J. Scott Lowry, the president and chief executive officer of Digital Signature Trust Co., says he did not know "a digital signature from a slide rule" when he started exploring the digital security market four years ago.
But he proved himself a quick study of the intricate technology - and of positioning it for broad acceptance.
Last year was a watershed year for digital signatures, whose use in Internet transactions was legalized by federal legislation that took effect Oct. 1. And Digital Signature Trust, which aims to build a network of online trust, also took a major step forward by introducing, along with the American Bankers Association, a program to put banks at the center of issuing online trust credentials.
As banks begin adopting Digital Signature Trust's method of ensuring trust in electronic transactions, and as the company moves closer to its goal of ridding standard transactions of paper completely, Mr. Lowry, 56, is at the center of the action.
That position puts the former bank CEO a long way from the life he had chosen in the early 1990s. Then he was enjoying early retirement in Park City, Utah, where he and his wife could satisfy their passion for skiing.
The retirement had started in 1987, after Mr. Lowry helped form and then sold Canary Wharf Development Group, a real estate venture. Before that he had toiled in banking, first as a vice president in Chase Manhattan Bank's international lending department, and then, at the age of 37, as president and CEO of Great Western Bank, an Arizona institution that the old Wells Fargo & Co. bought.
Mr. Lowry emerged from his nine-year retirement in 1996, after a conversation with Harris Simmons, CEO of Zions First National Bank. Mr. Lowry, bored with retirement, had scheduled a meeting with Mr. Simmons to explore opportunities at the bank. As it turned out, Mr. Lowry's desire to get back into the working world coincided with the passage of a law that made Utah the first state to legalize digital signatures.
Mr. Simmons said his chief information officer had persuaded him that the business of vouching for the identities of parties to online transactions could become big business if electronic commerce took off. Furthermore, becoming a trusted issuer of digital signatures was "seemingly a natural role for regulated banks because of the fiduciary element to it," Mr. Simmons said.
Having decided to take advantage of the unique opportunity in Utah, Zions formed Digital Signature Trust and hired Mr. Lowry to lead it. "Scott seemed to have the entrepreneurial skills to go out and evangelize the technology," Mr. Simmons said.
Four years into building the business, Zions' foresight seems prescient. In a mid-December report, International Data Corp. predicted that the market for services related to digital signatures will accelerate 61% a year, from $281 million in 1999 to $3 billion in 2004.
But perhaps nothing better reflects the growing interest in digital signatures than last year's passage of the E-Sign act. "The act is to electronic commerce what the genome project is to medicine," Mr. Lowry said. "It takes a great deal of uncertainty off the table."
For Digital Signature executives, the passage of the act paved the way for them to pursue what they believe is by far the largest opportunity that electronic signatures afford: Eliminating paper from the office environment. Routine transactions like loans and purchasing agreements now can be conducted completely online.
The company's ultimate vision of where digital signatures are headed is more far-reaching. Its relationship with the ABA, announced in September after about two years in the making, is aimed at fulfilling this vision.
Namely, the ABA and Digital Signature are seeking to create an infrastructure that would bring the ubiquity and universality of today's credit card system to digital signatures. The approach differs from the majority of current digital signature implementations, in which signatures are exchanged strictly within internal loops, say, within an organization, or between a corporation and its trading partners.
Each of these "closed-loop systems" requires its users to have a specific digital certificate and signature for use in that particular environment. With their TrustID project, the ABA and Digital Signature would eliminate the need for multiple digital identities by creating an infrastructure that would let people use the same digital credential everywhere.
The evolution of digital signatures along these lines is analogous to that of credit cards, in which proprietary cards, such as those issued by Sears, Roebuck and Co., went from being accepted only at the institution that issued them, to being accepted virtually anywhere.
The trick to making such a transformation happen is in instituting a "contract infrastructure" that manages the rules and risks of conducting a universally accepted credential, Mr. Lowry said. "The ABA project is all about that," he said. "We want to eliminate the need for 10 digital certificates for everyone."
Banks would also benefit. Parker Foley, vice president of certificate authority at First Union Corp., painted a picture of what digital signatures would involve without an overarching set of rules attached to them. For example, without the rules First Union would have to create separate contracts with each and every institution whose customers might want to use certificates not issued by the company to access its services.
"The most logical way to use each other's certificates is to use these kinds of trust community models," Mr. Foley said.
The ABA, which has taken an undisclosed equity stake in Digital Signature, will certify financial institutions to issue TrustID certificates on their own or through a third party. The association has approved Digital Signature as the first third-party issuer of the Trust IDs.
"We looked at a lot of different people and came to the conclusion that DST was the best equipped to do this," said Donald G. Ogilvie, executive vice president of the ABA. Because of its relationship with Zions, the company is "the most familiar with the role of banks and willing to help carve that out."
Mr. Lowry "is an entrepreneur who can see big ideas and get them implemented," Mr. Ogilvie said. "He's the kind of person you need to get this type of operation rolling."
Digital Signature is in discussions with 26 of the top 50 banks about using the TrustIDs, Mr. Lowry said, though he acknowledges that the going will be slow. "The idea of a portable credential is less than a year old and probably not universally understood," he said. "This is a six- to ten-meeting business by the time you figure it out. We're in the second or third meetings" with the banks.
In keeping with the credit card analogy, Mr. Lowry said he foresees the possible emergence of two powerful forces in the digital signature world, a la Visa and MasterCard. The counterpart to Digital Signature would be Identrus, a bank-run effort that Mr. Lowry describes as similar to Digital Signature in its pursuit of universally accepted signatures. Identrus, however, is initially focused on facilitating interactions between businesses, while Digital Signature has the consumer market in mind.
"I ultimately see people belonging to both," Mr. Lowry said.
Digital Signature, which is not yet profitable, has issued close to one million signatures, some for use in pilots, some in live implementations, and many in use at $8.3 billion-asset Zions. As with most new technologies, things are happening "a little slower than expectations," Mr. Lowry said.
But even when compared with skiing full-time, "I can't imagine doing anything else in life," Mr. Lowry said. "This is not a job. It's an extraordinary challenge."
