Better IT security and identity management is needed if online commerce and egovernment services are to succeed, according to RSA Security chief executive Arthur Coviello.

And despite the growth in broadband usage, key IT security issues need to be addressed if consumers are to gain trust in ecommerce, said Coviello speaking at the RSA Conference Europe 2004 in Barcelona this week.

'Although the majority of Europe can connect to the internet it is only a small number of people who are carrying out activities like buying or paying bills online,' said Coviello.

'There are three factors holding consumers back from using the internet for ecommerce: it's scary, it's hard to use, and it is confusing and chaotic.'

The fear of identity theft, alongside lack of trust in many transactional websites, means consumers are holding back from using web services and, in some cases, has led to businesses scaling back the services they offer over the internet, he says.

'The number of phishing attacks has gone from a hundred last year to thousands,' said Coviello. 'And we have heard of customers in the banking community that are scaling back services due to the threat of online fraud.'

But the technologies already exist to overcome many of these problems and if adopted widely they could create a massive growth in the uptake of electronic commerce, he says.

Two factor authentication products, like those adopted last month by AOL to give users an added layer of email security, can help reduce the risk of identity fraud and make paying bills or shopping online safer, says Coviello.

Federated identities, which allow internet users to access multiple sites using a trusted passport style single sign-on will also help ecommerce growth.

'Why can't I log into AOL, go to the tool bar, click on my favourite sites and have AOL pass that authentication onto other trusted sites?' he said. 'It's safer, easier and more understandable.'