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With identity theft being an ongoing and growing issue worldwide,
StrikeForce Technologies, Inc. (SKFT) has developed a unique suite of security products
that allows you to choose the method(s) of verification and authentication, offering
multi-factor protection now and in the future
Technology
Business Software & Services
(SKFT-OTC: BB)
StrikeForce Technologies, Inc.
1090 King George’s Post Road
Suite 108
Edison, NJ 08837
Phone: 732-661-9641
Mark L. Kay
Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
February 23, 2006
BIO:
Mark L. Kay, Chief Executive Officer
Mark joined SKFT in May 2003. Previously, he was an established leader, CIO and Managing
Director at JPMorganChase & Co. over the past 25 years. During his employment at JPMC
he led strategic and corporate business groups with global teams up to 1000 people. His
responsibilities also included Chief Operating Officer and Global Technology Auditor
during his tenure. His business concentrations were Securities (Fixed Income and
Equities), Proprietary Trading & Treasury, Global Custody Services, Audit, Cash
Management (including Money Transfer and Demand Deposit), Corporate Business Services and
Web Services. Prior to JPMC, Mark was a Systems Engineer at Electronic Data Services (EDS)
for over five years, where he developed his technical and people skills. He holds a B.A.
in Mathematics from CUNY.
Company Profile:
About StrikeForce Technologies
StrikeForce Technologies, is a company that helps protect everyone – consumers,
corporations and government agencies – in real time against identity theft and fraud
at almost every access point. Its total protection solution strengthens companies’
defenses against the critical points of fraud: when accounts are opened, when
they’re accessed, when they’re changed, and each time there’s a new
transaction. StrikeForce Technologies is trading on the OTC bulletin board (SKFT), is
headquartered in Edison, N.J., and can be reached at www.strikeforcetech.com or at (866)
787-4542.
CEOCFO: Mr. Kay, what
was your vision when you joined the company and where is StrikeForce today?
Mr. Kay: “I joined StrikeForce about three years ago
after approximately 26 years at JPMorgan Chase & Co. (NYSE: JPM), where I worked as a
Managing Director the majority of the time. However, I saw a great opportunity when I
joined StrikeForce. They asked me to invest initially. After discussing my strong
corporate background and after learning what StrikeForce was all about and their current
plans as a software company to help prevent identity theft, I was very impressed with them
and they were impressed with me and asked me to join as their CEO, for which I was excited
about. StrikeForce’s vision at that time was to complete a suite of security products
that prevent identity theft unlike anything we were aware of in the marketplace. We
completed developing the majority of the authentication platform and started selling and
implementing the products in late 2005 after a solid year of testing. Our vision is to be
an all-purpose software product company that helps prevents identity theft that allows
companies to choose the methods of authentication combined with validation and protection.
We cover quite a range of products and methods of authentication and our vision is to
continue to build out the platform as we see the needs arise and as the cyber thieves
evolve their technology methods of stealing your identity. We can accomplish this with
speed and flexibility, since we have a validation, authentication and protection platform
with many products, versus only one product for one specific solution and market.”
CEOCFO: What is it that
StrikeForce understands that sets you apart and gives you the capabilities you have?
Mr. Kay: “What sets us apart from the competition in
regards to developing products that help prevent identity theft, is based on the talents
of our management team, especially our inventor and CTO, Ram Pemmaraju with eleven years
of experience from Bell Labs and Bell Core and a mind set of developing simple unique
products and a platform with multiple products that can evolve over time. Many early
solution vendors saw an opportunity, built a product or two for the most part and gained
market share and are successful. However, my experience in building brokerage and other
business systems at JP Morgan taught me that you want to build for the future while being
able to process for the present. StrikeForce developed a solution and overall strategy
that was not for any one product, but for the business of preventing identity theft
overall across every aspect for eCommerce, corporations, the government and consumers
globally. We saw the vision of allowing hard tokens and soft tokens, biometrics and
combining the credit bureaus type of validation process, in terms of asking questions
about people, combining validation with authentication to allow automated registration for
authentication, potentially reducing the costs of the call desk or help-line. Therefore,
it can result in a strong and quick ROI. Combining what the credit bureaus do along with
what the authentication product companies provide, and being able to work with biometrics,
tokens or even our own proprietary phone ”Out-of-Band” solution, for which we
have patents pending, is what makes StrikeForce a total solution that every consumer and
corporation must consider. StrikeForce once again provides validation, protection and
authentication, all on one platform and allows choices and flexibility for the companies
and corporations we sell to; they can pick and choose the methods that make the most sense
for them. They could even add method(s) in the future when the next best method becomes
available for authentication that most likely will work on our ProtectID™ platform,
usually within a short period of time through our standard Application Program Interface
(API), where most of our competitors would have to reinvent themselves and rebuild some of
their solutions or partner with a company like us to allow new authentication types to
work.”
CEOCFO: To whom have you
been selling and how do you expand your reach?
Mr. Kay: “We are selling to eCommerce, corporations,
government agencies and now direct to consumers. Our focus has primarily been financial
services and eCommerce, moving to an emphasis direct to consumers as we complete our new
Websecure™ product that I will describe later. When I say eCommerce, I am referring
to companies that process various types of online real-time transactions across the
Internet and typically don’t ever meet their consumers, therefore they need strong
methods of validation followed by authentication that we provide without having to deploy
any software or devices. We combine our validation product (VerifyID™), which
asks questions on your background similar to what the credit bureaus can provide,
with our authentication product (ProtectID™). This is a strong way to validate
the consumer is who he/she says they are and then automatically register the consumer for
authentication, which will then authenticate him/her at the time of completing a
transaction.
The eCommerce space is an exciting market for us. We have over six contracts that are
transaction based for which we provide a hosted service at Panasonic, so
StrikeForce’s eCommerce clients do not have to deal with implementing or supporting
our products; they just need to access them. In the financial services market, we have a
great opportunity and have clients and pilots in place. In financial services, they use
our products for their employees to have access to their company website and confidential
data or their applications and for their consumers, to protect them as they sign into the
company’s customer website and or when processing financial transactions. Our clients
decide how and when the validation and authentication products will be used and to what
extent. StrikeForce’s products could be leveraged in every market across the globe;
wherever there are requirements for having validation and or strong authentication, beyond
your basic name and password.”
CEOCFO: What is the
competitive landscape and how do you reach your potential customers?
Mr. Kay: “The competitive landscape is large and there
are probably hundreds of competitive vendors; anyone who sells any validation product,
which includes all the credit bureaus and anyone who sells any kind of authentication
product, which includes all the biometric companies, token companies and passive
methodology companies. At the same time, not any of them provide, to the best of our
knowledge, what our suite of security products provide across our total platform,
including two and multi-factor authentication solutions with combined automatic
verification capabilities. In an article a month or so ago in USA Today about Cyber
Thieves, five companies including StrikeForce were mentioned that help prevent identity
theft, in which case three of the five companies mentioned are our partners, since
together our capabilities are stronger and provide one stop shopping for the clients. For
example, the new FFIEC “strong guidelines” requires the banks to have stronger
two-factor authentication and recommend “Out-of-Band” for their consumers using
their Internet banking services, by the end of the year 2006. Many companies have some
methods of validation, and are looking to partner with vendors like StrikeForce to add
stronger, yet easy to use two-factor authentication for the average consumer, for which we
anticipate concluding a co-marketing arrangement with one of them very soon. StrikeForce
is strategically planning to increase it’s clients nationally and internationally by
increasing it’s distribution channel; we are not planning to become a large company
per se in respect to the number of employees, but rather leverage the channel to aid us in
increasing our reach and revenues globally. Currently, we are also focused on direct sales
for this year, which also paves the way for the channel to become more successful in the
future. An example of building the global channel is a recently signed agreement
with a large known distributor in security solutions in Asia. This is in line with our
global strategy for distributing our products and being able to support them on a
worldwide basis without the cost of building and maintaining our own offices around the
world.”
CEOCFO: Is identity
theft as big a problem worldwide as it is in the US?
Mr. Kay: “Identity theft is one of the few problems I
have seen that is increasing globally, thanks to the Internet. The more we talk to our
relationships in Asia, the more we learn that they feel it is a bigger problem in their
region. I am finding that when we talked to various groups across Europe and South America,
each thinks it is a bigger problem in their country or region than the other. Everyone
recognizes it as a major problem and it is hard to say which countries or regions are
worse off than others. I believe identity theft is
universal and part of what makes it universal is that it is occurring through the
Internet, which has no boundaries. One scheme has been noted to have origins in
Eastern European countries; it is a worldwide problem effecting over 50 universities in
the USA. Everyone is recognizing identity theft is global and all regions across the globe
seem to be starting to take stronger action relating to stopping identity theft. Many
countries are looking for solutions to one degree or another and some are developing
regulations. It is an endless market for us and a big problem for the world that is only
going to grow as technology continues to advance and we can be sure that will occur.”
CEOCFO: You recently
became a public company; how does that change StrikeForce?
Mr. Kay: “Being a public company takes more effort and
money, as everyone knows. At the same time, we see it as a critical step in our success in
developing a company and in supporting our investors and shareholders. We feel it is a
great opportunity to be out there in the marketplace during a time when identity theft is
so hot. Identity theft is a continuous problem that is growing exponentially, so public
awareness is expanding globally. I give various talks at seminars and universities and
every time I ask the audience if they have been affected by identity theft, a growing
percentage of the people raise their hands; the percentage of raised hands is close to
100% as of late. People are looking for solutions in the corporate world as well as
consumer markets and they want protection NOW.”
CEOCFO: Will you tell us
about your revenue model?
Mr. Kay: “We have multiple revenue streams since we work
with different types of clients across multiple markets. In the corporate enterprise
market, where the corporations use our services internally, we price everything through a
one-time price for each seat. They purchase the software with the appropriate products
depending upon how many seats and they pay for it upfront, operate it, service it and pay
the standard yearly maintenance fee . In the eCommerce market, including processors,
gateways and merchants, they pay a one-time set-up fee and recurring transaction fees
through the use of our managed services Application Service Provider (ASP). In respect to
Financial Services, we have developed a “Protect-As-You-Go” pricing model, which
provides greater flexibility requiring firms to pay a small monthly fee or transaction
fees for their consumers with minimums as appropriate based on bundles purchased. This
model also includes an annual maintenance fee. In all markets, our prices are very
competitive. In terms of our financials, we are on a calendar basis. We closed the fourth
quarter in December and our annual report on Form 10-K will be available shortly, until
which time I cannot discuss the specific numbers.”
CEOCFO: Why should
potential investors be interested and what do people often miss about the company that you
would like to convey?
Mr. Kay: “Potential Investors always like to hear the
strength of our Management Team. Once again, I got involved initially as an investor and
secondly as the CEO. Having been a CIO, COO, Global Technology Auditor and with other
responsibilities at JPMorgan over 25+ years, I always looked for solutions that solve the
current and near term future requirements of the firm. Across the Management Team we have
over 80 years of professional experience across sales, technology, design, engineering,
management, banking, securities processing and accounting. We know that identity theft is
growing and is constantly evolving in respect to the methods fraudsters are using to steal
your identity, therefore requiring the methods of validating, protecting and
authenticating your identity to evolve and strengthen, hopefully at a faster pace. You do
not want to have to develop or buy a new product every time there is a new threat.
StrikeForce’s products currently help prevent most if not all of the threats from
becoming problems with our current suite of security products. StrikeForce’s software
platform is able to evolve as new authentication methods and devices become available,
because of our standard Application Program Interface (API). We see this as a major
competitive advantage, and since we have three patents pending, we have a strong edge and
lead-time in the marketplace.
In the enterprise market, tokens with the phone “Out-of-Band” authentication as
a backup for redundancy is becoming very popular. Having alternatives and backups and
pricing the combination less than some of the competitors’ primary products, we see
this as a great opportunity for StrikeForce. We definitely see identity theft getting
worse and even though many people feel they just will not do transactions over the
internet, we believe over time there will not be an option. A simple way to determine that
is to look at our sons and daughters who typically, including mine, do everything on
the computer; I am surprised they don’t get meals over the computer as of yet. That
is probably the future! Everything is computerized and more transactions will be processed
through the Internet and identity theft will therefore continue to grow rapidly. This
direction only strengthens StrikeForce’s platform strategy. There are other companies
that do similar things in part, but we have a strong competitive edge, with great products
that are simple to use and written up favorably by analysts and reporters in the media.
Our newest product, recently announced in February (2006) is an anti-keylogging program
that a consumer will be able to buy directly that will help him or her with a key-logging
program, which is a new method of identity theft that is increasing rapidly. We are
anticipating that WebSecure™, will be available for distribution in the second
quarter of 2006.”
CEOCFO: In closing, what
should readers remember?
Mr. Kay: “StrikeForce is very well positioned to achieve
our mission, which is “Protecting Corporations
and Individuals from Identity Theft Worldwide” with our total platform security
solution. Companies and consumers are starting to take notice and look for identity theft
solutions. In addition, the regulations to prevent identity theft are increasing and
strengthening, such as the Patriot Act, HIPPA, FFIEC and others. Everyone is taking notice
and we are there with strong validation, protection and authentication combinations. We
are bullish on our future and your security.”
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