Lending: Using Digital Certificates

Digital certificates could eliminate a deluge of documents for Massachusetts-based financial institutions and increase competition across the state with the start of a pilot that will securely post interest rate updates on the Internet.

Massachusetts's Division of Banks is using GTE CyberTrust technology in a pilot project, one of the first to link the public and private sectors in secure electronic communications over the Internet. The one-year pilot will include as many as 200 financial institutions and complements a system where lenders fax rate information to the Division of Banks every week. Those numbers are compiled and forwarded to area newspapers. Consumers will be able to electronically access interest rate data at the state's Web site, which will be updated weekly.

The new system will give smaller banks access to an audience that might not ordinarily see rates posted in newspapers. "It gives (state-wide banks) the exposure to the consumer," says Massachusetts Bankers Association vp Peter Blanchard.

The program combines public key cryptography and digital signature techniques with digital certificates issued by GTE. The certificates will not only authenticate the information source and integrity, but will also have unique viewing privileges so rate information will remain private until the appropriate time.

The decision to experiment with digital certificates is an effort to keep up with private sector initiatives focusing on secure electronic transaction and business applications, according to Dan Greenwood, deputy general counsel for the state's Division of Information Technology.

-sausner tfn.com