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Nancy Feig
Nancy Feig
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TD Bank Financial Group Rolls Out ATMs With IFX

TD Bank/HP deal marks milestone for IFX messaging protocol.

Toronto-based TD Bank Financial Group's (US$349 billion in assets) personal banking group, TD Canada Trust, has become the first financial institution globally to operate the Interactive Financial eXchange (IFX) specification, an emerging standard for open and interoperable online financial services and data interchange. As part of a $357 million, seven-year outsourcing agreement with Hewlett-Packard Canada (Ontario), TD Bank has replaced more than 2,500 ATMs, or automated banking machines (ABMs), with machines based on the standard.

According to Kevin Matthews, TD Bank's associate vice president for ABM services, "Outsourcing allowed us to simplify our operational model and gave us more time to focus on our customers."

"Our customer experience is paramount," said Alexander Morley, VP, ABM services, TD Canada Trust, in a release. With the help of HP and its consortium partners -- Diebold (North Canton, Ohio), ACI (Omaha), Phoenix-Interactive(London, Ontario) and INTRIA (Mississauga, Ontario) -- "TD Canada Trust now has one of the most advanced, most secure and most accessible ABM networks anywhere," he added.

Prior to the deal with HP, TD Bank owned its ATM hardware and purchased services through several third-party providers, Matthews notes. Now, HP handles all the support contracts. According to HP, benefits of the deal for TD Bank include reduced cost of ownership through automation; increased ability to handle security threats; decreased time to market for new services, such as smart cards; and increased overall flexibility assisting in capitalizing on new market opportunities.

The first new ATM went live in June 2006, using an on-premise HP NonStop platform, which features the IFX messaging protocol. The second phase of the project involves physically moving TD Bank's ATM tandem, a switch that processes and routes transactions, onto HP premises, a move that is planned for the fall, Matthews says. He adds that the bank chose HP largely because it operated on the IFX standard.

"The core aim of IFX is to enable transactions between multiple systems and through communication on a common, open standard," says Isabella Fonseca, an analyst with Boston-based Celent. While bank customers won't notice most of the changes, by leveraging the standard, TD Bank will be able to more easily introduce new products and functionalities to the market, as well as provide more-uniform offerings throughout its channels, she adds.

As a first adopter of IFX, TD Bank has the opportunity to become a leader in the market if it is able to maintain a value-added service, Fonseca continues. But, "We expect other banks to follow [in adopting IFX]," she notes.

IFX Adoptors

Several other banks also have implemented the IFX standard. JPMorgan Chase (New York), Bank of America (Charlotte, N.C.), CIBC (Toronto), and Grupo PISA (Metepec, Mexico) are among the early adopters of IFX in North America.

According to a recent report from Celent, 50 percent of the top 20 banks and 15 percent of Tier 2 banks in North America currently are undertaking IFX deployments. "IFX has strong potential to become the transaction standard for the ATM channel, as well as for other areas, such as branch banking, corporate banking, interbank payments and internal messaging," the report says. Celent forecasts that by 2009, 90 percent of the top 20 banks in North America and 50 percent of Tier 2 banks will be involved in IFX deployments. **

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