A Canadian provider of leading-edge communications technology is starting to make its mark with banks that want to improve the security of their internal data flows.
TimeStep Corp. of Kanata, Ontario, has developed a technology that enables banks and others - such as medical professionals and government agencies - to build secure "pipes" through which they can exchange data over the Internet.
Company officials say their system can replace dedicated telephone lines, which many companies lease at great expense to ensure security in data communications.
"The products we develop are both hardware and software that drop into existing networks and allow you to create these virtual pipes, these virtual private networks," said Tony Rosati, a TimeStep founder and vice president of marketing.
"If you can create this secure pipe between two companies, you're golden," Mr. Rosati said. "You can do your business as you always would."
TimeStep, an affiliate of Newbridge Networks Corp. of the United States and Canada, has sold its product to Bankers Trust Co., the Bank of Canada, and a third bank that does not want its name disclosed.
Citing security concerns, neither Bank of Canada nor Bankers Trust would comment on how they were using TimeStep's product.
But analysts familiar with TimeStep's system predicted its popularity will grow.
"This is an exploding market, so these guys will probably have more business than they can handle," said Iang Jeon, a senior analyst at Forrester Research Inc. in Cambridge, Mass.
Mr. Jeon said TimeStep's product is valuable because it is "transparent" and does not require companies to reconfigure their computer systems.
"What corporate users of this technology want to do is to roll out secure networks without having to recode all their applications," Mr. Jeon said.
Mr. Rosati said TimeStep, which was formed as a consulting firm in 1991 and began developing products in 1993, began by creating secure systems for the Canadian government - including the central bank - and for hospitals. The company's system, he said, enables medical professionals to share sensitive data about patients and government officials to circulate classified information.
Traditionally, Mr. Rosati said, banks and other companies with multiple offices have leased dedicated lines from telephone companies in order to ensure the privacy of their transactions. But those lines, he said, are expensive and may be used infrequently.
By working with TimeStep, Mr. Rosati said, companies eliminate the monthly expense of a leased line.
A sample use of the product, Mr. Rosati said, would be to shield a company's payroll records from prying eyes. "With our client/server software, you can create a virtual private network so only the finance people have access and the rest of the organization doesn't," he said.
Unlike a "firewall," which places a one-way shield on Internet communications, TimeStep's product creates two-way security: Users can both transmit and receive information privately over the network.
Last month, TimeStep formed an alliance with RSA Data Security Inc., the California-based leader in commercial encryption systems, to develop a related technology. Known as S/WAN (secure wide-area network), the system will enable banks that already have firewalls and other security methods to convert them into virtual private networks.