Banks Explore New Customer Data-Exchange Standard

BOSTON (06/07/2000) - The Financial Services Technology Consortium (FSTC), a not-for-profit organization that includes banks, research firms and government agencies, is planning to meet June 15 to discuss authentication issues for Web sites that aggregate banking information.

The group has already developed what it calls the Financial Agent Secure Transaction (FAST) model, which allows financial institutions to provide a range of services, from customer authentication to payment guarantees. At the upcoming meeting, consortium members will further develop the technical model and begin readying it for a market trial.

Anatoly Kissen, vice president at New York-based Citigroup Inc. and head of the FSTC's aggregator project, says the main goal of the aggregation committee is to move away from accessing customers' personal financial information via screen scraping. The FSTC wants to move to a common, XML-based platform.

Today, he said, aggregators scrape personal financial information from Web pages - not exactly the most secure and reliable approach.

"If we provide a direct feed to the aggregators, the quality of the information could be improved," he said.

At the June 15 meeting, financial industry representatives from such organizations as the Washington-based American Bankers Association, Charlotte, North Carolina-based Bank of America Corp. and Citigroup will meet to decide the details of a pilot project.

The pilot, according to Kissen, may not necessarily be a full-scale, XML-based platform but would eventually lead to it.

The meeting is a sign that banks and other financial institutions have accepted that aggregator sites are inevitable, said George Barto, an analyst at Stamford, Connecticut-based Gartner Group Inc.

"The banks would prefer that this didn't happen, but it did happen," he said.

"We've done research and we've asked people about about their ideal financial service Web site and basically what people say is that from a single Web site they want to have access to all their financial services."

Last year, Charlotte, North Carolina-based First Union Corp. went to court against Princeton, New Jersey-based Paytrust Inc. , which offers the Paytrust.com aggregator Web site. In its lawsuit against Paytrust.com, First Union contended that the aggregator had raised potential security problems by screen scraping customer information from its Web site. However, First Union later dropped the lawsuit.

"Looking at it from the consumer viewpoint, it's good news that they're willing to cooperate to come up with a standard to make that process work better," Barto said. "That is only in the best interest of the consumer."

But it's not going to be a smooth road, he added.

"The technical problem is establishing the standard and everyone agreeing on that standard," Barto said.

One existing standard, the Open Financial Exchange (OFX), while not complete, does address some of these issues, said Gartner analyst Avivah Litan.

"With OFX, there are already four or five flavors of it," she said. "Vendors have to program to all the different versions and keep up with all the extensions. It's not one single protocol but it's certainly better than screen scraping."

The FSTC group may also run up against competing efforts by another industry group, the Banking Industry Technology Secretariat's Financial Services Roundtable, she added.

But FSTC president Adam Backenroth, who is also vice president of strategy and architecture at New York-based The Chase Manhattan Bank, said that the FAST model, which has been in development for six months, could work together with the standards proposed by other organizations.

"FAST could provide a migration path," he said. "It could work together with other authentication mechanisms."

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