Barclays bank has set a precedent for financial services over the Internet in a project that uses digital signature technology on smart cards, predicted to open the flood gates to Ecommerce.
Launched last week, the scheme, which has been endorsed by the government, allows self-employed people to file tax returns back to the relevant government agency via the Internet today, and later will allow users to take out mortgages and perform stock market transactions over the Net too.
Currently bank accounts, investment schemes, mortgages and loans cannot be certified via the Internet as digital signatures are not considered to be a safe enough form of certification. With this project, Barclays intends to prove that software ID on smart cards is the safest and securest way of Web banking.
CertoCo's CertoAuthority digital signature service, which uses public and private key cryptography, is used to ensure the security of the cards.
The digital signature is a unique series of numbers belonging to the user and generated by a smart card known as the Barclays Endorse Card.
The cardholder's private signature key is stored within the memory of the chip embedded in the card. The smartcard is locked using a PIN selected by the cardholder and unknown to anyone else. Barclays has a public key which corresponds with the user's private key, and when these are correctly matched business can go ahead.
Users signing up to the scheme must present Barclays with real world identification like a driving licence and household bills and are then given a personalised smart card.
Steve Collins, director of emerging markets group at Barclays, said: "Once this technology is accepted it can be applied to almost anything, from driving licence and mortgage endorsements to stock sale instructions and loan applications."
"The reason this technology is suitable to the banking community is that customers already trust the bank, which puts them in the best position to offer this service," commented Nanette Di Tosto, marketing director at CertoCo.
She highlighted cost savings on administration as a driving force for online business as well as the need to do business with more and more customers worldwide.
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