Posts by Ed Kountz from July 03, 2008

Ed Kountz | July 03, 2008, 11:21 AM
Back to the Future of Federated Identity?

A JupiterResearch report slated for publication late this year will take a new look at the topic of Federated Identity services. Once the rage in online financial services, most banks eliminated their offerings in the early 2000s when consumer demand lagged expectations.

Given the limitations of Web 1.0, this was understandable…and until recently, Wells Fargo was the only major FI still offering federated identity solutions to a retail market. This week, however, it was reported that Citi will introduce a service enabling it to verify the digital identities of customers to third parties. While designed for commercial clients only at present, its’ clear that increasing utilization of the Internet for financial services (both retail and commercial) have brought into focus the Trust Gap that exists online. Even with advances in authentication on bank sites, “something the customer knows” remains the dominant way through which trusted access is verified. Other options—“something the customer has” (such as a smart card/ token) and “something the customer is” (a biometric identifier), are certainly seeing early, but generally less-well-established, adoption in the US.

Citi’s Managed Identity Services, will use PKI encryption to help secure payment and other sensitive files while on clients’ computer system, andto enhance after-the-fact auditability of data so encrypted. While designed for corporate clients, recent JupiterResearch reports (including LINK )
have touched on this Trust Gap from the e-commerce consumer’s perspective. Way too early to address the multi-sided buildout requirements necessary to declare success, but worth noting from my perspective as a step back into the complex digital identity management space.

We're closed on Friday for the 4th of July...have a happy and enjoyable Independence Day weekend.

Ed Kountz | July 03, 2008, 11:15 AM
Holiday Week Wrapup – Russell-ing up signs of trouble in Bank Stocks

Signs of continued difficulty among bank stocks. Russell Investments noted earlier this week that the combined market capitalization of bank and thrift stocks in its Russell 3,000 Index has declined to 17.4%, a drop from 22.4% a year ago.

The current figure is the lowest percentage representation of bank stocks within the Index in 8 years. As of this writing, the market has clawed back some in the last day of a holiday-shortened week, bank stock activity early this week likely took that number down even more. After the last two weeks, a long weekend can't come soon enough.

And if any additional perspective is needed, the average price of gas eight years ago stood at about $1.50 a gallon. Ah, the good old days.

Also this week, BofA’s Strategic Investments Corp. completed a strategic investment in mobile banking and payments provider mFoundry, continuing attention and activity in the space. Other mFoundry investors include Motorola, PayPal and NCR, as well as VC backers Ignition Partners, Apax Partners and others. mFoundry customers include Citi and BB&T, and the firm also has a strategic partnership with ClairMail. As recently noted, overall customer interest in mobile payments remains modest in the U.S., but recent numbers show that consumers are warming to the real-time, always-available nature of mobile banking, services. And as an account-to-account transfer is very similar to a mobile payment, well…you get the rest. LINK