The OFX standard is a joint initiative from Checkfree Corp., Intuit Corp. and the Microsoft Corp. This aims at standardizing the format for financial data that needs to be interchanged between the communication parties.

The OFX standard initiative predates the development of XML. It is still based on SGML, XML's parent. Since, OFX is still based on SGML the exercise of making OFX a fully XML compliant is sure to take some time. The principle area in which OFX currently diverges from XML is in allowing various forms of markup minimisation. As these features need not be used, XML documents can also be perfectly valid OFX documents. OFX uses an open standard for describing financial transactions. OFX also uses widely accepted standards for communicating transactions through TCP/IP and HTTP and for security through SSL.

OFX is an open standard, the specification for which is freely available to all. This means that nothing is hidden about the specification and no reliance on any vendor or institution is possible as it is based on SGML/XML.

OFX is designed in such a way that the transaction types not covered by the standard can be added without breaking existing applications. OFX processors that can encounter elements they are not aware of will simply skip over them.

OFX is a data format not an application. Developers are free to use standalone PC applications, Web browsers, or cash dispensing machines to deploy OFX-compliant applications. Although it does not intrinsically rely on HTTP, the current version uses HTTP as its transport layer. Therefore, an institution wishing to use OFX can use any web server platform to implement its support for OFX.

OFX transaction documents must conform to one of the OFX DTDs. Hence, much of the obnoxious and error prone task of developing transaction-validation software can be avoided with OFX.

OFX provides the framework upon which layers of security can be added using standards such as SSL and SET.

OFX is structured as a collection of request/response OFX documents that do not depend on user interaction. Thus, we can easily develop an OFX application that works in batch mode in the background as we can develop an interactive program.

OFX in its entire mode is intended to be a truly international standard for financial transactions. It supports multiple currencies, country-specific extensions and the Unicode character set.

OFX is an inherently client-server architecture. A client initiates a conversation by sending a request message to the server. The server in return sends a response. This is also called request/response architecture.

Clients send OFX data using the POST capability of HTTP to a particular URI, say, http://www.commerzbank.com/accounts.gw. This URI will typically act as a gateway to relay the OFX part of the message through the OFX-aware application. A typical OFX-based architecture is as shown.