Libby Ghekiere is responsible for managing the cash management and trade products offered globally by Bank of America. In addition she is a member of the board of e-commerce infrastructure company Identrus. Here she talks to FinanceAsia about the evolution of the internet as a commercial transaction platform and how the banks are playing a role.
Q. Bank of America, and yourself in particular, were among the first to promote a global infrastructure that would involve the banks in using and issuing digital certificates. What was the driving force behind that?
We were one of the first banks involved in discussion about putting the company together several years ago. We had, as a bank, been involved in digital certificates and the like for enabling web services such as our Bank of America Direct product. So we had an interest in the e-commerce space. It was a technology we were interested in because we felt it was a very high priority for ensuring customers’ security in interacting with financial institutions over the internet.
Before that we had been involved in an implementation through a group called Commerce.Net where we did a project for government-run Lawrence Livermore Labs. They wanted to do their EDI payment initiation over the internet. It was the first time it had been done and that project is still running today. We think it was the robustness of that process that convinced us that the internet was a very viable commercial transaction platform.
When the discussion first started about creating a global infrastructure for identity trust we felt that that made a lot of sense because we needed to enable our customers to engage in commercial activity in this way.
So when we started discussion it was really six banks that were involved and I think because it was originally quite a small number we were able to move through what was a very challenging process of establishing a legal framework and business practices framework that would enable validation of identity across a global infrastructure.
Q. Was it a case of pursuing the technology, or did Bank of America and the other banks see some kind of real business model for Identrus?
I always liken it to the credit card business. Bank of America’s AmeriCard was created, I believe, in 1958. It was done out of Bank of America with the idea you could take a commercial line of credit and make it available to a retail customer – at the time a very novel idea. And at the time there was really no business case for it. But out of that whole idea came Visa, which is today a very strong business and has a financial infrastructure that covers the globe.
I think some of these things, when in their infancy, are difficult to substantiate. But we had a long-term vision that this [digital certificate etc.] would be such a core component of the online transaction infrastructure that we had to do it and that it couldn’t be done by a single financial institution.
Q. Bank of America was the first bank to issue Indentrus digital certificates last year. What kind of applications are your customers finding for them?
At Bank of America we have a very large customer base using digital certificates for activity between us and then. We have a suite of cash management products available over the internet on Bank of America Direct. We have about 5,000 corporate clients and about 25,000 users that can come in and look at different aspects of their cash management. Those certificates are the ones that are issued off Bank of America as the certification authority.
That is separate from the Identrus platform, which is meant to enable customer-to-customer interaction. We have issued Identrus certificates to Cisco for an application dealing with leasing agreements. And then we’ve also worked with several other large companies.
There was just recently an announcement that Identrus made with Microsoft on incorporating the infrastructure into their operating systems. That becomes an even more fast paced enabling tool.
Q. It seems that there are only a few cases of working applications using the Identrus infrastructure so far, though there are quite a few in development.
I do think that applications are the gap in the process because all the infrastructure is in place. The banks that are involved are issuing certificates that are interoperable so any application that hooks into this infrastructure can use it regardless of whether the application comes from the banks or from someone like Sun Microsystems or Microsoft.
But as for the development of different kinds of applications I think that piece of it has been slow to mature.
Q. Why do you think that is?
I think it’s because the vision of the e-commerce space has shifted. The strength of the Identrus certificate is that it really allows globally unknown partners to interact with each other. That is a dynamic that’s essential in an open marketplace.
But the open marketplaces haven’t really evolved in business to business activity the way that I think a year ago we would have expected them to.
What we’re seeing is quite a lot of request for proposals (RFPs) being issued for virtual private networks (VPN) that would be a closed environment but open to multiple companies. The Identrus certificate could be used in those. There are several applications for these networks that are being developed, both by industry bodies or large companies looking at their supply chain.
