The IFX Standard: Global Adoption Is Only a Matter of Time?

by Isabella Fonseca,  Neil Katkov, PhD, April 26, 2006

Abstract

Boston, MA, USA April 26, 2006

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Adoption of the IFX standard has been slow, with 25% of the world's top 50 banks currently involved in IFX deployments, but IFX will boom to reach 60% by 2009.

Interactive Financial Exchange (IFX) is an XML-based standard that enables financial transactions through Web services釦ype interfaces. The standard provides the ability to exchange financial data regardless of technology platform. Adoption of IFX has been slow to date, but the standard is well-positioned to become widely used within the financial services industry, according to the Celent report, ? The report examines the potential of IFX to enhance interoperability between systems, lower development costs, increase the speed to market of new products and services, and reduce the burden of maintaining numerous systems and hardware.

Although there is a general knowledge of the benefits that the IFX standard can bring, banks have been cautiously evaluating when to adopt this technology. So despite the potential of the IFX standard, adoption to date has been slow. "Only large leading institutions have taken early steps to adopt the IFX standard," says Isabella Fonseca, Celent analyst and co-author of the report. "The majority of banks are waiting for proof of concept and measuring return on investment before adopting this technology."

"The institutions backing the development of IFX see it as creating strong competitive advantages," adds Neil Katkov, co-author of the report. "Ironically, these institutions are keeping their IFX strategies close to the vest for the time being, impeding development of the standard in the industry overall."

The report provides an overview of the IFX standard, its potential benefits in the financial services industry, and the drivers and barriers to adoption. The report also surveys IFX adoption trends in North America, Europe, and Asia Pacific and presents implementation examples from each of these regions.

The 28-page report contains five figures and six tables. A table of contents is available here.

 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Boston, MA, USA April 26, 2006

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Executive Summary 3
Introduction 4
IFX Overview 6
  What Is IFX? 6
  IFX in the ATM Context 6
  Benefits of IFX 7
  IFX Industry Sectors and Segments 8
About The IFX Standard 10
  The IFX Forum 10
  IFX Forum Membership 11
  The Standards Process 12
  IFX Standards Structure 13
  IFX Extensions 15
IFX Adoption Drivers And Barriers 16
  Drivers/Needs 16
  Barriers 17
IFX Adoption Trends 18
  North America 18
  Europe 20
  Asia Pacific 21
Conclusions 25
Objectivity & Methodology 27
 

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