It's impossible to escape the avalanche of publicity surrounding Microsoft Corp.'s Windows 95 operating system and the sweeping advances it promises for PC users.

It is equally difficult these days to find a financial software provider without a Windows version of its applications.

To be sure, it's rapidly becoming a Windows world, but for the banking software designer, it's also a Wosa world.

That acronym, which stands for Windows Open Services Architecture, will become increasingly important to financial institutions upgrading to Windows and software vendors looking to do the same.

"The Wosa standard acts as an unseen facilitator," said Michael C. Rawding, Microsoft's group manager for financial services. "Its role is vital for the bank integrating systems and peripherals in an open environment."

In short, Wosa, and more importantly Wosa/XFS, which stands for extensions for financial services, is the technical specification that software developers must meet to run peripheral devices interchangeably.

Why does that make Wosa/XFS so important? And why is it in a banker's best interest to support this specification?

Because it means the difference between a branch or retail environment that is proprietary in nature versus truly open.

I'm referring to those peripheral devices used for branch applications. Peripherals such as statement printers, magnetic stripe reader/encoders, and personal identification number pads are driven by software code - also called "service providers" - written specifically for each device accessed by an application.

Adding a new printer or running an existing one with a new software program often means rewriting the corresponding service providers.

In addition to adding new client/server software applications and peripherals, the widespread branch "controller" hardware technology of the past remains. From the dumb terminal to the controller, it remains the prime example of a proprietary legacy system. So pervasive is this technology, that many institutions in domestic and foreign markets still retain these peripherals and systems.

Variables of this technology remain firmly entrenched, especially peripheral devices. For the institution with a large investment in existing devices, the replacement costs involved in migrating to a Windows environment can become prohibitive.

In 1992, Microsoft and a select group of its partners in the financial arena formed the Banking Solutions Vendor Council. The council, composed of software and hardware vendors, formed to address the functionality and device-integration hurdles Windows-based banking applications would have to clear to reach the market.

"With the Banking Solutions Vendor Council, we sought the input and commonality of purpose of the companies and technology partners ultimately responsible for supporting the standard," Mr. Rawding said. "It only made sense that Wosa/XFS be developed by companies that financial institutions entrust with their technology and automation needs."

The council created the Wosa/XFS standard as an open solution for retail banking applications. That created an opportunity for branches to use existing proprietary equipment with new, open applications. All the bank needs is the programmers to write the service providers to meet the specification for each peripheral accessed by the application.

Most bankers don't relish the thought of being in the software programming business. Most don't have the in-house technical personnel who are wholly familiar with both Wosa/XFS and the older, proprietary systems and devices to be integrated.

However, because of the Wosa/XFS standard, third-party vendors are able to market a variety of solutions. This niche is somewhat narrowly referred to as "middleware."

The middleware solution is akin to terminal emulation of the 1980s where PC commands sent to individual printers and devices were intercepted and translated to applicable device drivers. While functional, this solution offers limited flexibility and growth.

A more complete approach involves connectivity solutions, software operating at the application level and integrating with any device, regardless of make. This solution allows an institution to add new devices and applications without modifying existing software code to run the additional peripherals.

"We could have written the service providers to run with our new applications, but we didn't want a proprietary or in-house solution. We're not in the software rewrite business nor do we wish to be," said Guy Corrigall, group manager of technology for Suncorp Insurance and Finance, Brisbane, Australia.

Mr. Corrigall headed the project team charged with the responsibility for operations, disparate systems interface, and peripheral device integration for the $8 billion financial corporation and its 110 branches. In two years, Suncorp has married an in-house core processing application, a Hogan Systems customer marketing application, and several hardware upgrades from vendors such as Compaq and AT&T GIS.

The logistical impediments and cost of an undertaking of this magnitude would be unimaginable without Wosa/XFS. That's because it differs from other standards in that it was conceived as more than a stopgap measure or temporary solution. Wosa/XFS addresses the problem of disparate devices and software, but also bridges the gulf between old legacy systems and new, open networks.

Any software or peripheral device meeting its specifications can work with any XFS compliant, Windows-based application. That's why it enables a true level of independence from proprietary architectures imposed by legacy systems.

It doesn't matter what type of document printers, teller validation printers, magnetic stripe readers, or any other type of peripheral an institution uses. As long as the application conforms to Wosa/XFS, the peripherals can be supported by the system.

This is extremely important when converting to a Windows environment. Consider operations on the scale of NationsBank or Chase, with hundreds of branches covering several states and entire regions.

The popular perception of Windows remains one of an operating system and graphical environment that revolutionizes the way people use computers.

But if it is to revolutionize the way we bank and deliver products and services at the retail level, it will be essential that the financial industry embrace Wosa/XFS.

To paraphrase Microsoft's new slogan, it's not just a matter of where you want to go today, but what you'll need to get there.

Mr. Lippard is president of Nexus Software Inc. of Raleigh, N.C., which he founded in 1985. Nexus provides connectivity systems for financial institutions worldwide, and is an affiliate member of the Banking Solutions Vendor Council.

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