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Banking industry cashes in on Web services

The Interactive Financial Exchange (IFX) Forum, an Alexandria, Va.-based standards body for the financial services sector, recently took up the issue of how to blend Web services capabilities into its XML-based standard. In an interview, Sid Sidner, chairman of the IFX Forum's Web services working group, told how the technology will shape future versions of the Business Message Specification and explained some of the uses for Web services in banking, ATM transactions and point-of-sale systems.

I understand there's a major changeover taking place in operating systems that run the nation's ATMs -- from IBM's...

OS/2 to Microsoft's Windows. Does the IFX spec or Web services come into play here? Yes. The ATM community is converging on IFX 1.5 as the preferred interface between these new-style ATMs and transaction-acquiring systems at banks and processors. While these new ATMs support the old, vendor-specific protocols, the future lies in open systems, both in the layers of ATM software and in the message format. XFS is the standard for inside the ATM. IFX is the standard for messaging.

Currently, IFX messages are exchanged between the ATM and the acquiring system using the simple bidirectional line protocol currently used for all ATM connectivity. The IFX Web services and ATM/POS working groups are jointly examining the suitability of Web service protocols as an alternative transport system.


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What's the business case for Web services in your industry?
Web services are starting to offer off-the-shelf routing and security capabilities for computer-to-computer services. A financial institution can purchase middleware that will allow them to build 'plumbing' to interoperate among disparate computer systems. IFX is focused on application-level messages and concepts. IFX messages need to be able to be transported over any transport [system].

In the future, the combination of IFX and Web services will allow financial institutions to quickly and safely expose both existing and new financial services internally to themselves, as well as externally to their customers and trading partners. The banking and financial services sector seems to be an early adopter of Web services. What are some of the applications your members are connecting using Web services?
We see three current use cases:

Enterprise application integration: This is using IFX over Web services to interface various financial systems within an enterprise computing complex. These might include customer information systems for demand deposit, credit and debit card accounts and loans system. These also might include payment engines and external interfaces to bill payment systems and payment networks. These might include rich clients such as a treasury workstation or a customer service application.

Bank-to-bank or business-to-bank: This is using IFX over Web services over the Internet or a private network to perform large value payments and other wholesale banking tasks.

ATM or POS device to an acquiring system: This is using IFX over Web services to connect a retail device to the bank. What's the next step in making those part of the IFX specification?
We plan to include these in IFX 2.0. We have a detailed work plan to address all the conceptual issues to be resolved and to produce the specific deliverables, including specs, WSDL, URIs, profiles and implementation guides. The Web services working group that IFX created nearly a year ago was also supposed to make some recommendations at the January meeting. What were they?

Web services are starting to offer off-the-shelf routing and security capabilities for computer-to-computer services. 
Sid Sidner
chairmanIFX Forum Web services working group
We recommended that we decompose the current 1.5 spec into transport and payload components. We would then define a transport concept that is compatible with the current paradigm, and a new one that is compatible with SOAP and WSDL, and eventually one that is compatible with ebXML. The goal would be to keep the payload invariant across all transport systems.

We recommended that, for SOAP and WSDL, that we be WS-I compliant and that we use WS-Security for authentication, integrity and confidentiality. We proposed that in the IFX 2.0 spec, we allow the use of the XML Digital Signature and XML Encryption protocols within the payload or in the transport. WS-Security is the mechanism when using SOAP and WSDL. We expect a security profile soon from WS-I [Web Services Interoperability Organization] and will be compliant with its requirements.

We recommend developing as simple of a Web service framework as possible using SOAP and WSDL, but with enough generality to address expected uses. We recommend also, however, that the IFX develop specific implementation profiles for some of the concrete uses in ATM/POS systems, in business-to-bank systems and in enterprise application integration projects, such as those internal to an enterprise. Version 1.5 of the IFX Business Message Specification was ratified at a January meeting of IFX members in Dallas. What is the spec used for?
While there are many emerging XML-based standards out there, the differentiating factor when choosing which to use is usefulness, maturity, extensibility and, most importantly, the amount of investment necessary to implement and go to market with a solution.

IFX is built with the recognition that no single financial transaction stands on its own, but is an integral part of the relationship among all of the communicating parties. A payment is not complete until a remittance is sent, an ATM withdrawal is not complete until a consumer's account has been debited, and so forth. Briefly, what's the mission of IFX?
The Interactive Financial Exchange Forum was formed in 1997 to create a messaging standard for financial services that would address the challenges faced with the advent of network-based computing models. What's new in version 1.5?

  • Check-acceptance messages to support check truncation.
  • Foreign exchange message enhancements to support non-account currencies.
  • Additional notification support for advising interested parties of actions taken on their behalf.
  • Improvements in support for recording contact information.
  • EFT (electronic fund transfer) enhancements.

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