Banking and modern communications technology have rarely been synonymous - at least not until recently.

Interactive Financial eXchange, or IFX, is a messaging standard that makes it easier for delivery channels such as ATMs, teller stations and voice response systems to communicate with each other. It is bringing the banking industry into the 21st Century, according to industry experts like Rick Duvall, senior product manager for ACI Worldwide and a member of the IFX Forum ATM/POS Work Group.

The ATM/POS Work Group, part of the non-profit IFX Forum, is made up of industry leaders like ACI, eFunds, Diebold and NCR. It's helping to develop a universal language that will simplify the task of connecting ATMs with other banking channels.

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Protocols developed by the IFX Forum are based on XML, a flexible and commonly used way for financial services providers to create and share information over the Internet. This means that unlike its predecessors, IFX can be used on any Microsoft Windows-based ATM - regardless of its hardware or software. This flexibility will enable the standard to become common quickly.

Duvall said he expects 20 percent of ACI's customers to be using IFX within the next five years. "We believe the banks will start to see the benefits and then the vendors will start to see the benefits," he said.

The future of communication

Duvall said the intent of IFX is to avoid the fate that has befallen the ISO 8583 standard, which is typically used in the financial industry to switch transactions between various networks.

Major networks such as Visa, MasterCard and Star each have their own ISO implementations, and IFX is the remedy for the resulting communication issues. With IFX, Duvall said, "a Diebold machine and a Wincor machine will communicate in the same way with ACI."

"There's a great deal to be gained by harmonizing channels for customers and deployers," said Steve Risto, director of NCR's APTRA Software Center of Expertise. "But what's far more important is that banks can now engage customers with a consistent relationship across all channels."

Using IFX, the customer's experience while banking online or at the ATM can become the same or very similar.

At the BAI Retail Delivery Conference and Expo in November 2004, several vendors demonstrated how IFX works by running a production-quality system with several makes and models of ATMs that communicated via a single IFX device handler in ACI's booth.

As more financial institutions move toward Windows-based platforms, the use of IFX is the next logical step, said George Throckmorton, a senior marketing manager for ACI.

Take First National Bank of Omaha, for instance. In early 2005 the bank will begin using IFX messaging on many of its ATMs.

Throckmorton said FNBO is piloting IFX because of expected savings on software. Because IFX is a multi-vendor standard, the bank will be able to use a single type of software across its entire ATM network. In addition, FNBO will be able to offer new ATM services more quickly because less coding will be required.