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Aiming to resolve a vexing security problem presented by user names and passwords, Palo Alto, Calif.-based startup Nok Nok Labs launched on Tuesday with $15 million in financing. Next month, Nok Nok will start shipping software that will allow users of PCs and mobile devices to identify themselves to online-banking systems, e-commerce sites, and other online operators using fingerprint scans, voice recognition, photo ID, or other applications native to their device, according to Phillip Dunkelberger, Nok Nok’s chief executive.
At the same time, Nok Nok is part of a group of six companies, including PayPal Inc., that launched on Tuesday the FIDO Alliance, a group that looks to replace user names and passwords with stronger forms of authentication. FIDO, which stands for Fast Identity Online, is working on standards that would let various authentication methods work with any device.
Dunkelberger, a former Xerox Corp. and Apple Inc. executive, says Nok Nok already has aroused interest in its server and client software from about 100 companies, though it’s likely far fewer than that will be among the first buyers. “We have a controlled launch target, only 10 to 15,” he says. “We’ve put in a good 14 months of coding. We want to be sure this product survives the first contact with the client community.” The first applications of the product, he adds, will be in securing “high-value” electronic transactions.
Passwords and user names, which most online-banking and e-commerce sites rely on to identify customers, continue to lose value as security tokens as a result of data breaches and consumers’ habit of re-using the same credentials across multiple sites. “They’re especially weak authentication tools, especially for the world in which we live,” says Alphonse R. Pascual, senior analyst of security, risk, and fraud at Javelin Strategy & Research, Pleasanton, Calif. “With any solution that replaces passwords, I’m all for it.”
Nok Nok’s software generates a score to indicate the degree to which a particular scan matches the consumer’s chosen biometric, such as a fingerprint or voice pattern. Dunkelberger says there are few limits on the biometric identifiers it can support. “It’s everything that can be used as an identifier that ties to a human being,” he notes. While the client solution is free, Nok Nok will charge a per-user or per-transaction fee for its server software, Dunkelberger says without going into detail.
The key to success for Nok Nok (the name comes from the familiar “knock-knock joke, which includes the line, “who’s there?”) will be enabling that broad range of identifiers in an easy and convenient way for consumers, Pascual says. He points out that previous efforts to replace passwords with, for example, fingerprint scans faltered because not all devices could support such technology. “This [Nok Nok technology] gives consumers the option to use alternatives like facial recognition or voice,” he says. Up to now, he adds, “nobody’s got it all on the same page and made it easy.”
The startup will have a lot of potential “if they can bring it all together,” enabling a the authentication method a particular consumer can use on the device he happens to carry with him, Pascual says, citing as an example the number of smart phones now in circulation with front-facing cameras.
And, while the emphasis is on e-commerce transactions, Dunkelberger says his company’s product will work with face-to-face transactions as well, for example, to replace a PIN in a card transaction. “People who are trying to mitigate large amounts of fraud, people who are under regulatory pressure and have had data-breach problems, those are the people who get it,” Dunkelberger says, referring to potential clients that are most likely to respond to Nok Nok’s solution.
Nok Nok’s backing comes from Onset Ventures and Doll Capital Management, both based in Menlo Park, Calif.
