Security Checksum is a technical financial application, designed for the iPhone as a proof of concept, to shed some light on the fundamentals of the most commonly used security identifiers while emphasizing check digit generation. The application makes use of Luhn's (modulus 10) Algorithm to generate/validate the check digit on key security identifiers.
The algorithm was developed by IBM German computer scientist Hans Peter Luhn in 1954 (U.S. patent granted in 1960). It consists of a simple checksum formula used to validate a variety of identification numbers and protect against accidental errors. The algorithm is in the public domain and in wide use today by credit cards and government identification numbers as a simple method of distinguishing valid from mistyped or otherwise incorrect numbers. It is capable of detecting any single-digit error, in addition to most, if not all, transpositions of adjacent digits.
The application provides a brief overview on the industry's most common security identifiers (i.e. ISIN, CUSIP, and SEDOL), and prompts the user to either submit a complete security ID in which case the check digit is validated, or submit an incomplete security ID for which a valid check digit is generated. The application also makes the connection between CUSIPs and SEDOLs on one hand, and ISINs on the other hand, backing out one from the other when possible.