The Missing Link in the Financial Supply Chain

As banks enter the financial supply chain management space, they must keep the security of transactions in mind. This goes beyond simple encryption to the actual authentication of the parties involved in a transaction, according to Andrea Klein, chief marketing officer with IdenTrust (San Francisco).

"If you really want to expand your supply chain, you need some way to authenticate the other party in a transaction. Identity verification becomes a key part of that," says Klein. "The Economist Intelligence Unit did a study [for IdenTrust] on financial supply chain management," she continues. "The No. 1 finding was that about 50 percent of participants said the reason they didn't move to a full electronic supply chain was fear of not getting paid -- the identity piece wasn't there."

To provide identity verification, IdenTrust issues digital certificates through participating banks. The certificates, which are accepted in more than 120 countries, help provide legitimacy to trade partners, Klein says. "All the suppliers have a bank, and the banks issue the digital credentials to them," she explains. "The bank stands in for the liability of that company."

Purchase orders and invoices become electronic forms in which the IdenTrust signature is embedded "so parties have a way to track who sent the orders. This is the next thing that had to happen in the supply chain world," Klein says. "Authentication was the missing piece." --M.B.