The war between home banking standards appears to be winding toward a peaceable conclusion.
Proponents of the two alternatives, Open Financial Exchange and Gold, said they are likely to be on the same page by yearend. Their agreement could create the universally accepted technical framework that bankers, software companies, and others have viewed as a necessary foundation for widespread market acceptance.
Both sides attributed the likelihood of such an agreement to the intervention of Bits, the Banking Industry Technology Secretariat of the Bankers Roundtable.
Bits' involvement, including brokering meetings between the once- contentious camps, "has been helpful in terms of merging," said Microsoft Corp. business development manager Matt Cone, speaking on behalf of the OFX alliance that also includes Intuit Inc. and Checkfree Corp.
"By the end of the year, this will be much clearer," Mr. Cone added.
Bits first called the two sides together in July, said David Fortney, product development director of Integrion Financial Network, the consortium of 18 banks and International Business Machines Corp., which has been building systems on the Gold standard.
Since the two sides have come together, "we have had a series of technical discussions virtually every day of every week," said Mr. Fortney.
The mood between Mr. Cone and Mr. Fortney was cordial in a panel discussion at the American Banker Online '97 conference, where they outlined the status of their interoperability efforts.
Panel moderator William Powar of the Palo Alto, Calif., consulting firm Venture Architects tried to provoke controversy by asking Mr. Fortney why the Integrion member banks viewed the standards definition as critical. Mr. Fortney said it was the very reason for the formation of Integrion.
Mr. Powar asked Mr. Cone if Microsoft and its partners were willing to relinquish control of the protocol and offer OFX on a royalty-free basis. Mr. Cone replied by saying OFX is analogous to a Time-Life book on how to build a car. While the "book" would continue to be available free of charge, "dealers" would likely charge for "car-building kits."
Yet the general agreement over the prospective common standard-which remains to be named or even fully defined-belied significant differences in the way the two specifications operate. OFX was built around a file- transfer model that generally batches transactions before processing them in bulk. Gold, conversely, was designed mainly for continuous on-line interaction.
If either has a marketplace edge at the moment, it may be OFX, both in terms of the number of desktop software applications and the financial institutions that have pledged support.
This week Chase Manhattan Corp. announced it was in the beta test group of more than 70 companies using Microsoft's Internet financial server tool kit, a product better known by its code name, Marble. Wells Fargo & Co., CoreStates Financial Corp., and PaineWebber Inc. had previously announced. Crestar Bank, using a server developed by Corillian Corp. of Beaverton, Ore., and brokerages including Discover Brokerage Direct, E-Trade Group, Charles Schwab & Co., and Ameritrade have also cast their lot with OFX.
These early trickles could soon become a flood. Mr. Cone estimated that up to 40 financial institutions will be "live" on OFX by the end of 1997, with another 110 following by the end of the first quarter of next year.
Banc One Corp. and NationsBank Corp. are leading the first wave of Integrion Gold systems. Mr. Fortney said seven of the owner banks will have home banking using Gold by the end of the year, with another four following in the first quarter.
If the two standards are eventually consolidated, it will be only the latest in a series of consolidation steps. OFX is a merger of Microsoft's Open Financial Connectivity with Intuit's Open Exchange, and Gold's predecessors include such alphabet-soup acronyms as AFMS and EBMS.
In the panel discussion, Mr. Fortney confirmed that one of the oldest of all home banking protocols-the Application Device Messaging Standard (ADMS)-would be retired in light of Integrion's acquisition of Visa Interactive, the card association's home banking arm, which backed ADMS. It was designed to accept remote transactions from a wide variety of channels, including computers, telephone voice response units, and screen phones.
"It was not really up to the standards we expect from the Internet world," said Mr. Fortney. Over the next 18 months, Integrion will convert banks using ADMS to Gold or to a merged OFX-Gold specification.
