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Saturday, January 29, 2005 10:07:24 AM
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DAVOS, Switzerland (AFX) - Microsoft Corp founder Bill Gates said China has created a brand-new form of capitalism that benefits consumers more than anything has in the past
"It is a brand-new form of capitalism, and as a consumer its the best thing that ever happened," Gates told an informal meeting late Friday at the World Economic Forum here
He characterised the Chinese model in terms of "willingness to work hard and not having quite the same medical overhead or legal overhead"
Manufacturers have created "scale economies that are just phenomenal", in part owing to companies there and elsewhere on the planet designing good products, Gates said
Looking ahead, he added: "You know they haven't run out of labor yet, the portion that can come out of the agriculture sector" was still considerable
"It's not like Korea, Korea got to a point where, boom, the wages went up a lot," he said, adding "that's good, you know, they got rich and now they have to add value at a different level
"They're closer to the United States in that sense than they are to where China is right now." Gates continued by heaping praise on the current generation of Chinese leaders
"They're smart," he said with emphasis
"They have this mericratic way of picking people for these government posts where you rotate into the university and really think about state allocation of resources and the welfare of the country and then you rotate back into some bureaucratic position." That rotation continued, Gates explained, and leaders were constantly subjected to various kinds of ratings
"This generation of leaders is so smart, so capable, from the top down, particularly from the top down," he concluded
wai/ns/scs For more information and to contact AFX: www.afxnews.com and www.afxpress.com
January 30, 2005 at 12:53 PM in World Affairs | Permalink | TrackBack (9) | Top of page | Blog Home
Finextra: Finexpo speakers talk up data management and compliance
Data management and compliance have emerged as key pain points for financial market participants attending this year's Finexpo City Technology Strategies event in London.
Speakers from Accenture, Dresdner Kleinwort Wasserstein, Credit Suisse First Boston, HSBC and Baring Asset Management drew large numbers of delegates as they recounted their own experiences and strategies for dealing with data compliance issues.
Stephen Ashton, director, global IT business mangement at DrKW estimates that 10-15% of the firm's headcount are involved in compliance-related work. This equates to a substantial cost burden, he points out, and one that is not likely to level out for at least another one to two years in an unstable and developing regulatory environment.
On top of that, a silo-based approach to retaining and managing the data required to prove compliance and deliver workable business solutions has created an "IT monster", he says, which offers "tons of information but little knowledge".
DrKW has been working with Tideway Systems to develop a control management system designed to bring transparency to the bank's global IT environment, identify interdependencies and remove the costs associated with manually maintaining multiple configuration management systems.
The aim of the project, says Ashton, is "to get the human beings out of the system and let the tools do the work".
The level of manual intervention in data management was an issue raised by Chris Swan, a VP at Credit Suisse First Boston, in another standing-room only presentation on the use of service oriented architectures and grid technologies. He pointed out that the investment banking industry had successfully introduced automation to move the clerks and paper shufflers out of the back office, only to see it repopulated by IT people doing manual processes. "Now we have to automate the automation," he says.
Getting management buy in from the business units for reference data projects was identified by all Finexpo speakers as a critical issue.
Mark Connolley, a senior manager at Accenture, says banks need to institute coherent enterprise data governance and ownership frameworks. "The CIO has to sit at the table and own and enforce the standards," he notes.
Rob Knight, global head of operational compliance at Baring Asset Management, emphasises the responsibilities of all users of reference data - from front office sales people to clients - in maintaining standards.
She cautions: "Without buy in you end up with a lot of money spent and an expensive white elephant."
January 28, 2005 at 07:26 AM in Financial Services | Permalink | TrackBack (3) | Top of page | Blog Home
Finextra: Risk rises up the agenda, but IT issues remain a challenge
Four out of five major financial firms now have a chief risk officer, but the quest for enterprise risk management remains an elusive goal, according to a global industry survey conducted by Deloitte.
The number of large institutions with chief risk officers has increased from 65% to 81% since the last survey was conducted in 2002. Three quarters of CROs in financial services firms report to their chief executive or the board of directors, says Deloitte, in accordance with a 25% increase in board-level oversight of risk management over the last two years.
Despite the increasing emphasis on containing risk, the research indicates that enterprise risk management (ERM) continues to be an elusive goal for many institutions. In fact, less than one-quarter of survey participants say they are able to integrate risk across any of the major dimensions of risk type, business unit, or geography.
While 38% of respondents claim to have the right organisational structure in place to cope with the demands of global risk management, only 15-16% report progress in integrating methodology, data, and systems.
While information technology is considered to be the key enabler of risk management architecture, respondents report a host of continuing challenges in developing adequate risk systems. More than half (52%) cite a lack of integration among systems as a major concern and 42% cite it as a minor concern. Lack of flexibility and scalability as well as performance issues are also noted as key challenges.
In the emerging operational risk discipline, lack of functionality was deemed a key problem.
Improving regulatory related systems capabilities and implementing operational risk management and advanced credit risk systems were the three highest priority items cited by respondents in the systems development and technology area.
January 27, 2005 at 07:07 AM in Financial Services | Permalink | TrackBack (9) | Top of page | Blog Home
Finextra: IT budgets up as firms wilt under compliance burden
Finextra's annual Financial Technology Strategies report finds financial market firms preparing to raise IT budgets in an effort to boost operational efficiencies and comply with regulatory demands for increased information.
The survey of a broad cross-section of 92 financial markets participants, finds IT budgets and staff recruitment on the rise for the second successive year. But a shared sense of optimism is tempered by a hard-edged determination to see a measurable return on investment, implying a continued tough market for the fintech vendor community.
The sheer weight of the compliance burden and the systems integration challenge it entails has put a reality check on the ambitions of institutions responding to this year's survey. In 2004, 60% of organisations considered regulations an extension of existing systems and process. This year, only 46% agree with the same statement.
Fewer capital markets firms see an opportunity to use compliance to create internal value, down from 45% last year to 36% in 2005. Only 29% believe they can create any external value from regulations, down 10% over the last twelve months. Indeed, more respondents than ever before now view regulations as an administrative overhead with minimal benefit to their organisation.
The biggest pure IT change over the last twelve months has been the growing support for Linux within wholesale finance organisations, from 27% in 2004 to 58% in 2005.
"Regulatory compliance and risk management are at the forefront, but the pressure for IT to deliver measurable business returns is also growing," says Paul Penrose, head of research at Finextra. "Finding ways to meet regulatory demands for stricter compliance, while managing business expectations for an improved return on IT investment, will be the real challenge for CIOs in the year ahead."
The full report, Financial Technology Strategies 2005, is available to order online: Financial Technology Strategies 2005.
It will be released at Finextra's third annual Finexpo City Technology Strategies conference and exhibition, www.finexpo.com/cts/, taking place at Cabot Hall in the heart of London's docklands on Thursday 27 January.
January 27, 2005 at 07:06 AM in Financial Services | Permalink | TrackBack (3) | Top of page | Blog Home
Finextra: Rise in phishing as cyber crooks automate attacks
The number of active phishing Web sites more than doubled in October according to the Anti-Phishing Workgroup (APWG) as fraudsters switch to using automated tools to launch attacks.
According to the report, the number of bogus phishing sites rose from 543 sites in September to 1142 in October. The study also shows that between July and October, the number of scam sites grew by a monthly growth rate of 25%.
APWG says the sudden large spike in October may indicate that criminals are using automatic tools and botnets to launch phishing attacks. Furthermore, the research shows that the number of bogus sites hosted on compromised broadband PCs has risen to more than 50%.
In October, there were 6597 new, unique phishing e-mail messages reported to the APWG, over three times the number of unique reports received in August (2158).
Financial services continues to be the most targeted industry sector, with the most unique baiting sites in October, as well as the most targeted companies.
A separate study by Internet monitoring firm Envisional shows that phishing attacks against financial services companies rose a massive 568% between June and October this year. The research shows an increase in both the number of firms targeted and the volume of phishing spam. The average number of banks hit each day rose to five in October from 2.6 in June.
At a conference in London yesterday Det Chief Supt Ken Farrow, head of the City of London Police's economic crime department, told of how criminals came close to stealing £175m from a London-based bank last week. According to a report by the FT, Farrow said the robbery was prevented only by a "quirk" in the bank's internal systems.
January 25, 2005 at 08:21 AM in Phishing & identity theft | Permalink | TrackBack (14) | Top of page | Blog Home
Finextra: Banks remain top target for phishers
Instead of targeting online retailers in the run up to Christmas, phishers continued to focus on financial institutions as the most targeted sector for spam attacks in December, according to the latest stats released by the Anti-Phishing Working Group (APWG).
The research shows that 85% of spam scams detected during December were directly focused on financial services firms, an increase on the usual 70-80% of phishing attacks targeting the sector.
David Jevans, chairman, APWG, says: "It is interesting to note that the concentration on phishing attacks against financial institutions actually increased to a new high during a time when many were concerned that opportunistic phishers would spoof retail sites, using consumers urgency to keep their e-commerce accounts in order to complete their holiday shopping in time."
APWG says the number of reported hijacked brands grew to 55 in December. Out of the nine brands first reported in the month, eight were financial institutions.
Overall there were 9019 new, unique phishing e-mail messages reported to the APWG in December, a six per cent increase on November but an average monthly growth rate of 38% since July. December also saw a 10% jump in the number of active phishing sites, with 1707 reported in the month compared to 1546 in November.
January 25, 2005 at 08:20 AM in Phishing & identity theft | Permalink | TrackBack (7) | Top of page | Blog Home
VentureBlog: It's The End Of The Web As We Know It And I Feel Fine
By David Hornik on September 30, 2003 10:35 PM | Links In | Print | Comments (13) | TrackBack (11) | Categories: Conferences and Consumer Internet & Media and Internet Infrastructure
I'm at the RVC SoftEdge Conference, where I'll be speaking tomorrow. RVC is the former venture arm of Reuters and this is its technology conference. The discussion here is wide ranging but generally around the evolution of information technology.
January 24, 2005 at 12:57 PM in email | Permalink | TrackBack (24) | Top of page | Blog Home
TheStar.com - Rogers vs. Bell: Reliability the issue
TYLER HAMILTON
Come July 1, millions of cable customers throughout Ontario will have the option of getting home telephone service from Ted Rogers, the man most associated with cable and cellular phones.
Rogers, founder and chief executive of Rogers Communications Inc., is aiming for July 1 because it's the 20th-anniversary of Rogers Wireless and, well, it doesn't hurt that it's Canada Day — uncle Ted being a die-hard Canadian and Rogers' logo sporting the colours of our national flag.
It all stands in contrast to those faceless blue management types over at Bell Canada, who themselves are trying to muscle into Rogers' television business.
Assuming all goes as planned, and there are no promises that it will, people will be able to sign up for a telephone service that transmits our voices through a high-speed cable modem, onto Rogers' cable backbone and across Canada — sources say — through Allstream Corp.'s national network.
This phone-over-cable approach is similar at its most basic level to the Voice over Internet Protocol services offered by Vonage and Primus Canada. Where it's supposed to differ dramatically is on quality.
Rogers is promising eight hours worth of back-up power in case of outages, as well as 911 calling in the event of an emergency. And unlike services from Vonage or Primus, which are designed to piggyback high-speed access services they don't control, Rogers will be in solid control over the access points and network its telephone customers will rely on.
Shaw Cable, Videotron and Cogeco Cable have their own phone-over-cable plans. Shaw is expected to come to market with a service within a few weeks, beginning in Edmonton.
Will these cable companies be able to deliver the "carrier-grade" quality and reliability being promised?
It's easy to have doubts. The Star still gets emails — not so infrequently — from Rogers' high-speed customers whenever their service goes down. Earlier this month, a few hundred people scattered throughout Rogers' territory didn't have high-speed service for nearly an hour.
Not a major deal, but something that simply doesn't happen with Bell's local phone service.
"It's going to be interesting to see how they do voice over Internet protocol telephone if they can't keep the high speed up," wrote one reader.
Good point. Cast back to early 2001, when disruptions or slowdowns or outages on Rogers' high-speed network were so frequent they were hardly newsworthy. It became such an annoyance to customers that a $75 million class action lawsuit was filed, though it never went anywhere.
Many of those problems were rightly blamed on Rogers' relationship — and dependence — on Redwood City, Calif.-based At Home Corp., which remotely managed many of the services Rogers' customers relied on. Then-CEO John Tory, now Conservative leader for the province, eventually severed Rogers' alliance with At Home and spent more than $300 million reclaiming control over the service, with a focus on improving quality.
Much has changed, no doubt. At Home Corp. is dead. The outages and disruptions are much, much fewer. But they still crop up now and again, enough to raise concern over a future telephone service. Rarely does Bell's local service go down, and it's even less likely that it would happen to hundreds or thousands of people at the same time — ice storms the exception.
"It has to be 100 per cent reliable," says Kona Shio, a media and telecom analyst with Conscius Capital in Montreal. "If you're going against Vonage, it's another story, but if you're going against BCE, you have to offer a comparable service."
Can Rogers achieve the so-called "Five Nines" of telecom, meaning your service works 99.999 per cent of the time?
"They're going to have their challenges," said Iain Grant, managing director of the Seaboard Group, a telecom research firm and consultancy. He says there will be many growing pains for Rogers, and early adopters of the service could face frustrations.
Dermot O'Carroll, senior vice-president of network engineering and operations for Rogers Cable, is fully aware of the challenges and says a plan is in place to reach the Five Nines.
First, Rogers isn't going to run voice packets through the same channel as other high-speed data. Two different channels are being created, and the voice channel will be given priority. Subscribers to the phone-over-cable service — both new customers and existing high-speed subscribers — will be issued an upgraded modem to handle the channel division.
Under this setup, "You could have Internet outages for a wide variety of reasons, none of which would affect the telephone service," said O'Carroll.
This priority for voice also flows down to Rogers' backbone. Again, voice packets — that is, our voices broken down like a puzzle into different bits of data — are given higher priority than other types of data, such as requests for Web sites or email, which aren't as time-sensitive. This will prevent latency in conversations or jittery sounds.
Rogers is also adding redundancy to what it calls its CMTS, which stands for cable modem terminating system. This is a point in the network that communicates with a particular cluster of cable modems being used in a neighbourhood — usually there are about 500 per cluster. Consider it a kind of gateway or traffic cop, directing high-speed traffic onto and off of Rogers' larger backbone.
"That redundancy should eliminate the majority of outages," says O'Carroll. "We're also building redundancy on the backbone itself and right across the network, so we minimize the outages that would impact voice."
This is a reason why Rogers has committed to spending $200 million to bring such a service to market. Testing is supposed to begin in April.
"The phone companies have been doing it for 100 years," said Ted Rogers, when he first revealed snippets of his plan last February. "After our first hundred days I think we'll be in the same league."
The pressure is on. As Mr. Rogers must surely know, after the first 100 days the service could also be a public relations disaster capable of hurting the entire Rogers brand.
It's a major gamble, and while one could argue that going into wireless was a risky bet that paid off for the Rogers family, the difference here is that many view local phone service as essential — as a lifeline.
When a worried mother with a sick baby picks up the phone in the middle of the night to call TeleHealth, the damn thing better be working. In such situations, the fancy features promised by VoIP services won't matter. Neither will a credit on next month's bill.
January 24, 2005 at 08:12 AM in Telecommunications | Permalink | TrackBack (6) | Top of page | Blog Home
By Elizabeth Judge, Telecoms Correspondent
GOOGLE revolutionised the internet. Now it is hoping to do the same with our phones.
The company behind the US-based internet search engine looks set to launch a free telephone service that links users via a broadband internet connection using a headset and home computer.
The technology that will enable Google to move in on the market has been around for some time. Software by the London-based company, Skype, has been downloaded nearly 54 million times around the world but no large telecommunication firms have properly exploited it.
BT, which connects seven out of ten British households, has developed its own internet-telephone service. However, the telephone giant, which has the most to lose if the new technology takes off, has been reluctant to promote it heavily.
Julian Hewitt, senior partner at Ovum, a telecoms consultancy, said: “From a telecoms perspective there is a big appeal in the fact that Google is a search operation — and of course the Google brand is a huge draw.”
Mr Hewitt said that a Google telephone service could be made to link with the Google search engine, which already conducts half of all internet inquiries made around the world. A surfer looking for a clothes retailer could simply find the web site and click on the screen to speak to the shop.
The basic cost of making calls across the internet is almost nil. The real cost is in developing the software; after that, the service exploits available internet capacity. However, charging does become necessary to link internet calls with the traditional phone network.
In addition, the sound quality of calls across the internet can be poor and the connections can be less reliable.
A recent job advert by Google’s on its website calls for a “strategic negotiator” to help the company to provide a “global backbone network” — a high-capacity international infrastructure.
By investing in capacity, Google could circumvent the problems of quality and reliability and guarantee better service.
Although Google is reluctant to talk about its plans, the logical use of such a network would be to help to support a new telephone service. The company would buy capacity cheaply, by taking up slack capacity left behind when the internet bubble collapsed in 2001.
Around the world, thousands of miles of fibre-optic cable remain unused because the amount of speculative development vastly exceeded demand. Such capacity would be available at rock-bottom prices today.
Elsewhere in the world, using the internet to make phone calls has caught on more quickly. In Japan 10 per cent of households already use the so-called “voice over internet protocol” and an internet service offered by Softband has 4.4 million subscribers. Its growth has depressed revenues of the local telecom group, NTT.
In the US, a company called Vonage offers customers unlimited calls each month for as little as $24 (less than £13).
Big companies and multinationals that make huge numbers of long-distance calls are also increasingly switching to internet calls to try to slash their bills.
Google, which was founded in 1996, built its business from scratch by offering a fast, reliable and free internet search. It gradually transformed into a highly profitable company by offering commercial services, including sponsored web links.
Its most up-to-date figures show that, in the first nine months of 2004, Google made a profit of $195 million on revenues of $2.1 billion.
START OF THE BIG SEARCH
# Stanford University graduate students Sergey Brin and Larry Page began working on Google’s search-engine technology in 1996 when they were in their early twenties
# They tried to find a buyer for their work but were forced to set up their own company in 1998 because nobody was interested
# Two years later Google became the biggest search engine on the web
# Google was forced to go public during 2004, so that some of its founding investors could make a profit. The company raised $26 million; its initial market value at float was one thousand times greater
# The company’s motto is “Don’t Be Evil”
January 24, 2005 at 07:38 AM in Telecommunications | Permalink | TrackBack (6) | Top of page | Blog Home
Yahoo! News - Blogger Influence Raises Ethical Questions
By ANICK JESDANUN, AP Internet Writer
NEW YORK - When Jerome Armstrong began consulting for Howard Dean (news - web sites)'s presidential campaign, he thought the ethical thing to do was to suspend the Web journal where he opined on politics.
But to suggest others do the same with their journals, otherwise known as blogs? No way.
"If I'm getting paid by a client, I don't blog about it. That's my personal set of standards," Armstrong said. "I'm not going to hold anybody else to my personal standards. I'm not going to make that universal."
The growing influence of blogs such as his is raising questions about whether they are becoming a new form of journalism and in need of more formal ethical guidelines or codes of conduct.
According to the Pew Internet and American Life Project, 27 percent of adults who go online in the United States read blogs. And blogs have greater impact because their readers tend to be policy makers and other influencers of public opinion, media experts say.
So far, many bloggers resist any notion of ethical standards, saying individuals ought to decide what's right for them. After all, they say, blog topics range from trying to sway your presidential vote to simply talking about the day's lunch.
Blogging is more like a conversation, and "you can't develop a code of ethics for conversations," said David Weinberger, a prominent blogger and research fellow at Harvard's Berkman Center for Internet and Society. "A conversation with your best friend would become stilted and alienating."
Others, however, have pushed written guidelines.
Jonathan Dube, managing producer at MSNBC.com and publisher of CyberJournalist.net, modified the Society of Professional Journalists' code of ethics and urged fellow bloggers to adopt it. The principles: Be honest and fair. Minimize harm. Be accountable.
Longtime blogger Rebecca Blood circulated guidelines that call for disclosing any conflicts of interest, publicly correcting any misinformation and linking to any source materials referenced in postings.
"It seems pretty clear to me that having some kind of standard contributes to an individual blogger's own credibility," she said.
Yet Blood knows of fewer than 10 bloggers who have adopted her guidelines by linking to the document.
How bloggers handle matters of ethics and disclosure vary greatly.
While Armstrong suspended his blog, a partner in his political consulting firm, Markos Moulitsas Zuniga, kept his going and instead posted a disclosure about the payment. The Dean campaign had paid the pair $3,000 a month for technical consulting services.
Others saw no need to disclose at all. In South Dakota, blogger Jon Lauck said many people knew he was a paid consultant to John Thune's Senate campaign, but Lauck didn't believe he had to post any "flashing banner" on his site.
He said that unlike mainstream news organization, blogs like his never claim to be objective, and anyone reading a few posts would quickly know he was pro-Thune — with or without disclosure.
Beyond politics, marketers have turned to blogs as well.
A company called Marqui is paying about 20 bloggers $800 a month to write about the company and its products for managing marketing campaigns. Marqui says negative reviews are OK, and bloggers are permitted to disclose the payments.
Dr. Pepper/Seven Up Inc. took a similar tactic when it launched a new flavored milk drink called Raging Cow.
Many news organizations have formal guidelines separating editorial and business operations, and journalism schools and professional societies try to teach good practices.
Bloggers, though, tend to shudder at being called journalists, even as lines between the two blur.
When Apple Computer Inc. got court orders allowing it to subpoena bloggers for the identities of people who had leaked company secrets, two of the bloggers responded by claiming they were entitled to protect confidential sources the way traditional journalists do.
And in Cambridge, Mass., Friday and Saturday, a conference called "Blogging, Journalism and Credibility" explored the evolution of blogging and journalism and the influences of one on the other.
Many bloggers believe standards of practices are inevitable, even if they aren't something formalized in writing.
Zephyr Teachout, who was Dean's director of online organizing, likens it to crafting a constitution — not necessarily written as a formal code of conduct, but as a set of accepted norms.
"Do you do it through a code of ethics? Do you do it by just talking to a lot of people about it? I don't know," she said.
Teachout has been thinking about such issues for about a year, she said, and is "constantly changing my mind."
"Now, to some degree, bloggers are going through the same stages that professional journalism went through at the beginning of the 20th century," said Jay Rosen, a blogger and professor of journalism at New York University. That was when newspapers started becoming independent and severed ties with political parties.
In some sense, bloggers already have informally adopted norms that go beyond what traditional journalists do, Rosen said. For instance, bloggers who don't link to source materials aren't taken seriously, while traditional news organizations have no such policies.
Dan Gillmor, a former newspaper columnist now studying citizen-driven journalism through blogging, said bloggers who want an audience will voluntarily adopt principles of fairness, thoroughness, accuracy and transparency.
"No one's bound by these rules," Gillmor said, "but I think some norms will emerge for people who want to be taken seriously."
January 23, 2005 at 11:27 AM in Blogging & feeds | Permalink | TrackBack (15) | Top of page | Blog Home
Yahoo! News - Internet 'Phishing' Scams Getting More Devious
By Andy Sullivan
WASHINGTON (Reuters) - Internet "phishing" scams are becoming more difficult to detect as criminals develop new ways to trick consumers into revealing passwords, bank account numbers and other sensitive information, security experts say.
Scam artists posed as banks and other legitimate businesses in thousands of phishing attacks last year, sending out millions of "spam" e-mails with subject lines like "account update needed" that pointed to fraudulent Web sites.
These attacks now increasingly use worms and spyware to divert consumers to fraudulent sites without their knowledge, experts say.
"If you think of phishers initially as petty thieves, now they're more like an organized crime unit," said Paris Trudeau, senior product manager for Internet-security firm SurfControl.
Phishing attacks have reached 57 million U.S. adults and compromised at least 122 well-known brands so far, according to several estimates.
At the end of 2004 nearly half of these attacks contained some sort of spyware or other malicious code, Trudeau said.
One attack, first documented last month by the Danish security firm Secunia, misdirects Web surfers by modifying a little-known directory in Microsoft Windows machines called a host file. When an Internet user types a Web address into a browser, he is directed instead to a fraudulent site.
This technique has shown up in attacks spoofing several South American banks, said Scott Chasin, chief technical officer of the security firm MX Logic.
The convergence of all of these threats means "we can expect to see some large attacks in the near term," he said.
Another more ambitious attack targets the domain-name servers that serve as virtual telephone books, matching domain names with numerical addresses given to each computer on the Internet.
IDENTITY THIEVES
If one of those computers is compromised, Internet users who type in "www.bankofamerica.com" could be directed to a look-alike site run by identity thieves.
Domain-name servers are tougher to crack, as they are typically run by businesses rather than home users, but hackers can find a way in by posing as a company's tech-support department and asking new employees for their passwords, Trudeau said.
Domain-name hijacking is suspected in incidents involving Google.com, Amazon.com, eBay Germany and HSBC Bank of Brazil, Chasin said.
Even straightforward phishing attacks are getting more sophisticated. Spelling errors and mangled Web addresses made early scams easy to spot, but scam artists now commonly include legitimate-looking links within their Web addresses, said Kate Trower, associate product manager of protection software for EarthLink Inc.
Consumers who click on links like www.citibank.com in these messages are directed to a fraudulent Web address buried in the message's technical code, she said.
MasterCard International has caught at least 10 phishing scams involving www.mastercard.com over the past two months, said Sergio Pinon, senior vice president of security and risk services.
Consumers can protect themselves with software that screens out viruses, spyware and spam. But online businesses will have to take steps as well, perhaps by issuing customers a physical token containing a changing password, Chasin said.
Internet engineers should also figure out a way to authenticate Web addresses, much as they are currently figuring out how to make sure e-mail addresses are legitimate, he said.
January 20, 2005 at 09:47 PM in Financial Services | Permalink | TrackBack (2) | Top of page | Blog Home
Finextra: Wells Fargo launches integrated online banking and brokerage site
US bank Wells Fargo has launched a new integrated online banking and brokerage service.
The new online brokerage site features a mutual fund centre that includes Morningstar ratings along with comprehensive fund profiles and improved screening and comparison tools.
The site also provides customers with single sign-on access to banking and brokerage accounts. Customers can transfer funds between brokerage and banking accounts and configure their online overview page to display specific market data and account information.
Rachel Perkel of Wells Fargo Investments, says the new service provides customers with "access to an easy-to-use and seamlessly integrated site that links both banking and brokerage services".
Wells Fargo has also introduced a new online portal for use by financial consultants and private client advisors. The bank says the new portal enables multiple specialists and bankers to collaborate in servicing customers with complex money management and investment concerns.
To improve service for private clients, the bank implemented a service-oriented architecture (SOA) on the BEA WebLogic Platform which links all existing data sources and applications related to sales and customer support and delivers them to bank staff via a unified portal.
Financial consultants and private client advisors will now be able to access a record of client contact with other specialists, allowing them to provide more customised and integrated service and advice to clients with multiple account relationships.
The US bank has also developed an internal portal application that provides staff with a consolidated view of customers. The desktop is organised to mirror a customer's typical call, which streamlines processes and improves access to applications and information.
January 20, 2005 at 08:19 AM in Financial Services | Permalink | TrackBack (7) | Top of page | Blog Home
Finextra: First Data hires FleetBoston's Bakhshi to head new mobile division
US electronic payments processor First Data is establishing a business unit focused on delivering mobile payments and services, and has appointed FleetBoston's Nandita Bakhshi to head up the new division.
Bakhshi joins First Data as managing director of mobile solutions. She was previously executive vice president of consumer deposits and payments at FleetBoston and has also held executive level positions at Home Savings of America and Bank One Corporation.
First Data says the new division, called mobile solutions, will be focused solely on mobile services, including m-payments, prepaid top-up and mobile content.
The unit will work with associated companies, mobile network operators and merchant acquirers to develop an interoperable mobile payment standard.
Last year the firm's Encorus subsidiary won a transaction processing contract with Simpay, the mobile payment scheme founded by Orange, Telefónica Móviles, T-Mobile and Vodafone.
January 19, 2005 at 08:04 AM in Financial Services | Permalink | TrackBack (3) | Top of page | Blog Home
Finextra: European developers say SOAs set to soar
Almost three quarters of software developers in Europe will be developing service-orientated architectures this year, according to research conducted by Evans Data Corporation on behalf of BEA Systems.
The survey of over 1000 developers across Europe found that almost 75% are either developing, or expect to be developing SOA applications in 2005, with London (30%) and Madrid (25%) leading the way.
When questioned about the most useful technologies in SOA, over a quarter of respondents cited Web services (28%), followed by service orchestration with languages such as BPEL and BPELJ that help the automation of business processes (18%).
Commenting on the research, Jim Rivera, director of technology, BEA Systems, says: "We see a shift to SOA as being driven by the demand for IT to better align with the business and facilitate changing business processes."
The BEA survey also found that over half (60%) of European software developers will use Open Source Software (OSS) this year, although the lack of reliable support services remains a barrier to deeper market pentration.
Lack of regular updates, the unpredictable total cost of ownership and intellectual property concerns were also cited as impeding the uptake of OSS.
Credit Suisse First Boston's Chris Swan will be discussing ways in which service-oriented architectures help IT organisations to better serve business needs at Finexpo CTS, Finextra's third annual City Technology Strategies show, at Cabot Hall, Canary Wharf on Thursday 27 January 2005.
January 19, 2005 at 07:57 AM in Financial Services | Permalink | TrackBack (8) | Top of page | Blog Home
Haifa, Jan 12, 2005…Enhancing the online shopping experience is an issue for any business with a customer facing web site. Now an IBM researcher from Israel has come up with a way to accurately predict the potential lifetime value of each online customer, enabling businesses to provide enhanced services for the best customers and increase the effectiveness of marketing campaigns.
Although models that predict Customer Lifetime Value (CLV) already exist, they base their customer evaluation solely on the analysis of historical data from one customer, such as what items were bought in the past and at what frequency. However, existing technology can only identify a customer’s lifetime value once they have a notched up a significant purchase history within a particular online site. The new technology developed by IBM allows retailers to estimate the potential lifetime value of relatively new customers. It works by not only ‘learning’ from the spending patterns of a single customer, but also from the online activity of other more established customers. This way, by monitoring the buying behavior during the initial visits of a new customer, the model can assign the customer to a group and predict spending patterns based on those with the same 'buying profile'.
Once the model predicts that a visitor to a website has a high probability of purchasing, the company can decide, for example, to customize the experience by making relevant new offers to the right customers or prioritizing the customers’ requests so that they get faster online service. These new methods could provide a much more effective solution to web traffic management than the ‘first come first serve’ policies currently in place for most web sites. Such technologies are already being used in various domains, especially in the financial arena.
"It is a well known business principle that it is better to keep a good customer than find a new one," said Amit Fisher, the IBM researcher who began work on the model as part of his master's thesis. "By using intelligent data mining algorithms, we can predict the long-term value of a web customer, helping to optimize online businesses. At times when a website is experiencing peak demand, this type of technology could enable online retailers to prioritize the requests of the most valued customers – in a similar way to how 'gold card' loyalty schemes work in the hotel and airline industry".
The model was proven to be successful in a feasibility case study conducted on one of Israel’s top online auction sites. The model was constructed and validated based on actual customer data for an online auction site that serves thousands of customers each day. Daily data was taken for a one year period, during which time over 70,000 purchases took place, with a total value of over $18M. The new model was used to correlate customer behavior, accurately ranking customers with a better or worse potential for spending on the site—with a high degree of accuracy. In trials involving highly-populated groups of over 1,000 customers the model’s predictions were extremely accurate and came close to a correlation of 1.0 with actual data collected from the site.
This type of business optimization technology is becoming increasingly important to companies that are under pressure to add value to customers while at the same time cut costs and maximize resources. Fisher’s new system is typical of the kind of On Demand technology IBM’s business consultants are helping companies implement across various aspects of their business. The new Customer Lifetime Value model is currently being integrated into other "active technologies" being developed by staff at the IBM Haifa Research Labs. Active technologies can monitor applications in real-time and automatically make decisions based on either pre-defined or inferred business rules.
"The Internet still has a way to go before it reaches its full potential," notes Fisher. "By exploring new business models that pave the way to true customization, we can begin intelligently influencing business process policies and IT related decisions."
About IBM
IBM is the world’s largest information technology company, with 80 years of leadership in helping businesses innovate. Drawing on resources from across IBM and key Business Partners, IBM offers a wide range of services, solutions and technologies that enable customers, large and small, to take full advantage of the new era of e-business. For more information about IBM, visit http://www.ibm.com/.
About IBM Haifa Research Lab
The IBM Research Lab in Haifa (HRL) has conducted decades of research that has been vital to IBM’s success. R&D projects are being executed today by HRL for IBM labs in the USA, Canada, and Europe, in areas such as storage systems, verification technologies, multimedia, active management, information retrieval, programming environments, optimization technologies, and life sciences. The lab currently employs 500 people.
January 18, 2005 at 08:58 AM in Financial Services | Permalink | TrackBack (6) | Top of page | Blog Home
Finextra: Computer glitch forces Westpac to suspend online banking
Australian bank Westpac has been forced to shut down its online banking service after a security upgrade left some customers unable to access their accounts.
The problems first surfaced early morning Australian time, when some customers found they could not log on following a weekend cut over to a new security sign-in system.
Deluged by customer complaints, the bank decided to switch off its online banking service completely while it investigated the problems. Customers are being re-directed to telephone banking operators to complete transactions.
The bank has yet to provide customers with an estimated time for restoration of service as the problems continued throughout the night.
In August last year Westpac apologised to Internet banking customers after a batch of funds transfer transactions were duplicated due to "human error" during overnight processing. In September 2003, thousands of customers were affected by a similar foul up, in which regular bill payments were deducted twice from online accounts.
Westpac is not the only Australian bank suffering computer problems at present, with Bank of Queensland continuing to experience teething difficulties with ATMs and mortgage payment processing over its new Fiserv core banking system. The A$40 million implementation by outsourcing partner EDS has not gone smoothly for the bank, which has been fending off customer complaints since roll out ten months ago.
January 18, 2005 at 07:22 AM in Financial Services | Permalink | TrackBack (4) | Top of page | Blog Home
TheStar.com - Three sectors to watch
Technologies that are helping nations jump ahead
TYLER HAMILTON
Every developed society or industrial giant must confront a problem many of the world's poor or remote regions don't need to worry about.
That problem is the obsolescence of industries, infrastructure and business models.
Where is Toronto going to find the billions of dollars necessary to update its sewer, water and transit systems? How is North America going to move toward a hydrogen economy after becoming so dependent on fuelling infrastructure for gasoline? Deteriorating legacy infrastructure keeps so-called developed nations and corporate giants doing constant band-aid maintenance. It takes resources away from the overhauls required to stay competitive.
"They see the new technology coming and whap! They get blindsided by this thing right in front of them," Craig Mundie, chief technical officer of Microsoft Corp., once told me. "How does it always happen? Because they're too focused on incrementally improving what they already do."
Politicians and business leaders, obsessed with short-term paybacks, haven't the stomach to initiate massive change that will benefit future generations.
This gives developing countries or underdeveloped regions, including Canada's far north, an opportunity. New technologies — many developed in richer nations, including Canada — combined with the lack of legacy infrastructure are making it possible for parts of the world to jump past developed markets now hamstrung by their own maturity. Among sectors where such leapfrogging is beginning to occur:
Water treatment. Two weeks after the tsunami devastated South Asia, Oakville-based Zenon Environmental Inc. teamed up with World Vision to donate 54 of its Homespring water filtration units to areas of India and Sri Lanka where there was a shortage of drinking water.
Zenon has sold many of its systems in the region, so the donation was a good fit. "The product we sent doesn't require a lot of infrastructure," said Zenon spokesperson Nazeli Seferian. "You don't need to be hooked up to a municipal system. It can be hooked up to a well and still produce safe, clean water."
The systems are based on membrane technology. Long, thick and hollow strands of plastic fibre move around in untreated water and suck up liquid through billions of microscopic pores. Bacteria, viruses and other bad stuff can't pass through the pores. The water that does get by is safe to drink.
Homeowners can purchase the technology through Maytag, which struck a partnership with Zenon. The units retail for about $4,000 and are attached to the main water pipe coming into a building, house or cottage.
Seferian said small villages in India and Sri Lanka can connect these units to wells shared by many people. Zenon plans to pursue more contracts in these regions as economies develop.
"We're looking to work with other agencies in terms of helping countries get the funding," she said.
Zenon's Homespring units are complemented by larger industrial and municipal membrane-based systems. Among its contracts, the company is helping China's capital, Beijing, and the City of Datong, treat wastewater for industrial reuse.
Transportation and Energy. A developed transportation infrastructure requires a network of roads, lights and fuel stations that, in some areas of the world, simply don't exist. Not only are they expensive to build, once they're set up it's very difficult to change them.
That's why parts of China and other areas of Asia are considered ideal places to introduce hybrid and fuel cell cars, starting with city buses and fleets. It would allow these regions to leapfrog North America's gasoline-dependent transportation infrastructure and bypass the oil giants that feed it. "One thing China has going for it is its relatively young automotive industry," David Chen, vice-president for General Motors China, told Associated Press in November. "China's automotive industry does not need to fully take the fossil fuel path. It is in an ideal position to develop alternative energy."
But it's not just about fuelling infrastructure or technology under the hood. Lighting, for example, is important transportation infrastructure. But laying wiring needed to power traffic signals and road lights — even lights for bus shelters — can be costly, particularly for countries the size of China or India.
Carmanah Technologies of Victoria, B.C., mentioned in a Clean Break column last November, gets around this by combining solar, battery and LED technology. The result is a variety of lighting products that are self-contained, last for five years or more without maintenance, and are continually powered by sunlight, making them energy self-sufficient.
The great thing about such technology is it can be installed where and when needed, growing as demand requires. This same principle applies to fuel cells, solar photovoltaic systems and windmills, which can be set up in remote areas to supply electricity. For example, a community windmill or residential solar system can supply power directly — when the wind is blowing or sun is shining — or energy can be stored as hydrogen for use in a fuel cell system.
Distributed generation of renewable electricity is a growing trend as developing countries look for pollution-free methods of powering their growth.
Computing, communications. Wireless technologies have helped many countries and rural regions get the same telecom and Internet access as the most modern cities.
In Asia, more people surf the Web via mobile phones than North Americans log on by computer. Places in Africa without phone service are dropping radio towers into communities and tapping into nearby wireless systems or satellites that provide voice and Internet services.
Canada's cottagers have reason to rejoice. In a few weeks, Telesat Canada's Anik F2 satellite will begin providing broadband access to all of North America and some parts of South America.
In the area of computing, having relatively immature infrastructure can minimize the global reach of Microsoft Corp.'s monopoly grip. Linux and open-source software are helping regions of Africa leapfrog into the information age.
Last June, Linux Solutions, the International Institute of Communication and Development and Uganda Martyrs University created the East African Centre for Open Source Software.
The centre's goal is to train people in Burundi, Kenya, Rwanda, Tanzania and Uganda on open source software, which because of its low cost is ideally suited for cash-strapped regions of Africa.
In Spain's Extremadura region, home to some of the country's poorest citizens, they have somehow managed to put more than 80,000 computers in schools, loaded with a version of Linux. Officials there said they couldn't have done it if Microsoft was the only choice.
Meanwhile, Russia, China and India are embracing Linux, partly because of its affordability, but also because it allows them to control how it is developed, thus creating local industries that can boost local economies.
Clean Break reports on energy and environmental technologies, Reach Tyler Hamilton at thamilt@thestar.ca
Additional articles by Tyler Hamilton
January 17, 2005 at 06:33 PM in Web/Tech | Permalink | TrackBack (20) | Top of page | Blog Home
TheStar.com - Leapfrogging the technology gap
Wireless, computers and other innovations are quietly eliminating huge barriers to development in poor parts of the world.
ALEXANDRA SAMUEL
SPECIAL TO THE STAR
In Robib, Cambodia, villagers are getting medical advice from the world's best doctors. Schoolchildren are seeing their country's most famous landmarks for the first time. And the village economy is taking off, fueled by the sale of its handmade silk scarves on the global market.
All these benefits are coming via motorcycle — Internet-enabled motorcycles.
A wireless network links computers in the village to computer chips on each of five motorcycles a fleet. Each vehicle has a transmitter that allows it to upload and download e-mail and data via Wi-Fi, as it passes by village computers. At the end of the day the bikes return to a hub where they upload the information received. The next morning they download e-mail and data from the hub and take it out to the villages for transmission.
Villages like Robib have been described as "leapfroggers:" communities or even whole countries in the developing world, that are using information and communication technologies to leapfrog directly from being an agricultural to an information economy. It's a phenomenon that combines technology high and low in innovative ways, and is generating not only economic benefits but a new world of educational, social and political opportunities.
In highly developed countries like Canada, the information economy has emerged from long evolution — farm economies made room for craftsmen and artisans, who gave way to industrial production, and manufacturing has yielded to the rise of an information and service-based economy.
Economists and development experts wonder whether the developing world can — or should — follow the same path. Widespread industrial development would still leave much of Africa, Asia or Latin America a generation behind Europe and North America.
Of greater concern is the potential environmental impact of widespread industrialization: large-scale factory production in the developing world could greatly increase global energy consumption and pollution levels, particularly if factories use cheaper and dirtier production methods.
Information and communications technologies provide an alternative to this environmental and economic nightmare. The hardware, software and networks that have propelled developed economies out of the industrial era and into the information age are now promising to take the developing world directly from agrarian to post-industrial development.
The same satellite networks that link remote villages to urban markets can bring classroom education to communities too small or poor to support secondary schools. The cellphone systems that power community businesses can connect patients or doctors, or disparate family members. The Internet kiosks that access a global marketplace can also be used to access political information or organize grassroots campaigns in emerging democracies.
These opportunities have been opened by a growing understanding of the role of infrastructure in driving economic growth. "Until quite recently, it wasn't clear whether infrastructure generally was a result of economic growth or the other way around," notes Edgardo Sepulveda, a telecommunications economist with McCarthy Tetrault, a Toronto law firm. "There was a correlation but there wasn't agreement on causation. But now there's been sufficient evidence that most people would support the hypothesis that you can go from information and communications technology sector growth to general economic growth."
That realization has led development workers, governments, and businesses to embrace technology-enabled leapfrogging as a tremendous opportunity for the developing world. But successful leapfrogging depends on a carefully calibrated set of choices about which technologies to use, which projects to pursue, and which communities to engage.
According to Richard Fuchs, director of the information and communication technologies for development program at Canada's International Research and Development Centre, leapfrogging success depends on a combination of "ingenuity, perseverance, hard work and luck." By luck, he's talking about a constellation of historical circumstances that position a country for information and communications technology-led growth.
`IT is not about rich countries getting richer. It's about countries at every stage of development using technology in a way that is appropriate to their needs"
Richard Simpson, the Director of E-Commerce for Industry Canada
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Societies that place a high value on education, like Vietnam, are at an advantage, because a highly educated population is ready for work in a knowledge-based economy. A history of emigration, as in Ireland, can help — because an expatriate "boomerang" can bring a wealth of knowledge, skills and capital back into a developing economy. Even a language barrier can work in a country's favour. Uruguay exports millions in software to other Latin American countries, because the online dominance of English created a market opportunity for creating Spanish-language tools.
Bangalore, India, is the best-case scenario. Recognized as the Silicon Valley of the developing world, Bangalore has parlayed India's wealth of well-educated, tech-savvy, English-speaking programmers into a massive hive of interlocking programming shops, call centres, and tech companies.
Dell opened a Bangalore-based call centre in 2001, though with mixed results. Microsoft has just announced that it will open a Bangalore-based research centre this January. These international companies recognize that Indian programmers can be had for a fraction of the cost of their American colleagues — while still paying programmers many times the average Indian income. And India's economy derives a further benefit thanks to the many locally-owned companies that have emerged to partner or compete with the influx of international technology companies.
While Bangalore's technological, educational and linguistic advantages have given it a head start on leapfrogging, regions that lack those advantages stand to gain even more from the creative use of technology. Indeed, the countries that stand to benefit most from a leapfrogging strategy are those with limited IT infrastructure, limited education access, and limited literacy rates.
As a result, international agencies have had to get creative in the kinds of information and communications technology they use in developing countries. Where Canadian entrepreneurs often focus on the opportunities offered by the very latest technological innovations, the savviest leaders in Africa or Asia recognize that bells and whistles don't necessarily translate into economic results. The technologies that have the greatest impact are often relatively simple — and thus widely accessible.
Radio has been rediscovered as a tool that can be effectively paired with the Internet — or used on its own in new and creative ways. In Zambia, a radio-based training system is now delivering primary education to out-of-school children, about a third of whom are orphans; radio programs cover not only traditional skills like reading and math but also life skills like hygiene and nutrition. In Bolivia, a rural radio station uses the Internet to answer questions from listeners — like the farmer who wanted help dealing with a worm that was devouring his crops. Working online, the station found a Swedish expert who identified the worm, and broadcast the information on pest control to the entire community.
Cellphones have emerged as a leading leapfrog technology. Many developing countries have very limited landline penetration, in part due to the economic incentives for digging up copper wire and selling it. These same countries are now experiencing a cellphone explosion, due in part to the way that cellphones become what Fuchs describes as a "common property resource:" a resource that can be shared among an entire community or village.
The best-known example is Bangladesh's GrameenPhone, which has established a network of pay-per-use cellphones throughout the country. A similar network in South Africa has created a network of over 1,800 entrepreneurs, operating "phone shops" in over 4,400 locations across the country. Information gathered by cellphone lets farmers in Senegal double the price they get for their crops, and herders in Angola track their cattle via GPS.
Video compact disks, a technology not in wide use in North America but a popular entertainment medium in southeast Asia, have become crucial educational tools. A project in the Mekong region of Thailand and Laos has used VCDs to educate young women and girls on immigration issues, employment alternatives, and health services. It's a way of helping a group that is often only semi-literate, and particularly vulnerable to HIV/AIDS, drug abuse and sexual exploitation.
And yes, the Internet has a role, too. In the post-Soviet country of Armenia, development teams are using the Internet for everything from teacher training to employment counseling.
Says Nancy White, an information and communications technology consultant who has worked on a number of Armenia's online development projects, "These projects are demonstrating, to people that live on a mountain top that is inaccessible in the winter, `I can connect with other people who share my interests and needs.'"
Despite this technological eclecticism, access to hardware and software remains a core challenge. The United Nations' World Summit on the Information Society, which will culminate in a meeting later this year, has devoted a great deal of attention to the challenge of bridging the digital divide between the rich and poor nations.
While the U. N. summit has become a magnet for information and communications technology (ICT) champions from governments, businesses and civil society organizations around the world, its U.N. sponsors explicitly describe ICT access as a means rather than an end.
This focus is embodied by the U.N.'s Millennium Declaration, a 2000 agreement that contains commitments to halve, by the year 2015, ``the proportion of the world's population living on less than one U.S. dollar per day, suffering from hunger or having no access to drinking water," the summit's Web site declares. "ICTs can help in achieving all of these goals."
That orientation is mirrored by the approach that Canada has taken in supporting information and communications technology projects in the developing world.
"The development community has placed a great emphasis on being able to meet basic development objectives," says Richard Simpson, the Director of E-Commerce for Industry Canada. "IT is not about rich countries getting richer. It's not even about emerging economies. It's about countries at every stage of development using technology in a way that is appropriate to their needs."
Needs like those of Nallavadu village in Pondicherry, India. A region in which many people live on incomes of less than $1 a day, Pondicherry's information and communications technology development strategy traces back to a 1998 project that brought Internet-linked telecentres to the region's villages. Today, villagers routinely use the Internet to access information that helps them sell their crops at the latest commodity prices, obtain medical advice, and track regional weather and transport.
How does that kind of technology affect daily life?
Just look at what happened in the village of Nallavadu. Vijayakumar Gunasekaran, the son of a Nallavadu fisherman, learned of December's earthquake and tsunami from his current home in Singapore. When Gunasekaran called home to warn his family, they passed along the warning to fellow villagers — who used the village's telecentre to broadcast a community alarm.
Thanks to that alarm, the village was evacuated, ensuring that all 3,600 villagers survived.
If information and communications-technology-enabled leapfrogging could hold the key to economic opportunity for the developing world, are the citizens of advanced industrial nations — like Canada — ready for what that means?
"The information economy is heading to Asia," notes Fuchs. "India and China are the next information technopols. If wealth, income, profitability and productivity rest in part on ICTs, then India's economy is increasingly more competitive than ours."
Alexandra Samuel is a
Vancouver-based technology writer and strategist with Angus Reid Consultants
January 17, 2005 at 08:43 AM in Wireless | Permalink | TrackBack (6) | Top of page | Blog Home
TheStar.com - Encryption makes e-messages secure
Prickly CIBC case spotlights legitimate privacy concerns
People are urged to use security features on PCs, Blackberrys
RACHEL ROSS
TECHNOLOGY REPORTER
In the era of paper and pen, keeping a message private was easy.
You simply read the message, then ate it. Those with weak constitutions could burn or shred the document.
Discretion in the digital world can be far more challenging.
Many people don't know how to keep electronic messages private, judging by a recent lawsuit launched by Canadian Imperial Bank of Commerce against a group of employees who left to join the upstart firm Genuity Capital Markets. CIBC alleges some former employees used corporate resources, including the bank's e-mail system, to help form the firm. Some of the e-mail sent via Blackberry handheld devices has been entered into evidence. The Genuity people deny the allegations, but the case has left many executives wondering how to keep private conversations private.
Experts in electronic security agree that the best way to secure digital messages is with encryption, be it a regular e-mail or a message sent with a Blackberry.
Encryption is a process of "scrambling messages" using special keys, explains David Yach, senior vice-president of software at Research in Motion. The Waterloo company makes the Blackberry devices that countless executives use to swap messages.
The keys used for encryption aren't like the grooved pieces of metal we use to secure our homes. Encryption keys, which are generated by software, are more like the secret rings that let children decode messages from their friends.
With common encryption methods, each user has two keys. One of the keys is private and known only by the owner. The other is public. Say a broker wants to send his client a private message and both parties already own a set of keys. The broker writes his e-mail as usual, then scrambles the message using his public key. The client unscrambles the message using his private key.
Unlike the secret decoder rings of childhood, encrypting or decrypting a message doesn't involve a lot of patience and reference tables. With e-mail software such as Microsoft Outlook, encrypting a message only requires a couple of clicks of the mouse.
Once the correct clicks have been made and the message encrypted, it can be sent to the client over the Internet. The message is unintelligible in transit and to anyone except the client with the right key. When the message lands in the client's inbox, her e-mail software automatically deciphers the message using her private key.
For most people, using encryption won't require learning new software, but they will have to obtain ad-on software that works with their existing e-mail software. Those already using well-known programs such as Microsoft Outlook can still use it to send and receive mail, as many encryption systems can be integrated with the software.
Secure Multi-Purpose Internet Mail Extensions (S/MIME) is arguably the most common way to make e-mail messages private using encryption.
If a broker sends his e-mail using S/MIME the message is not only encrypted but also sealed with a digital certificate. It authenticates the message so the recipient is assured the message has not been altered during its online travels.
"Internet e-mail without security protection is much like sending a postcard over the Internet," said John Weigelt, chief security adviser for Microsoft Canada. "S/MIME is like putting an e-mail into an envelope and putting a wax seal on the back of it, so you could ensure it was sent from a particular individual."
While S/MIME can be used with Microsoft products such as Outlook Express, the software giant has its own solution for keeping e-mail private, called the Windows Rights Management Service. This ad-on system lets the writer set parameters on who can read a message and when. Users can even set expiry dates on e-mail so it self-destructs.
Another popular security system is called Pretty Good Privacy, or PGP. It works in much the same way as S/MIME — using a two-key system — and can be used with many different kinds of e-mail software. PGP and S/MIME are normally installed by corporate information technology workers across the company's entire computer network.
Those who can't convince their company to set up such a privacy system, or wish to secure e-mail sent from their home computer, might want to try PGP Personal Desktop (http://www.pgp.com) software that is designed for such applications.
Lone wolves might also want to try one of a handful of Web-based e-mail services, such as Hushmail, which provide an accessible means of sending secure e-mail. As with more traditional encryption systems, a free Hushmail account automates the scrambling and unscrambling process so that the user can concentrate on writing the e-mail instead of securing it. Ideally, both the sender and recipient should use Hushmail so that the e-mail resides on a single, encrypted server.
Blackberry handheld devices, which are a bit like pagers with keyboards, add complexity to the security conundrum because they can send messages different ways: via e-mail or the Blackberry PIN system.
Every e-mail message sent via a Blackberry is encrypted, but only while travelling outside of the corporate network. This encryption is used so a third party can't read the message if it is intercepted during its flight through the air to the wireless device. But the same message likely travels around in an unscrambled, readable form earlier on in its journey, as it is routed by the corporate e-mail server.
Yach said companies that use S/MIME for regular corporate e-mail can use it on their Blackberrys, for end-to-end security. With S/MIME, the message remains scrambled throughout its journey, until it reaches your in-box.
"It's appealing to those who are hyper-paranoid," he said.
Research in Motion itself processes a large proportion of messages sent by Blackberry. Interestingly, Yach said the company doesn't keep copies.
"We have the encrypted messages long enough to get them to your device, but then they are deleted," Yach said. "We certainly don't have any means of knowing what happened last week or month ago."
A brokerage firm might, however. Some firms choose to keep copies of all transmissions that travel over the corporate network, including e-mail messages sent via Blackberry.
Many consider Blackberry PIN messages more secure than e-mail messages sent by Blackberry, because there are fewer links in the chain.
PIN messages (so named because messages are addressed to a personal identification number) are sent directly from one Blackberry to another instead of going through e-mail servers.
For total privacy, Yach said sender and recipient should delete PIN messages after they are read. Otherwise it will be saved in a readable format on the device and to their computer the next time the user backs up data.
Mark Fabro, a senior manager with Bearingpoint Inc.'s security solutions practice, said the best rule of thumb is to avoid using corporate networks and devices for private business.
As a security consultant Fabro said he'd never advise anyone to perform an unethical act, such as undermining an employer using secret messages sent from a corporate computer or Blackberry.
Moreover, the scheme likely couldn't be kept a secret forever if you're using company resources.
"There is no such thing as absolute security," Fabro said. "What has happened with this Genuity lawsuit is a fantastic wake-up call for the community at large."
S/MIME and PGP both provide a very strong layer of added privacy for e-mail. It would take an unreasonable amount of time and resources for a company to decipher an encrypted message without the key.
Legally, however, a company could make the argument that they have a right to an employee's key if it was stored on a corporate computer. With access to the keys all those private messages would be easily unlocked, read and possibly used in court.
Additional articles by Rachel Ross
January 17, 2005 at 08:41 AM in email | Permalink | TrackBack (21) | Top of page | Blog Home
CNN.com - Top 25: Innovations - Jan 10, 2005
ATMs, PDAs and CDs: 25 years of innovation
Wednesday, January 12, 2005 Posted: 1541 GMT (2341 HKT)
TOP INNOVATIONS
The number one innovation will be announced on Sunday, January 16, at 8 p.m. ET.
2. Cell phone
3. Personal computers
4. Fiber optics
5. E-mail
6. Commercialized GPS
7. Portable computers
8. Memory storage discs
9. Consumer level digital camera
10. Radio frequency ID tags
11. MEMS
12. DNA fingerprinting
13. Air bags
14. ATM
15. Advanced batteries
16. Hybrid car
17. OLEDs
18. Display panels
19. HDTV
20. Space shuttle
21. Nanotechnology
22. Flash memory
23. Voice mail
24. Modern hearing aids
25. Short Range, High Frequency Radio
(CNN) -- Back in 1980, the expression "you can't take it with you" carried a lot more weight than it does today -- mainly because "it" weighed too much.
Over the past quarter century, though, scientific innovation has made almost everything portable.
That's how the cell phone and the laptop computer landed at Nos. 2 and 7, respectively, on a list of the top 25 innovations of the past 25 years, according to a panel of technology leaders assembled by the Lemelson-MIT Program, which promotes inventiveness in teens.
In creating the list, the group hoped to single out "25 non-medically related technological innovations that have become widely used since 1980, are readily recognizable by most Americans, have had a direct and perceptible impact on our everyday lives, and/or could dramatically affect our lives in the future."
Like the cell phone and laptop, many of the items on the list are so commonplace that they are almost taken for granted.
For example, many people turn off their PCs (No. 3) and their HDTV (No. 19) or plasma screen TVs (No. 18) as they leave their homes.
Once in their cars, they will probably give the airbags (No. 13) that can save their lives in an accident barely an afterthought as they listen to music on CDs (No. 8).
Some will use the commercialized GPS (Global Positioning System, No. 6) to plan their route, and if it is a pleasure trip, they will probably bring along their digital cameras (No. 9).
Upon arriving at their destination, others will check their e-mail (No. 5) via short-range high frequency radio (Wi-Fi, No. 25) and their voicemail (No. 23), before heading off to an ATM (No. 14) for cash.
'Thank goodness for nanotechnology'
The technology that makes these items possible is taken even more for granted by the average consumer.
It is safe to say that the first words of someone who walks away from a car accident unharmed are not, "Thank goodness for the advent of nanotechnology (No. 21) and MEMS (microelectromechanical system, No. 11)."
Yet without the tiny silicon chip that sensed the impending collision, the airbag would not have deployed in time.
"The device that causes an airbag to inflate in a crash is a nanotech device," said David Kirkpatrick, senior editor at Fortune Magazine.
"It's a highly sensitive little device, an accelerometer that can detect when a car's movement has suddenly stopped. And that's a very key safety device that affects all of our lives."
Also helping keep people safe are advanced compact power sources such as nickel-metal hydride and lithium-ion batteries (No. 15), which make emergency phone calls possible. Without those batteries, cell phones would be far less dependable and certainly not rechargeable.
And digital cameras would not exist without flash memory (No. 22) and OLEDs (organic light-emitting diodes, No. 17).
"Flash memory is a tiny version of the disk drive that's in your computer," said Gene Fitzgerald, MIT professor of material science and engineering. "On your disk drive you might store pictures and other information, and the flash memory is a tiny device that can store all that information."
Fighting crime with science
Law enforcement has used science to its advantage with DNA fingerprinting (No. 12).
The procedure is nothing like the ink-on-the-fingers routine you see on TV crime shows. DNA fingerprinting is a laboratory process that produces a printed pattern of a person's DNA. Everyone's DNA is different ---- just like each person's fingerprints are unique.
"DNA fingerprinting is important because it's an absolute identification of each individual," said Merton Flemings, director of the Lemelson-MIT program and MIT professor of material science and engineering.
"No two DNA fingerprints are alike, so we can distinguish the individual who committed a crime from one who didn't, and we can determine family relationships that couldn't otherwise be determined."
story.fiberoptics.photodisc.jpg
Fiber optics help link the world together, making inexpensive phone calls and the plethora of cable channels possible.
Identifying objects also is easier these days. Everything from airport security and delivery services to supermarket checkout lines uses radio frequency ID tags (No. 10) to track materials on their way to their intended destinations.
Some of the inventions on the list have brought to life concepts formerly reserved for science-fiction writers. Among them are the space shuttle (No. 20), which advanced space exploration, and hybrid cars (No. 16), which pollute less by using less gasoline. Interestingly, the innovation that laid the groundwork for many of the inventions mentioned above can be found underground, where fiber optics (No. 4) has helped turn the world into a global village.
"Fiber optics have linked the world together and made our world, our planet, basically one small place. If it weren't for fiber optics, we wouldn't be able to have inexpensive global phone calls or 200 cable channels on our televisions," Kirkpatrick said.
"There are innumerable ways that fiber optics have changed our life, but the most significant one is that they have woven the planet together into a very tightly knit global society."
Rounding out the list are modern hearing aids (No. 24), which have improved the quality of life for the hearing impaired by offering sleeker, better-designed models.
In the coming days, CNN.com will announce the invention panel members chose as the most significant of the last 25 years. Be sure to log on and find out what they ranked No. 1.
January 16, 2005 at 11:41 PM in Web/Tech | Permalink | TrackBack (9) | Top of page | Blog Home
Technology - Why There's No Escaping the Blog - FORTUNE
Freewheeling bloggers can boost your product—or destroy it. Either way, they've become a force business can't afford to ignore.
By David Kirkpatrick and Daniel Roth
1 Early in the evening of Dec. 1, Microsoft revealed that it planned to take over the world of blogs—the five-million-plus web journals that have exploded on the Internet in the past few years. The company's weapon would be a new service called MSN Spaces, online software that allows people to easily create and maintain blogs. It didn't take long for the blogging world to do what it does best: swarm around a new piece of information; push, prod, and poke at it; and leave it either stronger or a bloody mess. The next day, at the widely read Boing Boing blog, co-editor Xeni Jardin opted to do the latter
She titled her critique of MSN Spaces "7 Dirty Blogs" and hilariously sent up the fickle censoring filters Microsoft appeared to have built in. MSN Spaces prohibited her from starting a blog called Pornography and the Law or another entitled Corporate Whore Chronicles; yet World of Poop passed, as did the educational Smoking Crack: A How-To Guide for Teens. Within the first hour of Jardin's post, five blogs had linked to it, including the site of widely read San Jose Mercury News columnist Dan Gillmor. By the end of the day there were dozens of blogs pointing readers to "7 Dirty Blogs," a proliferation of links that over the next few weeks topped 300. There were Italian blogs and Chinese blogs and blogs in Greek, German, and Portuguese. There were blogs with names like Tie-Dyed Brain Waves, Stubborn Like a Mule, and LibertyBlog. Each added its own tweak. "Ooooh, that's what I want: a blog that doesn't allow me to speak my mind," wrote a blogger called Kung Pow Pig. The conversation had clearly gotten out of Microsoft's hands.
Typically Microsoft would have taken the hits and kept powering forward. That is the Microsoft way. For years such behavior has done little but make people feel defenseless against the company. But this time Microsoft deployed one of its most important voices to talk back: not Bill Gates or Steve Ballmer, but Robert Scoble.
Scoble has been at Microsoft only 19 months and has neither a high-ranking title (he's a "software evangelist" who works with outside programmers) nor such corporate perks as a window in his office. What Scoble does have is a blog of his own, Scobleizer, on which he weighs in daily with opinions about happenings in the tech world—especially the inner world of Microsoft. On a recent day he posted nine remarks, each averaging a paragraph, on topics ranging from how a company programmer had fixed a security bug to the fact that his wife is becoming a U.S. citizen. Nothing too profound or insightful, yet Scobleizer has given the Microsoft monolith something it has long lacked: an approachable human face.
When it came to the criticism emanating from Boing Boing, Scoble simply... agreed. "MSN Spaces isn't the blogging service for me," he wrote. Nobody at Microsoft asked Scoble to comment; he just did it on his own, adding that he would make sure that the team working on Spaces was aware of the complaints. And he kept revisiting the issue on his blog. As the anti-Microsoft crowd cried censorship, the nearly 4,000 blogs linking to Scoble were able to see his running commentary on how Microsoft was reacting. "I get comments on my blog saying, 'I didn't like Microsoft before, but at least they're listening to us,'" says Scoble. "The blog is the best relationship generator you've ever seen." His famous boss agrees. "It's all about openness," says chairman Bill Gates of Microsoft's public blogs like Scobleizer. "People see them as a reflection of an open, communicative culture that isn't afraid to be self-critical."
The blog—short for weblog—can indeed be, as Scoble and Gates say, fabulous for relationships. But it can also be much more: a company's worst PR nightmare, its best chance to talk with new and old customers, an ideal way to send out information, and the hardest way to control it. Blogs are challenging the media and changing how people in advertising, marketing, and public relations do their jobs. A few companies like Microsoft are finding ways to work with the blogging world—even as they're getting hammered by it. So far, most others are simply ignoring it.
That will get harder: According to blog search-engine and measurement firm Technorati, 23,000 new weblogs are created every day—or about one every three seconds. Each blog adds to an inescapable trend fueled by the Internet: the democratization of power and opinion. Blogs are just the latest tool that makes it harder for corporations and other institutions to control and dictate their message. An amateur media is springing up, and the smart are adapting. Says Richard Edelman, CEO of Edelman Public Relations: "Now you've got to pitch the bloggers too. You can't just pitch to conventional media."
Of course, it's difficult to take the phenomenon seriously when most blogs involve kids talking about their dates, people posting pictures of their cats, or lefties raging about the right (and vice versa). But whatever the topic, the discussion of business isn't usually too far behind: from bad experiences with a product to good customer service somewhere else. Suddenly everyone's a publisher and everyone's a critic. Says Jeff Jarvis, author of the blog BuzzMachine, and president and creative director of newspaper publisher Advance Publications' Internet division: "There should be someone at every company whose job is to put into Google and blog search engines the name of the company or the brand, followed by the word 'sucks,' just to see what customers are saying."
It all used to be so easy; the adage went "never pick a fight with anyone who buys ink by the barrel." But now everyone can get ink for free, launch a diatribe, and—if what they have to say is interesting to enough people—expect web-enabled word of mouth to carry it around the world. Unlike earlier promises of self-publishing revolutions, the blog movement seems to be the real thing. A big reason for that is a tiny innovation called the permalink: a unique web address for each posting on every blog. Instead of linking to web pages, which can change, bloggers link to one another's posts, which typically remain accessible indefinitely. This style of linking also gives blogs a viral quality, so a pertinent post can gain broad attention amazingly fast—and reputations can get taken down just as quickly.
No one knows that better than Dan Rather. In a now infamous episode, the anchor fell like Goliath to the political bloggers during the presidential campaign. From the start, it was clear that these nobodies with laptops were going to have an impact. Conservative blogs, like the hugely popular InstaPundit, run by Glenn Reynolds, a University of Tennessee law professor, and Little Green Footballs, written by web designer Charles Johnson, or left-leaning sites like Markos Moulitsas's DailyKos, were rallying their hundreds of thousands of daily readers to whatever cause they alighted on. Then, in mid-September, came what the blogosphere—the term used in the blogging world for the blogging world—calls Rathergate. On 60 Minutes, Rather scooped rivals with memos that offered proof of George W. Bush's dereliction of duty while in the Texas National Guard—or that seemed to. Within a half hour of the broadcast, bloggers started questioning the authenticity of the memos. Others picked up on the suspicions and added their own thoughts and findings. After denying it at first, CBS later admitted it could "no longer vouch" for the memos. Soon after the election, Rather announced his retirement and the blogosphere declared victory—to the chagrin of the mainstream press. "We used to think that the news was finished when we printed it," says Jarvis. "But that's when the news now begins."
Just as Rathergate was breaking, corporate America got its clearest sign of blogger muscle—in this case, brought on not by memos but by a Bic pen. On Sept. 12 someone with the moniker "unaesthetic" posted in a group discussion site for bicycle enthusiasts a strange thing he or she had noticed: that the ubiquitous, U-shaped Kryptonite lock could be easily picked with a Bic ballpoint pen. Two days later a number of blogs, including the consumer electronics site Engadget, posted a video demonstrating the trick. "We're switching to something else ASAP," wrote Engadget editor Phillip Torrone. On Sept. 16, Kryptonite issued a bland statement saying the locks remained a "deterrent to theft" and promising that a new line would be "tougher." That wasn't enough. ("Trivial empty answer," wrote someone in the Engadget comments section.) Every day new bloggers began writing about the issue and talking about their experiences, and hundreds of thousands were reading about it. Prompted by the blogs, the New York Times and the Associated Press on Sept. 17 published stories about the problem—articles that set off a new chain of blogging. On Sept. 19, estimates Technorati, about 1.8 million people saw postings about Kryptonite (see chart).
Finally, on Sept. 22, Kryptonite announced it would exchange any affected lock free. The company now expects to send out over 100,000 new locks. "It's been—I don't necessarily want to use the word 'devastating'—but it's been serious from a business perspective," says marketing director Karen Rizzo. Kryptonite's parent, Ingersoll-Rand, said it expects the fiasco to cost $10 million, a big chunk of Kryptonite's estimated $25 million in revenues. Ten days, $10 million. "Had they responded earlier, they might have stopped the anger before it hit the papers and became widespread," says Andrew Bernstein, CEO of Cymfony, a data-analysis company that watches the web for corporate customers and provides warning of such impending catastrophes.
Those who have tried to game the blogosphere haven't done much better. Mazda, hoping to reach its Gen Y buyers, crafted a blog supposedly run by someone named Kid Halloween, a 22-year-old hipster who posted things like: "Tonight I am going to see Ministry and My Life With the Thrill Kill Cult.... This will be a retro industrial flashback." He also posted a link to three videos he said a friend recorded off public-access TV. One showed a Mazda3 attempting to break dance, and another had it driving off a ramp like a skateboard, leading in both cases to frightening crashes. Other bloggers sensed a phony in their midst—the expensively produced videos were tip-offs—and began talking about it. Suddenly Mazda wasn't being hailed; it was being reviled on widely read blogs. "Everything about that 'blog' is insulting," wrote a poster on Autoblog. Mazda pulled the site after three days and now says it never intended it to have a long run. "It was a learning experience," says a spokesman. Tig Tillinghast, who runs the respected advertising industry blog Marketingvox.com, calls Mazda's blogging clumsiness "the moral equivalent of doing an English-language print ad that was written by a native French speaker."
"If you fudge or lie on a blog, you are biting the karmic weenie," says Steve Hayden, vice chairman of advertising giant Ogilvy & Mather, which creates blogs for clients. "The negative reaction will be so great that, whatever your intention was, it will be overwhelmed and crushed like a bug. You're fighting with very powerful forces because it's real people's opinions."
It all sounds like so much insanity: a worldwide cabal ready to pounce on and publicize any error a company makes. Yet it's not as if corporations are just sitting ducks. For one thing, not every negative voice is that influential. For every Rathergate or Kryptonite, there are thousands of other posts that disappear into the ether. Simply railing against Wal-Mart or repeating the latest conspiracy theory about Halliburton doesn't guarantee that the blogosphere will take notice.
More important, obsessive blogs can mean obsessive customers. The witty blogger behind Manolo's Shoe Blog may bash Birkenstocks and Uggs, but he drools over Coach, Prada, and, of course, Manolo Blahniks. Before blogs, finding someone like him—a person who probably helps others make buying decisions—would have been difficult and costly. Now it's just a matter of Googling or searching on any of the blog-specific search engines like Technorati or Feedster. For those who want to go deeper, firms like Intelliseek and BuzzMetrics use sophisticated software to analyze the blog universe for corporate clients. They use this growing online database of constantly updated consumer opinion for marketing and product-development ideas.
But how to speak directly to this swarm? Wary of a Mazda-like fiasco, most companies that want to blog try to walk a fine line: telling employee bloggers to be honest but also encouraging evangelism. Corporate propaganda almost always drives readers away; real people with real opinions keep them coming back. At the GM Smallblock Engine Blog, employees and customers rhapsodize about Corvettes and other GM cars. Stoneyfield Farm has several blogs about yogurt. Not surprisingly, the earliest adopters have been tech firms. The biggest chunk of the 5,000 or so corporate bloggers comes from Microsoft, but others work at Monster.com, Intuit, and Sun Microsystems—where even the company's acerbic No. 2, Jonathan Schwartz, gets in on the action. (A recent Schwartz post openly criticizes competitor Hewlett-Packard: "Yet another series of disappointing announcements.")
At best, these blogs can act like tranquilizers in an elephant: slowing a maddened charge against a company but not stopping it. Macromedia three years ago set up a few employee blogs to give customers a one-stop place for info and tech support. The blogs, and the employees running them, quickly became an important resource to customers—as well as to the company. When Macromedia in 2003 released software that was maddeningly slow, the company bloggers quickly acknowledged the need for fixes, helping ease some of the tension. "It was a great early-warning system and helped us frame the situation," says senior vice president Tom Hale. "It accrued a huge benefit to us."
"I need to be credible," says Microsoft's Scoble. "If I'm only saying, 'Use Microsoft products, rah rah rah,' it sounds like a press release, and I lose all ability to have a conversation with the world at large."
Unfiltered conversations aren't exactly the kind of things in-house counsel encourage, though. And employees have been fired at Starbucks, Harvard University, Delta, and social-networking software company Friendster for blogs the organizations apparently deemed offensive, though none will comment. Even blogging boosters Microsoft and Sun have hit bumps. Microsoft fired a temp who posted photos of Apple computers sitting on a company loading dock. Sun CEO Scott McNealy was urged not to blog after he showed trial posts to company lawyers and colleagues. "I've got too many constituents that I have to pretend to be nice to," he says.
As big companies try to maintain a delicate balance, it's often the smaller players who are nimbly working blogs to their advantage. Entrepreneurs like Shayne McQuade have learned that bloggers can be an easy—and free—marketing arm, if used right. McQuade, a onetime McKinsey consultant, in 2002 invented a backpack with built-in solar panels that enables hikers