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IBM Offers Digital Certificates to Banks

Posted on: Tuesday, 19 July 2005, 03:00 CDT

IBM last week announced it is hoping to encourage banks to make more use of digital certificates through a tie-up with trusted identity company Identrus.

Identrus has certified Version 1.5 and higher of IBM's z/OS mainframe operating system so that users of the software can act as their own digital certificate authorities, eliminating potentially costly middleman certifiers.

The deal draws on previously unexploited embedded public-key infrastructure (PKI) capabilities of IBM's z/OS software. IBM first included PKI in Release 1.3 of z/OS in March 2002, but last week's announcement marks the first time the operating system has received the seal of approval of a certification authority.

"Setting up PKI infrastructure is nontrivial," says June Felix, general manager of IBM Global Banking.

"We heard our clients say that it's important to make PK1 as easy and as pervasive as possible," she says.

Crucial security

Enabling the secure transfer of financial information is becoming more crucial as the number of hacker attacks increases, she adds.

In addition to using digital certificates to verify partners' identities, some financial institutions are employing the technology internally as a way to confirm that they are communicating with what they believe are parts of their own networks, Felix says.

Charles King, principal analyst with PundIT Research, sees IBM's relationship with Identrus as a way for Big Blue to drum up more business in the banking arena.

"IBM's mainframe solutions own about two-thirds of the financial institutions" with its eServer zSeries mainframes running z/OS, he says. "This is a nice enhancement allowing IBM to go to the one- third [of banks] it doesn't work with to offer them an operating system-based feature that obviates the need to work with third- party groups."

Identrus was established in 1999 by a group of global banks, including Citibank, Wells Fargo and the Royal Bank of Scotland.

The privately held company has more than 60 banks acting as Identrus Certificate Authorities, facilitating millions of transactions in more than 166 countries.

Smaller bank interest

While these Identrus members have tended to be the largest worldwide financial institutions, Felix expects an increasing number of smaller banks to also deploy PKI and digital certificates. She pointed to the Swift network, which over the next three years is adopting PKI as a common protocol to be embedded into the systems of the 7,000 banks it supplies with software.

IBM's news builds on earlier mainframe security announcements from the company with more to come this summer, most likely in relation to identity and fraud management, Felix says.

The company also hopes to transition the technology to non- financial users, notably pharmaceutical and biotech companies, Felix adds.

Martens is a correspondent with the IDG News Service.

Copyright Network World Inc. Jul 11, 2005

Source: Network World

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