One of the best-held secrets in the German credit card industry was inadvertently revealed last night at an informal press dinner hosted by Bayern Card Services, an acquirer jointly operated by Bayerische Landesbank and the Bavarian community-owned savings and loan banks (“Sparkassen”). Asked just how much money banks were losing from credit card fraud, Monika Kummer, head of risk management for BCS, blurted out a figure of between 0.2 and 0.3 percent of total card turnover. When pushed for further details, she clamed up, but the genie was already out of the bottle.
After that, the math was simple. BCS handles the card business for about 70 percent of the 438 Sparkassen in Germany and reported total revenues of 16 billion Euros last year, so its member banks lost roughly 36 million Euros through identity theft.
Who’s pulling the cart on data protection? At least in Germany, that has traditionally been government’s role, and that has made the German regulatory environment one of the fiercest in the world for foreign enterprises and organizations. U.S. companies in particular are often reluctant to engage in the German market for fear of running afoul of the strict laws, but the same actually goes for the EU as a whole. Witness Amazon Web Services decision to build two separate clouds, one (based in Dublin) for Europe and another for the rest of the world.
So it may come as a surprise to hear a voice raised in Germany demanding a whole new deal on data protection. Sven Gábor Jánszky is the founder of 2B Ahead, a think tank based in Halle, a backwoods town in the wilds of former East Germany. Presumably that gives him enough time to think deeply about serious issues such as Digital Identity.
His solution may sound simple – let business take care of it – but it isn’t. And especially coming from someone in the typically paternalistic Old Europe, it’s downright seditious.
And what is even more surprising was that ARD, the largest German TV station, gave Mr. Jánszky a spot on its prime time “Tagesthemen” news show to voice his opinion. “We need to reinvent data protection”, he told an audience of millions of German watchers, “and business, especially the IT business, needs to take the lead.”
How often do identity gurus in the U.S. get to air their views on “60 minutes”?
Anyway, Jánszky thinks that the concept of the state protecting people’s privacy is so 20th century. “They want to share their personal information”, he believes, and it’s the job of business to help them do it in a controlled fashion. He thinks it’s high time the industry takes the lead in creating a system that will allow everyone to distribute personal information freely, but retain a final say in where it goes and how it’s used. For starters, he says, companies should provide users full disclosure on what data about them they have stored. This would be a first step towards establishing a trust relationship, and that is something any company should be interested in. Trust leads to loyalty, and that means return customers and more moola in the till.
The role of government, Jánszky says, is simple: Stop trying to build walls around the consumer and instead focus on passing laws that enable companies to use personal information, provided they do so in a responsible way and with the full content and oversight of the consumer.
This may not sound exactly new to some within the identity community. But then, has anybody been on national TV lately to espouse their views? The Germans may be behind (or ahead, depending on your point of view) in terms of draconian privacy laws, but at least they have a public discussion going. Wonder where it will finally lead…
I was talking recently with Joerg Mauz, the CIO of a small German company called Ansmann AG that makes batteries and chargers for laptops and mobile phones. They may be tiny by some standards, but they have a big global footprint, and their 300 people are distributed around the globe from Shanghai to Macau to Stockholm and soon the U.S. as well. I asked him whether he thought Identity Management was a big issue for small companies like his, and he laughed. “They don’t know what it is”, he said, and then added: “Even though they may be doing it themselves already.”
Ansmann is a good case in point: They had been using software provided by Sun Microsystems for years, and their license included the Identity Manager product – but they neither knew nor cared. “We sort of started doing IdM by accident”, he told me.
But when Joerg Mauz decided he needed to start doing e-provisioning to handle the influx of new people in his fast-growing company, and seeing as how his boss wasn’t going to give him any additional budget anytime soon, he took another look at Identity Manager and decided he could get what he wanted more or less for free. All he had to do was ask his system house, Kogit in Darmstadt, to write a few lines of additional code (it eventually paid them for 35 man days), and suddenly he had a neat little workflow that could handle logical and physical assets, anything from mail accounts to company badges, laptops and company cars.
He still doesn’t see himself as doing Identity Management. And if his story is any proof, then IdM vendors and providers would do good to stop trying to sell them something they don’t really understand and doesn’t terribly interested them in the first place.
Instead, they should focus on solving the problems people really have. And they may go under completely different monikers. That applies especially to the German “Mittelstand”, the thousands of small and medium-sized companies that make up the backbone of the German economy.
How many terrorists work for your company? Dunno? Well, see you in jail, pal!
I just came back from a meeting of the German chapter of IAPP, the International Association of Privacy Professionals, and the words of the chairman, Dr. Jyn Schultze-Melling, a lawyer with the firm Nörr, Stiefenhofer & Lutz, still ring in my ears: “We are sacrificing employee privacy on the altar of anti-terrorism.”
It turns out that firms are required by law to check their employees names against lists of terrorism suspects published by the United Nations and the European Union. In Germany, §34 of AWG, the Foreign Trade Law, forbids companies aiding or abetting persons or organizations that endanger national security or the “peaceful coexistence of peoples” in any way – like for instance paying them a salary. Failure to comply with this law carries heavy fines; up to 5 years in jail for the CEO, for instance.
On the other hand, European data privacy laws prohibit routine scanning of personal data without due cause. So if nobody has done anything suspicious lately, running their names past the UN or EU lists is probably illegal in many countries.
Of course, tell that to the families after some nut explodes a vest of dynamite in your company canteen and slaughters a few of your employees.
So yes, companies have to screen their own people, but when exactly? On hiring? What if the employee has a change of heart two or three years later and signs up for the Muslim Brotherhood? Does that mean you have to scan periodically, maybe once or twice a year? And if you live in a country like Germany where the works committee has a big say in these matters, how do you ever hope to convince them?
According to Schultze-Melling, there are loads of even more mundane problems to consider. For instance, Osama Bin Laden would hardly use his real name when joining your company, and probably not even one of the score or so aka’s he is also listed under in the UN list, but would chose an entirely new name instead. How about different spellings? After all, for an Arab speaker, Ahmed Gamdi, Ahmad Al Gamdi, Ahmet Gamdi, and Ahmed Al-gamdi could very well be one and the same guy. There are more than 32 spelling for Lybia’s Colonel Gaddafi (or Qadhafi, Kadafi, Gadhafi, Qaddafi, etc.). Are you legally required to check them all?
As ist that wasn’t bad enough, you can try telling it the cops who come to arrest your boss because one of your employees gave to the local chapter of the Holy Land Foundation which funds Hamas or the National Development Front in India that finances Al-Qaeda. The UN and the EU, not to mention the US Department, publish lists of organizations they consider to be affiliates or fund raisers for international terrorists. Unfortunately, hardly any new employee mentions this in his hiring questionnaire, so what should you do? Periodically ask all your people whether they have joined a terrorist organization lately? Maybe hand them the list and ask them to make appropriate check marks. And what if they refuse — do you fire them? Anyway, answering in the affirmative could constitute an act of self-incrimination, so requiring it would itself be illegal in most civilized countries.
Until now, most HR departments have dealt with these questions in the handiest possible way – by ignoring them. Out of about 20 companies represented at the IAPP meeting, among them a few on the Fortune 100 list, only two raised their hands when I asked who has ever conducted a scan for terrorist suspects within their organizations.
My feeling is that this illustrates the legislative confusion surrounding identity and privacy on the governmental level, but it also points out some tough questions that need to be answered by identity pros before we can hope to achieve anything like a balanced approach to the legitimate concerns of citizens, employees and consumers about how authorities and employers handle their personal data on the one hand, and the requirements of businesses, bureaucracies and, yes, terrorism fighters on the other.
Somehow the Hofbraeukeller in Munich, one of my favorite city’s nicest beer garden restaurants, seems to lend itself particularly well to long, meandering discussions of identity management. It’s the place the U.S. participants at the European Identity Conference regularly gather for their pre-conference pigs’ feet feast, and since it’s conveniently located around the corner from where I live, I often use it as a meeting place for visitors from all over the world. I mean, if you’re in Bavaria, by all means go to a Bavarian place for lunch instead of one of the ubiquitous sushi stalls.
I thought my latest guest, Tom Stewart, CFO of MultiFactor Authentication out of Irvine, CA, would be thrilled, but it turns out he spent two years working for Intel in Munich, so he’s been there and done that. Which is okay, because it gave us more time to get down to basics about his company’s strategy and products.
Tom is in the business of making security tokens obsolete. I know you’re going to hate this if you just gave a pile to RSA or Verisign, but MultiFactor believes that hardware-based strong authentication is poised to go the way of the dodo.
Of course, software tokens have been around for quite awhile, but they are often considered to be weaker than hardware tokens, or else they require some fancy PKI architecture to make them safe enough for serious corporate use.
Well, think again, Tom says. His “SecureAuth” system sits inside the firewall and handles full bidirectional X.509 authentication for apps and other systems without any tokens or PKI infrastructure and, more importantly, at a fraction of the cost. The system used to connect the client with your company network is proprietary, but it uses SAML or any other system you want to use to connect to outside applications or SaaS providers. Just how they do it and whether it really works the way they say it does is beside the point here, but readers are invited to visit their website at www.multifa.com for a free online demo and as much nerdy prose as you can stomach. (Tom is a marketing guy, but he is apparently surrounded by a team of true, dyed-in-the-wool techies.)
Personally, my attention perked up when Tom began to describe the way SecureAuth acts as a kind of gatekeeper for Active Directory (in 90 percent of cases, he says) or any other directory service you happen to be running.
This seems especially exciting to me when you consider it in terms of Cloud Computing, where we are seeing a rash of new cloud-based identity services. Bob Blakley of Burton described what he calls the “ability to build a virtual identity provider using a multitude of different services”. At the Catalyst Conference in San Diego a few weeks ago, he expressed his surprise that, unlike what everyone was expecting, providing identity services for the Cloud wasn’t turning out to be “this big monolithic thing”. Instead, the market is building a set of small specialty firms that handle identity tasks and offer discrete billable units that companies can put together. Ping, for instance, integrates PingConnect with Google Apps so a user’s Google ID can be used for single sign-on across some 60 online services.
Sourcing your identity management may appear to make good business sense, but does it really? After all, companies are sourcing just about everything else related to their IT. But Tom believes, and I agree, that identity management is the last thing you want to see going out the door. “As long as you control the directory, you control everything”, he maintains. Letting external service providers make changes or allowing them to make copies of your directory, which some do, is simply asking for big trouble.
My feeling, and it’s nothing more than that, is that companies will be very cautious in moving towards the cloud, choosing a step-by-step approach rather than taking the sudden plunge. As much as small and medium-sized enterprises would love to say goodbye to their IT and concentrate on their core business, they should draw the line at their directory, be it active or otherwise.
In fact, you could probably make a case for keeping only your directory and sourcing everything else, but then what is the poor CIO to do? Anyway, directory services might actually prove to be the Last Man Standing as corporate IT gradually disappears into Cloud-cuckoo-land.
More than 250.000 people have watched “ethical hacker” Chris Paget cruising the streets of San Francisco gathering RFID data from the new U.S. PASS cards and “enhanced” chipped drivers licenses. All it took him about $250 for a scanner and an antenna, as well as a piece of software he downloaded from the Internet. The new “e-passports” are now mandatory for U.S. citizens entering the United States from Canada, Mexico, Bermuda and the Caribbean, though conventional passports will be accepted as long as they are valid. Paget was able to read and clone the information of the chips within minutes. While only tag numbers were intercepted, not the personal data on the chip, this is enough to identify and track individuals, which brings us a step closer to my favorite nightmare scenario: As I leave the airport in, say, Tunis or Cairo on my way to a nice sunny vacation I am picked up and followed by jihadists bent on killing any American capitalist swine they can find.
This may not be news to most of us, but what struck me was a comment by Gigi Zenk, a spokeswoman for the Washington state Department of Licensing, quoted in today’s edition of the “International Herald Tribune”, who believes that “Americans aren’t that concerned about RFID” in a time when “tracking an individual is much easier through a cellphone.”
Is this simply a brainless bureaucrat talking twaddle, or is she being cynical? Then again, maybe she has a point: If people did care a lot about “little brother”, as the global surveillance web is now being referred to, wouldn’t they do something about it? Like switch off their mobiles?There have been rpeorts of German tax dodgers being caught because they said they were at home when in fact their phones were in the offices of a bank in Zurich.
In Germany, supposedly a country obsessed with privacy concerns and boasting the strictest data protection laws on the planet, a law calling for issuing RFID-enabled passports passed with hardly a murmur, and they are now gearing up to issue each and every one of their 80-some million citizens a mandatory personal ID card that will also carry a chip.
Maybe cynicism does help. How about this: If everybody is naked, nobody will be bothered by nakedness. Just blend in with the crowd. Implant an RFID chip in every forehead. There’s safety in numbers, after all. Or then again, maybe not…
The Personal Data Eco-System (diagram by Iain Henderson and Drummond Reed)
Another reason I really love Twitter: It takes you places you might never have found on your own. Take a recent post by xmlgrrl, a.k.a. Eve Maler of Sun Microsystems, a terse pointer to a posting by Iain Henderson of Mydex on rightsideup.net entitled “The Personal Data Eco-System” which provides by far the best theoretical overview that I, at least, have seen on the true nature and function of personal data.
The text is an abstract of a session Ian and his pal Drummond Reed of Concordance, who is also a trustee of identitycommons, held at a recent West Coast VRM Workshop and which is also intended as an introduction to the Kantara workgroup where they hope to explore these scenarios more deeply. The focus of the piece is on what Iain and Drummond describe as “Personal Data Stores”, a slightly confusing term for a kind of data warehouse in which to store all the personal data available about me (or you) so that it can be used for anything from paying a credit card bill to scheduling a doctor’s appointment or even planning a home move.
But where it gets really exciting is when the two start to discuss what kind of data there is about me (or you) , what the relationship is between the different kinds of data and how they interact. Basically, they divide all personal data into five categories:
My Data (information about me that I, and only I, own and control)
Your Data (information about me that someone else – e.g. an organization or the government – owns and controls)
Our Data (information about me that is accessible to both me and them, e.g. buyer and seller)
Their Data (information about me that is owned and sold by third parties such as a credit card company)
Everybody’s Data (information about me that is in the public domain, e.g. my postal address or an electoral roll)
Iain and Reed have created the absolutely fascinating flower-like Venn diagram pictured above explaining how and where these separate sorts of data intersect to create what they describe as a “Basic Identifier Set” in the middle. This for them is the “core personal identity data and they believe it will enable a working “personal identity eco-system” for providing services and ensuring transactions sometime in the future, with the individual functioning as the “un-knowing point of integration” of data about themselves.
They describe in detail the various dynamic flows of data between the different categories, such as from My Data to Your Data where individuals provide information about themselves under certain conditions (think the “tick boxes” on web forms indicating whether I want to receive your newsletter if I buy your product) or from Your Data to Their Data as an organization shares information about me with another organization, something which can happen legally (as in identity federation) or illegally (then it’s called identity theft).
I find the Henderson/Reed Diagram an extremely illuminating intellectual achievement since it illustrates the huge complexity involved in addressing issues of identity, both digital and analog. I’m not so sure whether I agree with Iain’s conclusion and forecast that over time (“in 10 years”) some 80% of customer management processes will be driven from a “My Data” perspective. He argues that the rush for user-generated content, as well as economic reasons, will cause organizations to move to a user-controlled model of identity management.
Well, I’ve been around long enough to know you can multiply a given prognosis involving a ten-year timeframe by a factor of between two and ten and still wind up way out in left field. But I do think they are right in assuming that there is a business case for moving towards user-controlled identity. Whether it will be, as they suggest, that allowing a vendor to mine my Personal Data Store for my consumer habits, and especially my buying intentions, will be incentive enough, or whether the prevalent model will be a simple upfront deal – give me your personal information and I will give you a rebate or cash in hand – I don’t know, but until we find out it might be a good idea to contenplate the wonderfully symmetric flower petals of the identity eco-system diagram and ponder it’s implications.
Just got back from my favorite neighborhood watering hole in Munich, the Cafe Wienerplatz, where I met with Soeren von Varchmin, who recently moved in next door after spending a few years in Seattle.
Soeren is VP SaaS at Parallels, a company that describes itself as “worldwide leader in virtualization and automation software that optimizes computing for consumers, businesses and providers”. His job is to bring together Internet Providers and Services Providers (ISVs) by providing a common plattform to provision, manage and integrate applications and services over the Internet. His vision is to create a large-scale cloud computing ecosystem where software vendors and cloud operators together deliver a wide variety of services to businesses and consumers.
To achieve this goal, Parallels has written what they call the “Application Packaging Standard” (APS) which they describe as a new application packaging format designed to help implement a Software-as-a-Service (SaaS) business model. I guess you could call is “SaaS 2.0″ (or maybe “ASP x.0″), because it enables almost all industry hosting providers – Parallels’ traditional customer base – to team up with almost any application provider to offer their apps as a rental web service.
Once packaged in the APS format – basically just an XML feed – by a software vendor, an application can be easily “plugged” into an infrastructure of any hosting provider that implemented the standard “socket” for the APS applications.
Soeren thinks this is a real win-win situation, since it gives hosting providers a new, higher-value business model while providing a new distribution channel for ISVs. Parallels is touting their standard as an open plattform, and rumor has it that they will be founding a non-profit organization to push the specification in the public domain., so check out their website at www.apsstandard.org for updates.
I know it’s funny, but in fact it’s me, by far the oldest guy at KCP, who is actually the greatest fan of Twitter. Perhaps if you don’t have as much time left to waste as some of my younger colleagues you learn to appreciate abbreviation.
Anyway, the European Identity Conference which ended yesterday here in Munich produced a bumper crop of Tweets which I have been browsing through this morning at my leisure (first time in a week I’v had any), and I thought I would share a few with those of you who do not yet fully appreciate just how powerful this new medium actually is.
Summing up of a large multinational conference like EIC running over many days and featuring some of the finest speakers in the industry, and doing this in a format that restricts the writer to 140 characters max, is a challenge, of course, but many of those present not only rose to it, but proved themselves past masters of terse, to-the-point, no nosense (well actually, sometimes a bit of nonsense) communication.
Recently, at a press briefing by German IBM boss Stefan Jetter who waxed enthusiastic about Cloud Computing, an elderly journalist rose and asked him a show-stopper: “Where are my data when they’re out there in the Cloud?” Jetter did a double take, but my colleague pressed on: “I mean, physically, where are they?”
Of course, the answer is: On some nameless server somewhere, anywhere in a grid farm in Ohio or Dublin or… In fact, the usual answer is : Who cares?
Well, for one the German privacy protection agencies. Passing data across national boundaries can be a federal offense not only here. The EU Data Protection Directive (officially Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data) mandates that personal data may only be transferred to third countries if that country provides an adequate level of protection – something the U.S., just to name one, does not, at least not according to European standards, especially since foreigners do not benefit from the US Privacy Act of 1974.
