Computershare co-founder Tony Wales and trucking magnate Ian Cootes are among those to have poured $100 million into an Australian-made cyber-security platform that is now being piloted after 17 years in development.
Where that invention took existing interbank communication protocols and applied them to the airwaves, VeroGuard seeks to apply them to the internet. "Our technology is indecipherable when two switches talk to each other," the CEO says of the technology he patented in 2003. "There's no known source of encryption – it's impossible to hack."
However, he says he initially grew frustrated with trials involving his technology, which attempted to secure internet banking – the problem being the internet itself. "The internet was built not to be secure. There is no identification layer on purpose, as it was designed for sharing everything," he says. With no immediate prospect of serious revenue from securing banking applications, in 2016 the technology was pivoted to tackle a bigger problem – that of assuring identity for all online transactions.
Cyber crime will cost the global economy $US10.5 trillion ($14.4 trillion) annually by 2025, according to a report this month from California-based research house Cybersecurity Ventures. It found an identification breach was at the heart of 85 per cent of online thefts.
To try to prevent such breaches, the CEO says he took his technology back offline, and armed it with hardware. VeroGuard developed what it calls a "personal high security card" or "Verocard"', which resembles a small pocket calculator, and is set up using Australia Post's identification protocols.
Users enter their assigned PIN numbers when prompted by an application they are trying to access. Microsoft 365 is already integrated with VeroGuard, as is a tender management platform from Morton Blacketer, which co-ordinates tenders for state governments around Australia.
The technology removes traditional passwords and online identity problems, and guarantees a user’s identity online. This technology should not be comparied with the two-factor verification now offered by most online banking portals, where an SMS code is sent to a customer's phone.
"People suggested we put VeroCard inside the phone, but the phone is the mother of all evils when it comes to cyber security," VeroGuard CEO says. "The fact that the phone is not secure is why online banking fraud is such a problem."
The VeroCard last month received the highest security certification available from the US-based Payment Card Industry Security Standards Council, which VeroGuard claimes validated its "ultra-secure credentials".
A couple of hundred VeroCards are in circulation on a pilot basis, and after winning $14.2 million in grants and loans from the SA government, they are being made by re-trained automotive workers on a 30,000 square metre site in Adelaide's Edinburgh defence industries precinct.
However small businesses are another target market because they are seen as a soft target by hackers.
"SMEs don't really understand all the cyber security products out there, but a piece of hardware that offers them military-grade protection should cut through," says Nic Nuske, a former IBM executive hired to help commercialise his pivot into identity verification.
"Coming from IBM, that kind of development cycle is not unusual," he says.
"This is not just another app."
Michael Bailley - 23 November 2020