Despite ongoing efforts to make it easier for consumers to shop online, many consumers still believe there are too many constraints inhibiting their e-commerce activities.As more consumers opt to use mobile devices to conduct online transactions, businesses, including insurers, need to be prepared to support transactions via handheld computers, personal digital assistants, cell phones and other mobile devices.

In fact, John Fallon, director of wireless for the Dublin, Ireland-based Baltimore Technologies plc, believes the mobile world is one step ahead of PCs.

"Right now, on a PC there is no standard way of having a digital signature performed without installing additional software onto every machine," Fallon says. "It is a small downloadable piece, but it is still not part of the environment."

The WAP way

But not so when it comes to the Wireless Application Protocol (WAP) standards that are being developed for presenting Web content on mobile devices.

"With WAP, public-key infrastructure is already the de facto security mechanism, and it is written into the standard for support of digital certificates," Fallon says.

Baltimore Technologies recently announced an alliance with Schaumburg, Ill.-based Motorola Inc. to provide mobile root digital certificates for embedding in wireless handsets and gateways. The company has also developed what it termed "the world's first digital signature toolkit for M-commerce."

Europeans are far more skeptical about Internet security than their New World counterparts are, Fallon says.

"There is a lack of trust there and the desire for at least some of the players on the mobile side to correct that and to, in turn, create a much higher level of trust," he says.

Complex transactions

Experts believe that a majority of wireless financial services transactions will involve either confirming bank account balances, transferring funds between accounts or purchasing stocks.

However, although more complex financial transactions-such as applying for a mortgage or an insurance policy-may not originate on a wireless device, industry observers believe that such devices can play a role in completing such transactions.

Only about 10% to 15% of the estimated $90 million annual market for wireless financial applications emanate from the United States, according to Datamonitor Inc., a New York-based research and consulting firm specializing in e-commerce trends. However, Datamonitor predicts that as the market grows to $1.8 billion by 2004, the United States will become the dominant player.

More support required

If mobile-based transactions are going to become more mainstream, more financial institutions will have to join Bank of America in offering wireless services.

In September, Mayfield Village, Ohio-based Progressive Insurance Corp. introduced WAP technology, enabling its customers using wireless devices to track down a local agent and then have the agent's office automatically dialed.

However, financial services providers may be reluctant to support transactions via wireless devices until unit costs come down and technologies mature.

But that day is fast approaching. By the end of 2002, there will be more wireless subscribers capable of Internet access than PC users, according to IDC, a Framingham, Mass.-based research and consulting firm.

Eric Olden, chief technology officer for the San Francisco-based Securant Technologies Inc., believes security is the last stumbling block before mobile commerce can take off.

Such security can be best achieved by using an application level security system that authenticates a user's identity, authorizes the transaction, logs transaction details and generates a digital receipt, he explains.

"The challenge for enterprises and service providers is to build and deploy a single, integrated security infrastructure that is transparent to users regardless of their access device, is easy to manage and protects e-commerce from misuse and fraud," he says.

Steven Tuckey, associate editor, Insurance Accounting, a Thomson Financial publication.

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