BY PHILIP J. SCARFO, POLAROID BIOMETRICS SYSTEMS DIVISION

The Doomsday folks said the world as we knew it would end on December 31. They were right. But they were wrong about one important detail. We do have a future.

The end of 1999's intense focus on potential Y2K problems means we will once again have the time and energy to devote to the "next big thing." A majority of large companies' IT managers recently told Internet World that they will soon shift resources from Y2K to further developing e-commerce. Since they also reported spending almost eight percent of their 1999 budgets on Y2K remediation, it looks like substantial resources will be available for e-commerce projects next year.

Technology and the Internet have fundamentally and perhaps forever changed the way we do things. Traditional methods of personal identification have become totally inadequate. We now need to turn to new technologies like Biometrics, Smart Cards and Public Key Infrastructure (PKI) for personal identification in Cyberspace.

As more and more transactions go online, that is to say between machines rather than between people, neither the user nor the vendor can be absolutely sure about with whom they are dealing. The Internet is protected to some degree, yet statistics show that only 26 percent believe the World Wide Web to be safe. We've learned to protect the data but not the user.

We need new methods of personal identification in this next millenium online. And the greater challenge is to provide this added security in a way that does not further complicate our lives. Historically, we've relied on simple PIN numbers and passwords, but these methods have become far too easy to compromise and frankly, a major pain to remember.

A much better way is to use something that is truly unique, convenient to use and very difficult to lose or have stolen. The technology that offers this combination is gene-rally referred to as biometrics, and it takes advantage of the unique personal characteristics that we have with us every day. The truly great thing about biometrics is that there is nothing new to remember, nothing to lose and a biometric password is truly difficult to steal.

Combining biometrics technology with other smart devices will also make it possible to protect our identities and make it increasingly difficult for this new breed of electronic bad guys to invade our privacy.

E-commerce has absolutely exploded even with the limited security available. Some 38 percent of businesses are now doing business online - up from about 28 percent just a year ago. Over this same period we've seen an alarming increase in attacks on personal security. One can safely say that, "The only thing growing faster than the Internet is Internet fraud."

By some estimates over 1,000 identities are stolen per day in the U.S. The average loss is estimated to be around $40,000 per incident. Hackers are spending less time creating computer viruses and finding new ways to rip off innocent victims. Worse yet, these same people are sharing their secrets and have produced literally millions of pages of online help for those who would chose to create a fraudulent ID.

High cost and the lack of standards and infrastructure remain significant barriers to full electronic authentication. But smart cards and biometrics reader costs are falling fast. The recent move by American Express with their AMEX BLUE smart card represents a very important step into the next century for smart cards in the U.S. Microsoft's announcement of Windows® for Smart Cards will create an important new worldwide standard. Polaroid's introduction into the biometrics field with its very small and rugged fingerprint scanner will go a long way towards making these devices a viable tool in protecting personal identity.

The convergence of smart cards, biometrics and digital signature technologies will finally complete the electronic security chain. With these devices we can positively and reliably give a retailer or business a non-repudiated link between a transaction and an individual.

As we enter the new millenium we find ourselves at an important new crossroad. Once only seen in science fiction movies, today these technologies have become an affordable reality and let us identify ourselves with a simple touch of a finger.

The challenge for the industry leaders will be to continue to work together to create the standards, methods and keys to unlock the future. We now have the opportunity -- with the tools available - to offer a greater level of security, convenience and personal privacy. We have the responsibility to enable e-commerce by integrating these new technologies in a manner that will help fuel its continued growth. We have the obligation to insure that honest people have the right to an unprecedented level of convenience, service and privacy, while severely restricting those who would take unfair advantage.

And finally... we share the risk that failure to do so will only limit the remarkable potential that exists between now and the time that our focus shifts to concerns about Y3K.