| Open Financial Exchange Standard |
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FOOL GLOBAL WIRE
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Intuit, Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTU)") else Response.Write("(Nasdaq: INTU)") end if %> UNION CITY, Ca., January 16, 1997/FOOLWIRE/ --- Intuit, Microsoft, and Checkfree held a press conference today to announce a new unified specification called Open Financial Exchange, developed in concert with and in response to the needs of the financial services industry that each of their companies serve. They feel it is significant not only because of what it achieves in terms of offering the financial services industry a single, unified specification for exchanging financial data over the Internet, but also because it represents an important joining of interests among Intuit, Microsoft, and Checkfree in order to advance online financial services and electronic commerce. Today they introduced a unified online banking and brokerage data specification called Open Financial Exchange. It is a combination of existing specifications, specifically Microsoft Open Financial Connectivity, Intuit's Open Exchange, and Checkfree's electronic banking and payment protocols. This specification allows consumers, banks, and brokerage houses to have their computers talk to each other and securely exchange data. That does happen now, but it has tended to happen with separate software packages written to different specifications that made it tough for financial services companies to support the variety of products. Open Financial Exchange will make the process a lot simpler, more streamlined, and hopefully lower cost for financial service companies. They did this because the banks and brokerages asked them to do it. There was a speedbump on the road to an effective and ubiquitous online banking and brokerage connection over the Internet that made it hard to build an effective platform. Open Financial Exchange gives banks and brokerage houses an easier way to build those platforms and a way to support the choices that their customers want to be able to make. In all the meetings that each company has had with a variety of financial institutions, every one of the financial institutions asked them to bring the specifications together in some way. They want to offer their customers choice. They are increasingly going in a non-proprietary route. These banks and brokerages don't want to be forced to build their Internet platforms around proprietary data specifications that limit the way customers can reach them. By building to Open Financial Exchange or working with people that can supply them with that connectivity, they insure that their PC banking and brokerage platforms will be able to support Web browsers, personal finance managers like Money, Quicken, QuickBooks, Microsoft Investor, Intuit Investor Insight, and many other products because this is going to be a completely open specification. Open Financial Exchange enables a very low cost way for financial institutions to provide their customers with a broad set of choices. Intuit, Checkfree, and Microsoft began working on this late last year and came together incredibly quickly because all of them are deeply committed to this and also because each of them had begun at points that were very close together. They shared a common vision for how they could use the Internet and how the Internet could really take off and be used by the financial institutions to reach their customers. With visions that were that close, they got together, looked at where they were technically, found they were very close to begin with, and the final convergeance came together very quickly. Technically, Open Financial Exchange is a combination of the work that has been done on OFC, Open Exchange, and all of Checkfree's work to connect to financial institutions and consumers. They have learned a lot from input from banks, brokers, and processing companies. Each of them designed several revisions down the road toward working on connectivity. So, Open Financial Exchange takes what they have all learned another step forward based on the input they have received over time. They think that is the key reason why the spec has received such broad support. Some indication of that support comes from the words expressing support from companies like Chase, Schwab, Citibank, Fidelity, Visa, Wells Fargo, Integrion, and others. Intuit, Microsoft, and Checkfree are all committed to supporting the Open Financial Exchange specifications in their Fall 1997 product offerings. All those offerings will also include backward compatibility with Open Exchange and Open Financial connectivity. The migration process, they think, is fairly straightforward and they anticipate that most banks and brokers will be able to support Open Financial Exchange pretty easily. All three companies agree that by converging specifications, there is more upside to develop products and services for electronic delivery of financial services. In a way, it is a big lesson of the Internet. The formation of information has to be common to encourage participation. They also all listened to their customers. There wasn't one financial institution or any of their customers that didn't say they wanted one specification. The financial institutions win because now it is easier for them to develop their online channels to serve customers. Their customers win because it's one more little speedbump in the way of financial institution offerings that has been eliminated. For Intuit, Microsoft, and Checkfree, it's not really about who had more to gain or lose. It was easy to look out two years and say "Why have a couple years of confusion that ends in a converged specification anyway? Let's go with it now and make it easier for everyone." In fact, the process has proceeded quite smoothly. The specifications in draft form can be downloaded from their three different Web sites starting this coming Monday. After a month-long review period, the final draft will be published in mid-February. They encouraged their banks, brokerages, and processing partners to start evaluating the specification as soon as they possibly can. It was developed for them to service them and support their customers and the companies welcome feedback. This doesn't mean that Intuit and Microsoft won't be competing vigorously in the business of PC or Web-based financial software. It means that the competition won't be on the basis of what plug fits into what socket. It also means, because they are removing a lot of uncertainty for financial services companies about what technical path to take and are providing a very clear direction for anyone who wants to implement connectivity in the financial arena. Collaboration is essential to this. The three companies have a joint copyright. They will be collaborating not only amongst themselves, but also with other service companies and the financial institution community in order to make sure they incorporate everyone's feedback and continue to revise and update this over time. Integrion is involved in the same process and supports the same notion of convergeance of standards within the industry. For technical reasons, for this season in terms of Fall 1997, Integrion will be working with the three companies by virtue of creating a mechanism to connect to Open Financial Exchange and incorporate that connectivity into their Gold Message standard so that banks using Integrion services will be able to connect with software such as Quicken, MS Money, and processors such as Checkfree in a seamless fashion. They are also committed to the general notion of pushing toward complete convergeance and all parties have the intention of working toward one single standard if that's possible, incorporating both Gold and Open Financial Exchange in the following season. Mecca similarly supports the notion of convergeance of standards and has been very supportive and cooperative in this general direction. They are evaluating the Open Financial Exchange specification from a technical point of view. Integrion will support the Open Financial Exchange in the Fall of 1997 and the three companies are working cooperatively with them to do that right now. They are building their systems based on their own internal messaging set called the Gold Message Standard and in the Fall of 1997 they will make those standards interoperable and will have further conversations to see if they can push even further than that after the Fall. Using the OFX specification, there is no charge to anyone who uses it. Microsoft, Intuit, and Checkfree aren't going to receive any revenue from people who use the specification. People will go about implementing the standard in various ways. Financial institutions that already have a strong middleware architecture in place that connects their different products' core processing systems and that can support multiple inbound devices for direct channels are positioned incredibly well. For them, it would be a matter of having TCP/IP network support, which they probably already have and understanding the OFX specification. They know that the specification maps very well to all of the data attributes of the common account products that financial institutions use, so most will find it very straightforward to implement. The three companies view this as something that will ultimately save them R&D investment to support multiple incompatible standards. * A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements. |
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