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Enabling Cost Effective Home Financial Services Over the Internet
Two years ago, leading financial institutions began to view the Internet as a home banking delivery channel with potential, and some banks began devising pilot-phase implementations. Today, although Internet banking is still just getting off the ground, Internet Banking is rapidly gaining momentum and becoming mainstream. Virtually all of the nation's largest banks and many mid-size and smaller institutions are taking to the net, and others are making strategic plans to implement Internet banking in the near future. Advances in technology, which make the Internet attractive as a low-cost, truly interactive delivery channel, and the high percentage of banking customers with PCs and Internet service are major factors which have propelled Internet banking into the forefront of home banking delivery strategies.
A fundamental consideration for financial institutions planning Internet banking implementations is the "make-versus-buy" decision. In the recent past the decision was simple: if a bank wanted to implement PC-based, direct-dial or Internet-based home banking, in most cases, it had to go to a select group of out-sourcers. Each of these had proprietary software for their own front-ends, as well specialized software interfaces for various personal financial management programs (PFMs), such as intuit's Quicken and Microsoft's Money. The fact that there was no recognized standard in the industry caused confusion for financial institutions and was a major obstacle to the growth of Internet banking.
This situation has changed fundamentally since early in 1997, when Microsoft, Intuit, and CheckFree, in consultation with financial institutions and other technology vendors, agreed upon a common specification called Open Financial Exchange (OFX). The advent of OFX has dramatically spurred the growth of Internet banking and promises to give financial institutions maximum flexibility and control over the technology required to support their Web and PFM customers.
OFX, an enabling technology that is transparent to end-users, is a specification which offers the financial services industry a simplified way to service consumers and small businesses. It is widely expected to streamline the process of deploying Internet banking.
OFX supports a wide range of financial activities including consumer and small-business banking; consumer and small-business bill payment; bill presentment; and investments, including stocks, bonds,...