After going nearly a year without a CEO, Identrus LLC this week said it has hired a chief executive who’s charged with resurrecting the developer of digital certificate technology and expanding the use of its Web-based services for certifying the authenticity of business-to-business transactions.
New CEO Karen Wendel acknowledged that New York-based Identrus, a privately held company formed by a consortium of eight banks in 1998, has failed to effectively market its digital identity-authentication system and create applications that could generate increased demand among financial services firms and other potential users.
In addition, Identrus’ system – which is based on public-key infrastructure technology – isn’t tied to payment-messaging programs, supply chain management systems or other business applications.
Wendel said she plans to pursue partnerships with application vendors like SAP AG and PeopleSoft Inc. and hopes to sign some deals within the next 12 months. She added that she will also hire a new marketing team for Identrus in the near future.
One big misstep by the company was relying on its owner banks to create interest in its products instead of doing that itself, Wendel noted.
The combination of problems has prevented Identrus from becoming a money-maker, despite a roster of founders that includes ABN Amro Holding NV, Bank of America Corp., Citigroup Inc. and Deutsche Bank AG.
Identrus claims that more than 60 financial institutions have signed up to issue digital certificates for e-commerce transactions. But thus far, many of the banks have used the company’s technology only to establish sets of PKI rules, Wendel said.
After Identrus’ marketing capabilities are beefed up, Wendel plans to begin selling annual subscriptions to the company’s PKI network, as well as professional services.
Five years from now, she said, “I want there to be so many digital certificates out there that if you were to count them, you’d run out of space on your calculator.”
Wendel “is interested in going after the eBays of the world, and they need this kind of technology,” said Avivah Litan, a financial services analyst at Gartner Inc. in Stamford, Conn. But they’re not using it now, she added.
In February, Gartner surveyed 200 business-to-business companies with US$100 million or more in annual revenue and found that none were using digital certificates, Litan said.
What’s more, a separate survey of 135 banks conducted last year by Gartner revealed that less than five per cent of them had issued digital certificates to corporate customers, and less than three per cent had done so for retail customers.
Most of the companies that responded to the two surveys expressed interest in digital certificate technology, Litan said. But none of the non-banking businesses had even heard of Identrus, she added.
Jane Hennessy, senior vice-president in charge of Wells Fargo & Co.’s international banking group, said the San Francisco-based company is close to launching a beta test of Identrus’ digital certificate technology with several corporate customers.
“I think the strong rules set (and) the security processes make it about as secure as we can get to make sure documents are authentic,” Hennessy said. Another expected benefit is the interoperability of Identrus’ certificates among the different banks that have joined its network. “You don’t have that with most other (digital certificates),” Hennessy said.
Wendel, 45, was formerly CEO of eFinance Corp., a San Mateo, Calif.-based software vendor that develops products for gauging the financial soundness of customers and business partners. She said her plan for Identrus includes the development by early next year of a digital certificate that banks, brokerages and other companies can use to authenticate retail customers.