Digital certificates act as signatures.
Throughout history, the means for communication travel has evolved with technology: mail in the United States has been delivered on foot, and then by Pony Express, stagecoach, airplane and ultimately the Internet. In the early days, sensitive information--like a letter from a soldier during war--was open to interception. Today, sensitive communication sent via the postal service is protected by an envelope. Online transactions are like sending a digital postcard: open and available to those who wish to intercept them. Digital certificates--which work together with digital signatures--are a set of files on your hard drive that authenticate the information, sender and message received.
Online Banking Advantages
Many businesses rely on digital certificates for banking procedures. For example, a human services organization that distributes customer incentive checks uses a digital certificate to validate each instrument. Each time a check is created, a designated user employs an identifiable computer to upload and manage each check prior to distribution. This alerts the bank of the amount and number of each check. In addition, the digital certificate protects against fraudulent activity by assuring the party receiving the information you are not an impostor. Online banking would not be possible without the use of digital certificates. According to Bank of America, transactions cannot take place until the digital certificate has been verified.
Legal Advantages
Digital certificates and signatures provide protection in legally binding situations. When sending email to a bank, for example, a digital signature will verify that the information came from you. When agreeing to legally binding requirements, digital certificates prevent you from becoming a victim of an impostor. In addition, digital certificates and signatures prevent the recipient from denying the receipt of information.
Financial Disadvantages
Businesses must purchase digital certificates from certification authorities. A certificate authority acts as a third-party issuer that ensures the acceptance of the certificate. Certification authorities typically require a subscription to their service, which requires monthly payments to continue the relationship. In addition, multiple certificates for different sites or purposes can become a costly endeavor.
Technological Disadvantages
When considering digital certificates, you need to factor in many areas of existing technology. According to The Institute of Internal Auditors, "auditors should recommend that senior and IT managers consider the tool's ease of use, integration with the existing software platform, the company's product architecture, the security of the tool (e.g., the strength of the algorithm used), vendor support, cost, and future flexibility before deciding which tool to implement." In addition, creating a platform that accepts all digital certificates is a difficult undertaking, and human carelessness may compromise the safety of login credentials.
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