American Management Systems Inc. has agreed to use encryption technology from RSA Data Security Inc. to protect services it offers to banks and other financial clients.
American Management, a Fairfax, Va., systems integrator, will incorporate RSA's "public key" encryption into systems for multimillion- dollar letters of credit and cash transfers.
Officials at American Management said they are using RSA's patented encryption technique because it ensures the integrity of sizable transactions without infringing on the functionality of American Management's cash management software.
"Banks are looking to offer new classes of services on a more spontaneous basis," said Scott T. Schnell, vice president of marketing for RSA, which is based in Mountain View, Calif.
Kurt E. Cavano, vice president and manager of American Management's $20 million corporate banking division, added that the company is driving toward "giving the corporation the data that it needs in the way that it wants it."
RSA has licensed its technology to about 250 companies, but only 10% of these are directly involved in banking and finance.
RSA's method of encryption has been available for more than a decade, but banking clients have long preferred the older Data Encryption Standard for institution-to-institution transfers.
Under DES, both the encrypter and the decoder use the same digital "key" - a randomly generated combination of zeros and ones. The longer the code, the better the security and the harder it is to compromise a transaction.
RSA's encryption standard, on the other hand, relies upon separate keys to encrypt and decode.
A bank expecting to receive a transfer makes its "public" key available to all senders. It shares its "private" decoding key with no one.
Because the key that locks the code can't unlock it, the institution receiving the funds knows that it will receive a secure transaction.
"To the best of my knowledge, this is the most secure product on the market," said Bruce R. Valentine, first vice president of Comerica Inc.
The Detroit-based bank began using American Management's TradeAccess for letters of credit last August. The firm's PayAccess and CashAccess modules are currently being tested and will be formally launched in August.