Intuit Inc. (Nasdaq: INTU) and Microsoft Corporation (NYSE: MSFT) today announced proposed additions to the next version of the Open Financial Exchange (OFX) specification. The new features would include 401(k) extensions, 1099 capability and transfers between brokerage accounts. In addition, the companies are proposing XML compliance in version 2.0 and intend to make the new version backward compatible with OFX 1.0.2, OFX 1.5.1 and OFX 1.6, the versions widely used by financial services companies today. Finally, Intuit and Microsoft have indicated that they will propose adding insurance data and transactions in subsequent versions of OFX.
OFX allows financial institutions and technology companies to create products and services that work together, so financial information can be transferred between financial services companies, their technology outsourcers, and Web and PC-based financial software. For example, hundreds of financial institutions connect with popular personal and small business finance software packages such as Quicken®, Microsoft® Money and QuickBooks® and server-based financial tools such as Quicken TurboTax® for the WebSM, MyAccounts on Quicken.com or MSN™ MoneyCentral® online personal finance service, via OFX today.
"OFX 2.0 is an important advancement of the industry specification," said Rich Bray, general manager, financial products group, for Microsoft Corporation. "It is proof that we remain committed to extending financial institutions' ability to deliver financial services over the Internet, for the benefit of all consumers."
"OFX has been instrumental in helping fuel the growth of online financial services over the past two years," said Mark Goines, senior vice president of Intuit. "The enhancements in OFX 2.0 will help financial activities such as tax, investment planning and brokerage services be more fully connected, and enable financial institutions and their customers to enjoy increasingly more valuable and timely financial services."
With the addition of 401(k) extensions, financial services companies could offer 401(k)-specific transactions. OFX version 2.0 would also include definitions to facilitate downloading 1099 information directly to Web and PC tax software and to transfer funds among an individual's brokerage accounts held at the same financial institution. Intuit and Microsoft intend to continue recommending additions to OFX that would facilitate fully automated tax return preparation.
In addition, Intuit and Microsoft are responding to the increasing popularity of the XML protocol among financial institutions and technology providers. Because XML is a richer format for describing a Web page's data, its inclusion in OFX version 2.0 will give OFX more functionality and allow it to interact with more content and applications on the Internet.
"Incorporating XML into OFX will let us access a growing number of XML tools available on the Internet," said Jon Buffington, product manager, for S1 Corporation. "It lets us offer a better product to our financial institution customers and cuts down on product development time".
"Internet banking demands lightning speed time-to-market for new content and tools," said John Treadway, Director of Product Marketing, Sybase Financial Server. "Incorporating XML into OFX will enable us to offer feature-rich products to our financial institution customers and deliver them on very fast product development and deployment schedules. This makes XML and OFX a great combination for us."
Intuit and Microsoft's commitment to backward compatibility is intended to safeguard the investments of all OFX users and implementers and lets them upgrade when they are ready, rather than being forced to keep up with the standard. Currently 50 companies are marketing OFX services and solutions to the nation's leading financial services companies and their customers.
As part of both companies' long-term commitment to open standards, Intuit and Microsoft are actively engaged with the Interactive Financial Exchange (IFX) Working Group to support the creation and rollout of the IFX standard. At whatever point IFX becomes established and a certification process exists for high-quality implementations, Intuit and Microsoft plan to work closely with the IFX Working Group to create a migration path for existing OFX Solution Providers and to preserve the existing investment in OFX by these companies. This will be important as the number of financial institutions and technology providers that use OFX continues to grow, because OFX is here now, it works, and these companies have relied on OFX to bring their online financial services offerings to market quickly.
Intuit is drafting the proposed 2.0 specification and will submit it to Microsoft and CheckFree for their review and input. Together, the three companies develop and maintain the OFX specification. Intuit is targeting release of the specification in Q1 2000.
OFX Specification
OFX is a unified specification for the electronic exchange of financial data between financial institutions, businesses and consumers via the Internet. It is designed to support a wide range of financial activities including consumer and small business banking; consumer and small business bill payment and investments, including stocks, bonds, and mutual funds.
