INTERNET BANKING COMING SOON




By JORDAN H. GREEN
  
 Banking on the Internet is a step closer to reality,
after the first electronic check (e-check) was 
tested in San Francisco this past month.
  A cute and cuddly teddy bear was purchased for 
U.S. vice-president Al Gore online, using an 
e-check, but what exactly is an e-check?
  "The actual electronic check itself is a series of a 
collection of characters and fields it's an electronic 
document, you can print out, you can read," said 
John Doggett, of the Bank of Boston, one of the 
banks participating in the project.
  Here's how the e-check works, according to the 
Bank of Montreal's Brian Risman, a systems 
specialist.
  "The user would see a product they like, they 
would click on it and say they want to pay using 
an electronic check, it would bring up a check 
format for them to look at then you would put 
your PCMCIA card or smartcard in the slot in 
the computer," explained Risman.  "It would ask 
you for your PIN (Personal Identification Number), 
like you do at an ATM, you enter your PIN, the 
transaction then would be sent to the merchant, 
for them to endorse your electronic check and 
they would send it via the Internet. 
  "Remember this is all secure because, how they 
know it is you is because of that private key that 
is inside your PCMCIA card, that is your elec-
tronic signature," he continued.  "They send it 
to their bank for deposit and the other bank 
(the bank of the purchaser) debit's your account."  
  The biggest hurdle to overcome on the Internet is 
security, after all no one want's their hard earned 
cash to be swindled.
  "We believe it is the highest reliability that we 
can make available and let me tell you why, the 
reason why, is we are using an electronic check-
book a hardware token, a PCMCIA card which 
stores the keys and has been initialized with the 
private and public key pair for the signature," 
said Doggett.
  These keys are built to withstand attack from 
probing and they are tamper proof, according 
to Doggett. Also, the keys are generated offline, 
unlike an ABM where your PIN is carried across 
the network to a central computer so others on 
the Internet can't see your access codes.  
  Writing checks is the most popular form of pay-
ment in the States, yet all those checks use paper 
and take time to process. The goal of the elec-
tronic check is to become as popular as current 
methods, at a substantial cost savings.
  "It's basically, instead of moving paper checks 
around, you take an image of a check as soon as 
it gets to the first bank, and then only the image 
of the check moves around, which can be moved 
much faster," said Mayer Resnick, a spokes-
person for the Financial Services Technology 
Consortium (FSTC), the group behind the 
e-check.
  The Consortium was started by some  major 
banks in the States, to develop new tech-
nologies in banking. Members include the 
Bank of Boston, Bank of America, Chemical 
Bank, Citibank, IBM and Sun Microsystems. 
The only Canadian participant is The Bank of 
Montreal.
  "It was organized by major banks and they are 
kind of the driving force behind it, by ap-
proaching it that way, they are able to get tech-
nology companies that normally compete with 
each other to work together," said Resnick.
  However, battles among the giants are already 
occurring between the Consortium and software 
giant Microsoft over standards.  Microsoft and 
credit card company Visa International are pro-
posing a different standard, which they will 
license for a fee to others, while the Consortium 
is arguing for open systems which don't put a 
price on the standard.
  Whatever standard we see, e-checking will 
change the way we bank forever.