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A level playing field

October 11, 2005

One point that convinced financial institutions (FIs) to begin transitioning ATM networks to Windows-based platforms was the promise of operating openness.

On Windows, supporters argued, a whole new world in the ATM space would be visible and easily accessible.

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"The move to a Windows platform has allowed banks to potentially have a separate supplier for hardware and software. Now banks can have a single application run it all - whether it's on Wincor, NCR or Diebold hardware - and it all can communicate with the host system," said Martin Macmillan, chief executive of London-based Level Four Software Ltd.

It's true that Windows is flexible and dynamic, but most FIs have yet to realize its full capabilities, Macmillan said.

That's where the Interactive Financial eXchange standard, simply known as IFX, comes in.

In 1997, a collective of vendors and FIs (known as the IFX Forum) began working on IFX - an XML-based universal messaging format that would allow various financial delivery channels, such as the ATM, point-of-sale, online-banking and branch, to speak the same language.

"From the bank's point of view, if they can get away from all these different systems (and messaging protocols), they can integrate channels, regardless of where the transactions originate," Macmillan said. "Now, for the first time, there's an overall framework that allows that integration."

IFX is expected to be the catalyst that allows FIs to fully realize Windows as an open platform. Through a standard messaging protocol, FIs can easily implement feature functions, for instance, across all devices on a network as well as standardize communication, which ultimately leads to cost savings.

"We're talking about unifying the different types of terminals," Macmillan said. And many FIs are readily buying into that idea.

The IFX revolution

Mark Elson, manager of product development for London, Ontario-based Phoenix Interactive Design Inc., said he expects the use of IFX to explode. "Within 12 months we will have a number of our clients going live (with IFX) on their ATM channel," Elson said.

Macmillan expects IFX to take off in Western Europe and North America first, where the market's acceptance will be evident five years from now.

But that explosion of rapid acceptance could come at a cost.

IFX, like any protocol, Macmillan said, is open to interpretation. "The only way to know if the software is going to work is to test it," he said. And this is a new way of thinking for most FIs, since historically many only deployed proprietary software and hardware.

But that's where a line between larger FIs and smaller ones is likely to be drawn, said Rick Duvall, senior project manager of ATM products for Omaha, Neb.-based ACI Worldwide Inc. "It seems that the larger banks see the advantage (of IFX) more readily than maybe the smaller banks do," DuVall said.

"I think part of that is they are looking for multivendor solutions so they can run the same software on all of their machines regardless of the hardware. This seems to really play into that same type of thinking."