The American Bankers Association is poised to put banks in a pivotal role for assigning digital signature credentials to customers.

ABAecom, a two-year-old subsidiary of the ABA, plans to make Trust ID available to its 9,000 members by mid-July. Trust ID aims to preserve a bank's role in knowing its customers by extending that role to an electronic format.

"The banks will decide who should get" the Trust ID certificates, said Stephen Schutze, director of eStrategies at the Washington-based ABA.

Banks would verify the identity of online applicants, buyers, or sellers through a number of sources. The exact sources to be used have not yet been determined, Mr. Schutze said. Upon verification, banks would mail applicants an activation code for use with a digital certificate.

In some ways, ABAecom has the same goal as Identrus LLC, a 21-bank consortium that has built a framework aimed at verifying the identities of participants in business-to-business transactions.

"Both associations put banks in the middle," Mr. Schutze said.

With Identrus, however, the banks issue certificates and act as the certificate authority, maintaining a root key or a data encryption code that sits atop the hierarchy of certificates issued by participating institutions.

With Trust ID, Digital Signature Trust Co. of Salt Lake City, which is ABAecom's partner, acts as the certificate authority, while the ABA member banks identify the customers, Mr. Schutze said. The aim, he added, is for ABAecom and Identrus to interoperate.

By verifying the identity of digital certificate users, "the banking industry owns the last mile in authentication," said Scott Lowry, president and chief executive officer of Digital Signature Trust, a four-year-old subsidiary of Zions First National Bank of Salt Lake City.

Trust ID is the culmination of a long relationship between the bankers trade group and Digital Signature Trust. Initially, ABA was a customer of the firm. Upon making an undisclosed investment, ABA became a partner in Digital Signature.

"We became a partner because DST saw that someone needs to be the authenticator," said Donald G. Ogilvie, executive vice president of ABA, in an interview following the January investment. "Banks need to do the authentication," he said.

In developing Trust ID, Digital Signature is supplying certificate technology while ABA drafts policies to govern the issuance and acceptance of certificates.

Mr. Lowry predicted "an explosion" in the use of digital certificates after the Electronic Signatures in Global and National Commerce Act, which makes digital signatures legally binding, is signed into law.

Patrick Holahan, executive vice president of marketing at Baltimore Technologies, said, "There will be thousands of applications that will be digital signature-enabled or time stamped." The law, he said, "will be extremely good for our business." Baltimore Technologies provides root certificate authority software to Identrus. "Clearly this bill is welcome," said Anil Pereira, vice president of the Internet services group at Verisign, a digital certificate provider. "It enables people to use advanced technology like digital certificates and digital signatures with some validity."

Verisign is working with Ameritrade to deploy digital certificates that can append a digital signature to new account enrollments and tax form requests.


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