June 1, 2004

OAKBROOK TERRACE, Ill., and BRUSSELS, Belgium, June 1, 2004 - VASCO Data Security International, Inc. (Nasdaq: VDSI) (www.vasco.com), the global number one vendor of strong user authentication products to the financial sector, today announced that HSBC Brazil (www.hsbc.com.br will provide VASCO’s Digipass GO3 to its business customers to securely perform banking transactions via the bank’s Connect Bank business internet banking application. The contract with HSBC Brazil is the result of the joint efforts of VASCO and its Brazilian partner, UserID (www.userid.com.br ).

HSBC Brazil’s customers transact high amounts of money via Connect Bank on a daily base. Securing the medium they use to perform banking transactions, is crucial.
HSBC Brazil chose VASCO’s Digipass GO3 strong authentication to allow its customers to use Connect Bank in a secure way.

Digipass GO3 is a lightweight, low cost strong user authentication token, especially designed for the large volume banking market. GO3 is extremely easy to use. With a simple touch of a button, the end user generates a unique one-time password. The password changes every 36 seconds and can only be used once. In order to access Connect Bank and to authorize financial transactions, the user must be in physical possession of his token. Digipass GO3 is VASCO’s answer to banks that want to give their customers a simple though secure means to use Internet banking applications.

In 2003, it is estimated that the Brazilian banking industry lost $ 30 million due to Internet Banking fraud schemes such as Trojan Horses and Phishing attacks. By offering Digipass, HSBC Brazil protects its customers’ transactions against fraudsters in a user friendly and cost effective way.

“We are honoured to have a renowned bank such as HSBC Brazil as customer” said Jan Valcke, VASCO’s President and COO. “VASCO is the worldwide Number One vendor of strong authentication products to the financial sector, with almost 300 banks as customers. With HSBC Brazil, we add a very important player in South America to our customer list.”

“Security and user acceptance were crucial for the success of our web-based Connect Bank business banking application,” said Jacques Depocas, Head of the Alternative Channels of HSBC Brazil. “VASCO’s Digipass GO3 is extremely easy to use and transforms the Internet into a safe place to perform banking transactions.”

About VASCO: VASCO designs, develops, markets and supports patented “Identity Authentication” products for e-business and e-commerce. VASCO’s Identity Authentication software is delivered via its Digipass security products, small “calculator” hardware devices carried by an end user, or in a software format on mobile phones, other portable devices, and PCs. For user access control, VASCO’s VACMAN products guarantee that only designated Digipass users get access to the application. VASCO’s target markets are the applications and their several hundred million users that utilize fixed passwords as security. VASCO’s time-based system generates a “one-time” password that changes with every use, and is virtually impossible to hack, or break. With over 11 million Digipass products sold and ordered, VASCO has established itself as a world-leader for strong Identity Authentication with 280 international financial institutions, approximately 1500 blue-chip corporations, and governments in more than 60 countries.

Forward Looking Statements
Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement containing words such as “believes,” “anticipates,” “plans,” “expects,” and similar words, is forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

Reference is made to the Company's public filings with the US Securities and Exchange Commission for further information regarding the Company and its operations.

For more information contact:
Jochem Binst, +32 2 456 9810, [email protected]