Banks join forces to combat online fraud

A group of some the largest names in banking have announced a joint venture designed to combat the growing threat of Internet fraud.

The initiative, called Identrus, promises to provide its members with trusted business-to-business trading online. Member companies will be given electronic certification guaranteeing their identity to other Identrus members. The company claims it will back up the certification with a financial guarantee should disputes arise.

UK high-street bank, Barclays, Deutsche Bank in Germany, ABN Amro in the Netherlands and US companies Chase Manhattan and Citigroup are backing the project.

The US-based venture is hoping to enlist other major world banks in order to provide a comprehensive global service. It claims the Canadian Imperial Bank of Commerce and Sanwa Bank of Japan are on the verge of joining the venture.

Guy Tallent, president and CEO of Identrus, said it is important to develop technology that will work across all the world's financial institutions. "Realising our vision demanded we adopt a strategy that demonstrates absolute neutrality to technology vendors," he said.

The announcement comes in the light of news from credit card giant Visa that 47 per cent of its fraud complaints come from ecommerce - although online transactions only accounts for only 1 per cent of turnover.

Visa studied 12 banks in 15 European countries and concluded that proper systems of authentication were urgently needed to make online trading safer.