The Interactive Financial eXchange (IFX) Forum, a key player in the International Standards Team Harmonisation (ISTH) collaboration initiative involving major international banks and standards organizations, today announced that it will include support for the initiative's deliverable, an XML core payment kernel for corporate-to-bank payment initiation and status messages, in the next version of the IFX specification.
The IFX Forum, comprised of representatives of leaders in the financial services industry, is a not-for-profit standards-developing organization working to develop a robust framework for the electronic business-to-business exchange of data among financial service institutions around the world.
The IST Harmonisation effort was initiated in the summer of 2003 to prevent divergence and duplication of standards efforts in the development of a payment kernel for use in electronic financial transactions. The IFX Forum has worked extensively on the ISTH initiative as a key member in this successful first phase.
"This kernel is the culmination of a lot of work inside a cooperative arrangement that is completely consistent with IFX Forum's mission of interoperability and our track record of delivering extensible financial messaging standards that are rich in payment content," said Richard Urban, President of the IFX Forum. "We are proud to have played a significant role in the IST Harmonization efforts."
The IFX architecture committee is now reviewing - and expects to adopt - two variations of direct support for the payment kernel as early as late summer 2004. In one case, IFX payment messages may include a "wrapper" that can include the payment kernel data in a form that can be passed directly to other systems unaltered. In the second case, the same data will be represented, or mapped, in terms familiar to users of the current IFX standards. In both cases the key IFX characteristics of predictability and extensibility are maintained.
This support allows most IFX users to provide all the data necessary for interoperability with the international standard while remaining consistent with the robust IFX object model. Trading partners who need to interoperate internationally can easily transform messages from domestic partners into the ISTH payment kernel.
The core payment kernel consists of an agreed-upon set of key financial data components required for a payment message in any currency. The payment kernel can be processed by any bank regardless of location and can be issued by any corporation regardless of business line. The latest ISO standard (UNIFI - ISO 20022) was used for the definition of the core payment kernel message models and XML schemas. All participating organizations have committed to including the kernel in their own sets of standards.
The collaboration began in the summer of 2003, when nine major international banks - ABN AMRO (NYSE: ABN), Bank of America (NYSE: BAC), Citibank (NYSE: C), Deutsche Bank AG (NYSE: AG), HSBC (NYSE: HBC), JPMorgan Chase (NYSE: JPM), Nordea, Standard Chartered and Wells Fargo (NYSE: WFC) -- and four standards initiatives -- IFX Forum, OAGi (Open Applications Group), SWIFT (Society for Worldwide Interbank Financial Telecommunication) and TWIST (Treasury Workstation Integration Standards Team) - agreed to create the ISTH. RosettaNet has endorsed the effort and is also implementing the messages.
The ISTH is issuing its final recommendations in a report describing the UNIFI compliant messages and giving recommendations on using them. The report also details how to extend the messages with additional information from existing standards, such as remittance information, and how to maintain them using the ISO 20022 maintenance process.
This initial focus on payments initiation and status messages provides a solid foundation for future ISTH collaboration, which will cover bank-to-corporate advices and statements. Preparation work is now underway for this second phase.