Real risks will be very much dependant on regulations • Who `wins` is any scenario? • [Computer security specialists]