About 30 percent of T. Rowe Price's new accounts are opened on-line, and in a bid to tighten security in the Internet channel, the mutual fund company has teamed up with GeoTrust to implement a real-time identification tool that validates the applicant's ID by tapping the information held by Equifax, one of the country's three major credit reporting agencies.
Besides asking applicants the obvious questions, such as current address and date of birth, the applicant is also asked more detailed questions about their financial history and past addresses. "You have to know yourself pretty well to pass," says Neal Creighton, CEO of GeoTrust. "With a high degree of certainty we can tell who it is."
Mark Woods, vp of investment technologies at T. Rowe Price, explains that the company was prompted to implement GeoTrust's True Identity solution for two reasons: the first is security, and adding that "extra layer of comfort"; and, second, is efficiency on the back end. Besides the speed of the new system, Woods says that it was easily integrated into the Web portal.
Delving into the personal data of customers can be a touchy issue for firms. Customers often don't like the invasion of privacy, and financial firms certainly don't want to offend a potential new customer. As a result, Woods is quick to note that T. Rowe does not gather, store or even look at the information gathered by GeoTrust. "It's none of our business," Woods says.
All information passed between the enterprise and True Identity is secured using client side authentication with a digital certificate issued by GeoTrust. The response that contains a user's confidential information is signed by GeoTrust with a private signing key dedicated to the enterprise. It maintains an archive of information for an audit trail to the transaction in the event a customer is denied.
Woods says what T. Rowe Price sees is a simple pass/fail from GeoTrust for each applicant. Even in the event of denial, however, the firm may contact the applicant to try to validate the information. After all, Woods says, a simple keystroke error might be to blame. About 90 percent of applicants pass the on-line ID test, which rolled out in the fourth quarter.
Right now, T. Rowe is using True Identity for the opening of mutual funds, brokerage accounts and college savings plans. In the future, the firm hopes to leverage the technology for use in its on-line banking channel, which is used by about half its customers.
Creighton says that GeoTrust now secures about 30 percent of all transactions on the Internet. He predicts the on-line ID industry will evolve akin to the credit bureau model, where two or three firms are used to validate all Web IDs. It's GeoTrust's goal to be one of those few ID verification firms.
More immediate plans for GeoTrust includes an electronic signature, or watermark, that it wants to have in place if, as expected, laws change to make it easier to use electronic signatures.
GeoTrust also is teaming up with Adobe to create a secure way for banks to communicate with customers over the Internet at a time of growing on-line fraud and customer suspicion. "A lot of banking institutions are having difficulty talking to bank customers on-line because of phishing. But through the Adobe platform, we can validate the communication."
