BIOMETRIC CARDS – SECURE, SAFE AND SIMPLE ID FOR MASS MARKET APPLICATIONS Ralph W. Bernstein (CEO/CTO) Transatlantic Science Week 2011, Stanford University October 27, 2011

IDEX – THE ID OF YOU Mission: IDEX shall ensure secure, safe and simple use of your personal ID Business: IDEX delivers world leading fingerprint biometrics technology and products 2

Summary and outline About IDEX Identity fraud and theft – an immense problem Multifactor authentication On-card fingerprint systems IDEX Smartfinger ® technology Sensor volume production Conclusion 3

IDEX at a glance Based on patents and development at SINTEF from 1997 Headquarter at Fornebu (Oslo), Norway, Asia sales rep in the Philippines Public, listed company – More than 1,200 shareholders – Listed at Oslo Axess market place of Oslo Børs (the Oslo stock exchange) since 10 March 2010 Staff – 9 persons in Norway – 5 contractors working at IDEX premises – 4 positions in recruiting 4

IDENTITY THEFT – AN IMMENSE PROBLEM

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Identity theft Increasing rapidly Substantial cost and losses: USD ~45 bn in US USD ~25 bn in Europe Are chip cards secure? 7

The Internet of Things: Connectivity anytime and anyplace for anything Imagine a future where physical objects, things, have identities, virtual personalities and communicate using intelligent interfaces. The Internet of Things links the objects and beings of the real world with the virtual world. 8 Network

Added security is needed Added security by multifactor authentication: – Something you have – Something you know – Something you are Fingerprint biometrics – Everyone has a unique fingerprint – Reliable and secure recognition – Compact, low cost and low power, readers 9

IDEX; THE ID OF YOU The IDEX SmartFinger ® technology adds security and safeguards your privacy With the fingerprint sensor on the card, the owner is linked uniquely to the card just with a swipe of the finger Biometric cards bring fingerprint ID to mass market adoption ID OF YOU 10

On the political agenda in Norway 11 NorSIS - the Norwegian Centre for Information Security - suggests study on fingerprint sensors for national ID documents Letter to Department of Justice Media picked up the issue Dagbladet, 26 February 2011.

ON-CARD FINGERPRINT SYSTEMS

Fingerprint verification 13 Fingerprint image capture Fingerprint template generation Store in database Fingerprint database Fingerprint image capture Fingerprint template generation Matching Yes No Enrollment Verification

14 Challenges for introduction of fingerprint ID in mass markets 1.Convenience and usability 2.Privacy – Centralized fingerprint databases – Secure data handling 3.Fingerprint reader infrastructure: – ATMs? – Point-of-sales terminals? – Public offices? – Enterprise access systems? – Computers?

BIOMETRIC PASSPORTS AND ID CARDS 1.Fingerprint information stored on card 2.Fingerprint transferred from card to reader 3.Extraction and match on reader system Conventional biometric card systems Requires infrastructure of readers for enrollment and verification 15

Solution enabled by IDEX’ SmartFinger Film 1.Fingerprint template stored on card 2.Enrollment takes place at card 3.Extraction and match takes place on card Fingerprint information never leaves the card Does not require infrastructure for enrollment and verification 16 Biometric system-on-card

On-device fingerprint systems 17 Fingerprint image capture Fingerprint template generation Store in database Fingerprint database Fingerprint image capture Fingerprint template generation Matching Yes No Enrollment Verification

Biometrics system-on-card offers Added security and convenience - Fingerprint enabled - No PIN codes and passwords to remember Safeguarding privacy - Safe management of personal information - Fingerprint never deposed on external readers - Fingerprint never leaves card - No centralized of fingerprints databases Utilizes existing infrastructure - ATMs and terminals - Internet - Enterprise systems - Access gates Suitable for mass market applications 18 Display, secure chip or NFC Fingerprint reader (No biometric data is transmitted to or from the card) VALIDcard™ powered by IDEX

THE SMARTFINGER ® FILM TECHNOLOGY

The SmartFinger ® Film sensor Thin and flexible Unsurpassed image quality and biometric performance Designed for card integration Complies with ISO Card form factor Covered by IDEX patents 20 Sensing area; 0,05 mm thick Electronics; 0,35 mm thick Connector mm

The SmartFinger  sensor family Based on stat-of-the art polymer technology Thin and flexible - only 50µm thick Custom ASIC with a range of settings for and optimum performance Smallest software footprint for on-card authentication A variety of customizable geometries available Alternative I/O connections, – ZIF connector – Anisotropic Conducting Fluid (ACF) – Dual Flat No lead (DFN) package

Sesames Award Prestigious industry recognition of SmartFinger ® Film Presented ot IDEX at Cartes & IDentification 2010 exhibition in Paris Winner in Identification and ID Card category Awarded by panel of more than thirty experts and journalists 22

RAMPING UP TO MANUFACTURING

Sensor manufacturing Key manufacturing and assembly processes established Global supply-chain of manufacturing of components in place Successful qualification tests completed Ongoing ramp-up to volume production: – Transfer to high volume manufacturing and testing – Production yield optimization – Product qualification program – Cost reduction of core components 24

Polymer substrate manufacturing Manufacturing transferred to 24” x 24” panels Assembly of complete sensors directly on panel Up to3800 sensors per sheet 4 times the area of silicon wafers used in semiconductor industry 25

Sensor assembly, test and shipment Ionics EMS is IDEX’ sensor manufacturing partner 7 manufacturing sites in Philippines 55,000 square meters of production area 60 Surface Mount Technology (SMT) lines 1600 employees ISO , ISO14000 TL9000, TS16949 certified Recipient of HSBC’s “Asia’s 100 Best Companies” award 26

SUMMARY

Summary ID theft and fraud are immense challenges in the society Additional security factors required in financial, governmental, transportation and corporate markets Fingerprint verification is the obvious solution The IDEX biometric solution for system-on-card enables secure, safe and simple ID verification for the mass market IDEX is now fully dedicated to ramp-up to production Several important cooperation agreements closed More than 10 companies are designing SmartFinger Film into demonstrators, prototypes or products Customers’ target market applications represent substantial volumes. 28