AUSTIN, Texas - When members of Austin Federal Credit Union apply for a mortgage loan, they sometimes get a little something extra to help with the paper chase involved in taking that process to a close. They get a CryptoStick, a flash drive with built-in encryption software that allows the member and the CU to securely transmit documents electronically until the member comes in to finalize the deal. "We do that for our members who live some distance from the credit union. We charge in the loan a dollar amount that they get credit for if they return the stick when they come in for the signings, or they can just keep it," says Bryan Warren, a board member and treasurer of the $20 million CU (www.austinfcu.com.) Unlike most portable USB storage drives, the CryptoStick has self-contained software that doesn't require installation on the host computer to password-protect the data. That's a selling point to users at corporations and other organizations that restrict loading of software onto individual PCs, says Jeff LeRose, CEO of the CryptoStick's maker, Research Triangle Software (www.cryptostick.com) in Cary, N.C. The company sells CryptoStick through TigerDirect and other national outlets and also includes on its client list government agencies keenly interested in securely locking down transportable data. "One of our first clients was U.S. Army Special Operations," LeRose says. The encryption algorithm used by CryptoStick to encrypt files is the second strongest known, LeRose says. "The first would take about 12 years to break. This one takes about seven, so unless you're with the NSA, you don't have much to worry about," he says. What you do need, however, is either a CryptoStick or the free downloadable decoder software that allows recipients of a CryptoStick-encrypted file to open and use it, assuming they have the password. The devices range from 32KB to 4GB in capacity, with the biggest seller is the 2GB model that sells for about $250 street price, LeRose says. That's not a lot of room for storing photos and music, but for compressed Excel and Word documents, that's room for a lot of files, LeRose points out. Austin FCU uses the 512KB version, Warren says. In addition to using them for mortgage and home equity loans, board members use the sticks to secure minutes and other documents that often contain member names, account numbers and other private information. The sticks require a bit more clicking and tech knowledge to use than the typical flash drive, but "so far we haven't had any complaints," says Warren, a 35-year federal employee who now works in electronic commerce himself. "Most of our members are from high-tech environments anyway, and we already offer more electronic services than a lot of credit unions 10 times our size." Next up for the CryptoStick will be one-click encryption capability as well as anti-spyware and anti-virus software, LeRose says. He also sees a growing market for products like his. "Last year only about 2% of the people were concerned about security with USB devices. This year's it's like 30% already," LeRose says. -

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