Open Financial Exchange - Explained
What is an Open Financial Exchange?
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Table of ContentsWhat is an Open Financial Exchange?How Does an Open Financial Exchange Work?Support in various countries Intuit and QFX QFX (file format)
What is an Open Financial Exchange?
OFX (Open Financial Exchange) is an electronic process that is known as online data streaming format that helps to exchange any financial data. This type of data emerges or gathered from Microsofts OFC known as (Open Financial Connectivity) and from file formats produced by IOE (Intuits Open Exchange). IOE is an organization that helps to prepare large scale programmes that are used to issue financial reports or documents concerning tax data. This type of information is exchanged between different parties such as financial institutions and customers. It is to note that OFX is a data-streaming process, not any financial organization.
How Does an Open Financial Exchange Work?
OFX was introduced in January 1997. Three largest global organizations, i.e. Microsoft and CheckFree along with Intuit initiated the launch of this programme focusing on its working mechanisms that allow the convergence of data that is developed independently by different organizations. The mechanism also allows evaluating application-specific extensions in a financial organization such as banks.
Support in various countries
In the USA alone, a great number of banks facilitate customers to use certain software programmes to manage PFM (Personal Financial Management). Such programmes help banking customers to download their account statements in Open Financial Exchange Format. However, the case with Canadian, British and Australian customers is different because banking sectors in these three counties do not permit customers to use OFX. It is to note that CBA exports QIF and Open Financial Exchange format for the Australian banking sector but users are not allowed to use such software.
Intuit and QFX
Intuit uses an Open Financial Exchange proprietary variant to inspect its products and this variant is known as QFX. It is to note that Open financial Exchange makes the direct connection possible while in contrast, QFX allows connection with the server. A direct connection helps the user to use FMS (Financial Management Software) for direct connection to banking OFX server. However, when a user connects with the web, he follows a certain log in mechanism to download financial records manually. This type of download file is called QFX that is imported into Quicken format.
QFX (file format)
Intuit uses the QFX format as it is authentic Open Financial Exchange file and Intuit allows other financial organizations to use it after paying a licensing fee. It is to note that the users can use the standard Open Financial Exchange format without paying any cost as it is an open standard. Intuit uses Quicken software to import files that have a QFX format. Intuit conducts quality checks using QFX format and receives a fee for this work. In case of non-payment, an error message is relayed showing Quicken is unable to authenticate the financial information of the organization related to the download. An individual Quicken user also receives a similar type of message for previously QFX download files.