standard for assuring transaction security, and banks establish themselves as ultimate guardians of on-line trust, Nicholas J. DiGiacomo may get his due as one of the leaders and thinkers who made it all happen. In the meantime - many industry people are hoping and gambling it won't be too many years - Mr. DiGiacomo could remain one of the least famous movers and shakers in the field. That would be no stretch or hardship for this high-tech consultant, a senior vice president of Science Applications International Corp. in San Diego. Since its founding in 1969, SAIC has never had a problem operating in shadows, principally on government contract work, often on matters of high-level security. If it still seems shadowy, if known at all, from a banking and payments industry standpoint, it is only because many of the entrepreneurial seedlings nurtured by Mr. DiGiacomo and others like him among SAIC's 31,000 people are only now beginning to sprout. This is typical of a culture that the organization's founder and chief executive officer, J. Robert Beyster, has described as "a company of entrepreneurs," distinguished by employee ownership. Mr. DiGiacomo, 44, carries a few different business cards with president or CEO on the title lines. Together they indicate he and SAIC are wired into virtually any data-security or delivery-system issue of concern to bankers and anyone else trying to stake out a position in electronic commerce. The company names - like Tenth Mountain Systems Inc. and SAIC Yourservice - have yet to gain household-type recognition. Early this year they were bundled into a bigger enterprise, Integrity Solutions International Corp. of McLean, Va., which with 200-plus employees is beginning to establish itself as a source of information protection and transaction security expertise for the financial industry, among other client sets. These relatively new and rapidly expanding operations have brought Mr. DiGiacomo - he is one of two presidents reporting to Integrity CEO Allen Herskowitz - some critical insights. Among the conclusions he has reached from what he calls a "nonbanker and non-bit-head" background, he said, is that bankers "are not ready for prime time" in understanding the Internet and its potential. "They are more concerned about managing risk, and they are certainly responsive on that point. But speaking more broadly, the business opportunity strikes me as enormous." Like others swept into the banking and payments area by the unpredictable tides of the Internet, Mr. DiGiacomo has taken note of financial institutions' failure, in the face of new opportunities and demands, to sweep old organizational barriers aside. What some have called "silos," Mr. DiGiacomo termed "stovepipe environments," adding, "There is a schism between the business level and the bit-heads. "The bit-heads always want to say 'no.' The bankers want to accept transactions and price according to the risk." Assessing the slow progress of the credit card industry's SET protocol, which SAIC had a hand in developing and was by now supposed to have set a pace in Internet payment security, he said, "Too may people have been technology- and bit-focused." Somewhere the business and technology twain will meet, and Mr. DiGiacomo contends his unusual background - "not a bit-head in the classic sense, but I know how to deal with arrogant people" - and the resources of SAIC can be of help. He started out as a particle physicist, spending time at world-renowned laboratories like CERN in Switzerland and Los Alamos in New Mexico. He came in contact with scientific luminaries and worked on "big science" projects like the atomic supercollider. There came a point, Mr. DiGiacomo said in a recent interview, when he realized he did not have what it would take to rise to the top of the physics elite. "I did have curiosity and project management skills," he said. People he knew in science and government brought him into contact with SAIC. He joined in late 1992, just as the company was beginning its crossover into engineering and consulting services for the private sector. Mr. DiGiacomo recalled that at that time SAIC had $1.2 billion of annual revenue, basically from government contracts. Having never done government work at SAIC, Mr. DiGiacomo personifies a commercial thrust that combined entrepreneurial start-ups and acquisitions. One higher-profile venture was Network Solutions Inc., the company that administers the Internet domain-name system, which SAIC bought and later partially spun off to public shareholders. (Some conspiracy mongers saw that as a subtle government grab for control of the Internet, given SAIC's intelligence-community connections, but the company and the Internet "establishment" laughed that off.) Last year SAIC made its biggest deal, acquiring the telecommunications research and development company Bellcore from its Baby Bell owners. Now about half of SAIC's $4 billion of annual revenue comes from commercial activities that were nonexistent five years ago. By 1995, SAIC had burst into some banking industry limelight as a member of the inner circle supporting the Secure Electronic Transaction protocol. SET was jointly sponsored by MasterCard International and Visa International as a means of guaranteeing safety and authenticity of payments over the Internet. SAIC came in at the behest of its client, Visa, and it played a key role reconciling the two competing proposals that Visa and MasterCard originally put forward. But SAIC did not have the name recognition of others in the group such as International Business Machines Corp., Microsoft Corp., and Netscape Communications Corp. "We need to be really good technologically," Mr. DiGiacomo said. But what sets SAIC apart is "we know how to manage projects. We managed the Microsofts and the Netscapes, the cats and the dogs in SET." Well enough, he might have added, that his year-old start-up Tenth Mountain Systems was contracted to manage the software compliance testing for SET Secure Transaction LLC - the joint venture of MasterCard, Visa, and other card companies, known as SETCo, that will certify SET products. "I am a firm believer in branding," Mr. DiGiacomo said. "Create brands and you form a reputation. I see Tenth Mountain becoming major brand in the SET space" as a highly specialized provider of custom tool kits and related services to banks and merchants with e-commerce aspirations. (The company name comes from a Colorado-trained Army division, one of whose members was former Sen. Bob Dole.) Like other SET insiders, Mr. DiGiacomo supports the concept but is not so close to it that he cannot see some flaws. "I believe it will fly," he said. But it suffered from not enough business-side input at the beginning. "It was too technologically focused, too much time was spent on the cryptography, and instead of being based on business rules it was over-designed by committee. "Two years from now it will be architecturally and operationally very different," he said. A bigger consideration, Mr. DiGiacomo went on, is the fact that a new "trust model" is evolving for Internet commerce. Business managers and strategists have not grasped the intricacies, and thus people expert in data encryption, which Mr. DiGiacomo views as only a means to the end of digital certification, have dominated the dialogues. Sharing that observation is Scott Lowry, president of Digital Signature Trust Co., the electronic certification affiliate of Zions Bancorp. in Salt Lake City. He has said that as long as "bankers don't get it," they risk losing this business to nonbanks. Richard Yanowitch of Verisign Inc., another company on the SET panel now in the thick of early-stage marketing, expressed faith in SET and said the delays are understandable. "This is the first massive payments infrastructure moving entirely from the physical to electronic world," said Verisign's vice president of marketing. "With the stakes that high, it is no wonder people are impatient. It will clearly have an impact." "Conversations that start out about public key cryptography are wrong," Mr. DiGiacomo said. "The conversations should start about how trust is established and propagated and verified in society today. We should ask how we came to trust what we trust, figure out how to do it digitally, and then backfill with the technology. "SET is not a crypto discussion. It is a discussion about extending what we do" into the electronic realm. Mr. DiGiacomo said on top of the SET work, SAIC and Bellcore bring other diverse and instructive points of view. Bellcore knows telephony, has a major data security component, and a member of the Bellcore staff with whom Mr. DiGiacomo works closely, William Barr, is president of the Smart Card Forum and spends much of his time working for the Bankers Roundtable's Banking Industry Technology Secretariat. Mr. DiGiacomo's Yourservice venture, meanwhile, has done considerable work in the cable television industry, including efforts to build information and interactive services around the set-top box. If a recently announced joint venture of BankAmerica Corp., Intuit Inc., Tele- Communications Inc., and Home Network is any indication, bankers are waking up to interactive television, and none too soon by Mr. DiGiacomo's lights. "Digital TV is integral to where electronic commerce will go," he said. The cable industry owns potentially enormous two-way bandwidth reaching 70% of U.S. households, has content and is accustomed to selling it, and has learned how to deal with a complex form of digital commerce known as pay- per-view. "They are a force because they know how to sell to consumers," Mr. DiGiacomo said. "Banks are worried about reaching consumers, and cable gets to consumers. I'm not totally convinced TV is the next battleground, and these media companies do stumble. But they will definitely have an impact. "What they have going for them is not the 'pipes' per se, it is the ability to sell to consumers, which is not something that banks historically have known how to do."

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