The prospect of purchasing pensions and mortgages online moved a step closer this week with the launch of a digital certificate scheme for the life and pensions industry.
The multi-million pound framework could handle transactions worth billions of pounds each year. It was developed by standards body Origo and is the most ambitious business digital certificate scheme since the launch of financial services trust body Identrus in 1999.
Internet and communications service provider Thus has been awarded the contract for the registration of certificates, which BT will issue. The certificates, a digital passport for doing business online, will guarantee the identity of each party in a financial transaction.
Financial services companies will subscribe to the scheme, which is owned by Origo Secure Internet Services (OSIS). The certificates will be free for independent financial advisers, whose participation will be critical to the scheme's success.
If a certificate is faulty, forged or hacked, OSIS, BT and Thus will be liable.
A handful of financial services providers, including Legal & General and Scottish Amicable, are expected to be early users.
Initially, certificates will be used for basic procedures, such as client valuations and new business.
In the long-term, however, the digital certificate scheme has a massive potential and could underpin online transfer of funds and contracts.
Sandy Neilson, managing director for Origo, said, "This is a huge brick in the e-commerce wall. If independent financial advisers and product providers can recognise themselves over the Internet with confidence there is an enormous potential to develop a raft of applications."
The use of digital certificates within financial services has been limited so far, however. Identrus, for instance, has not been widely adopted by the leading banks for mainstream e-business transactions.
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