Microsoft Enables Financial Institutions to Cut Cost Of Straight-Through Processing

REDMOND, Wash., Nov. 4, 2002 — Microsoft Corp. today announced the launch of the BizTalk®
Accelerator for Financial Services, a software solution that enables financial organizations to rapidly integrate financial messaging with internal business systems, support the Society for Worldwide Interbank Financial Telecommunications (SWIFT) ISO 15022 and new XML-based industry standards, and rapidly manage and repair messaging and trade errors.

Working with SWIFT and other key technology partners and customers in the financial services industry, Microsoft aims to lower the cost of entry into the financial middleware market by providing a low-cost, highly scalable infrastructure solution, based on BizTalk Server 2002, that can be implemented quickly and easily to facilitate straight-through processing (STP).

“We have observed a definite need in the financial services industry for a commoditized solution to financial messaging, one that takes the pain out of complying with the new standards and yet is in tune with current cost and resourcing pressures,”
said David Medeiros, director of Global Payments at TowerGroup.
“What Microsoft is doing with BizTalk Server and the BizTalk Accelerator for Financial Services is a positive step toward this goal.”

During the development phase, Microsoft worked with financial institutions such as Nordea. The company is also working with the Italian technology service provider SIA, which is implementing the pan-European automated clearinghouse for the Euro Banking Association (EBA).

“With the European Commission ruling to automate low-value, cross-border payments by June 2003, it is essential for us to provide an automated system that can be implemented and integrated quickly and easily by our member banks. With commissions coming down, we want them to be realizing the benefits of increased efficiency as soon as possible,”
said Gilbert Lichter, secretary general of the EBA.
“We have been particularly pleased that Microsoft has helped to change the economics of this type of solution by improving cost, flexibility and speed to market. This enables us to roll the solution out to all our members, large and small, across Europe.”

“SIA selected Microsoft as a technology partner in the development of the EBA Step2 project because of the reliability and commitment the company demonstrated,”
said Renzo Vanetti, CEO of SIA.
“Microsoft® Windows® 2000 platform is already well-known by the financial institutions. BizTalk and the Accelerator for Financial Services provide a complete, reliable, easy-to-integrate and low-cost framework that allows rapid development of solutions such as the participant system in the Step2 project.”

The BizTalk Accelerator for Financial Services will assist financial institutions in deploying STP solutions, thereby reducing the risks and costs associated with errors and failed trades. It provides financial industry-specific messaging capabilities that enable financial institutions to manage exceptions, rationalize reference data, detect and repair faulty messages, and build new SWIFT- and Financial Information eXchange (FIX)-compatible systems. In addition, the Financial Services Accelerator provides integral tools to enable support for further industry-standard advancements, ensuring the system is future-proof. It is the fourth accelerator to be released by Microsoft since 2000; the others are RosettaNet (high-tech supply chain), HIPAA (healthcare) and Suppliers (supplier enablement).

The first version of the BizTalk Accelerator for Financial Services focuses on payments processing and capital markets trading, settlement, and delivery processes. Built-in features include more than 90 document specifications, or schemas, which describe SWIFT and International Securities Association for Institutional Trade Communication (ISITC) messages for payments, foreign exchange, securities trading and reporting.

Microsoft has joined the SWIFT partner program and is providing an immediate solution for institutions to become ISO 15022 compliant. It also offers support for ISO 7775 messaging standards and the new SWIFT Secure IP Network and Gateway.

“Microsoft BizTalk Accelerator for Financial Services provides customers and partners with a common integration platform that facilitates a best-of-breed approach to software solutions,”
said Victor Abbeloos, partner solutions manager at SWIFT.
“This is a first step in SWIFT’s relationship with Microsoft and SWIFT looks forward to a long and productive partnership between the two companies.”

“Datamonitor estimates that the financial services industry will spend more than $2.2 billion on enterprise application integration (EAI) technology in 2003,”
said Derek LaSalle, lead program manager for BizTalk Accelerator for Financial Services at Microsoft.

With the general industry shift to new IP-based standards for financial messaging, there is increasing pressure on financial institutions to support and integrate these standards quickly with existing infrastructure.

“We recognized that the market is ripe for a broadly available solution that enables our customers to comply with new standards quickly and, most important, at a low cost. We are also working to build support for this infrastructure with a community of technology partners to give our customers a wide choice of business solutions. We are trying to remove as many obstacles as possible so that financial services customers of all sizes can achieve the ultimate goal of straight-through processing.”

Nordea recently announced that it has been working with Microsoft on a solution for Internet-based payments for its corporate clients.
“We have more than 1 million corporate clients. By using the BizTalk Accelerator for Financial Services, our customers will now be able to support the new messaging standards and connect to Identrus alliance banks quickly, with minimal adaptation on their side,”
said Bo Harald, first vice president at Nordea.
“We have been very impressed with Microsoft. The company has created a packaged solution that we can easily roll out to our customers, both the largest and the smallest. It caters to our needs for financial message translation and routing, security and scalability, and also prepares us for future developments in messaging standards.”

“If we look specifically at corporate payments, years of effort have been devoted to developing and applying public key infrastructure (PKI) technology and B2B message standards to the problem of automation of corporate payments,”
said Medieros of TowerGroup.
“We feel that a key relationship between a leading financial services institution, such as Nordea, and an industry-leading technology vendor, such as Microsoft, is critical for turning a foundation of technology and standards development into real-world knowledge and experience.”

Community of Industry Partners and Systems

Microsoft BizTalk Accelerator for Financial Services can be used by financial institutions for bespoke development or by technology partners as embedded infrastructure. Microsoft is committed to building a strong community of partners across the financial services industry to help ensure customers have a wide choice of solutions that are tailored to their specific requirements. Microsoft is currently working with technology partners such as Capco, FireStar Software Inc., BearingPoint Inc., SIA, SolutionForge Ltd., Ironbark Ltd. and Macgregor.

“The BizTalk Accelerator for Financial Services is a key offering for BearingPoint enterprise application integration services in the securities and banking industry,”
said Steve Crosby, a managing director for BearingPoint, formerly KMPG Consulting, one of the world’s largest business consulting and systems integration firms.
“BearingPoint will leverage its experience in BizTalk, the Accelerator for Financial Services and the Microsoft .NET Platform, tools and products to provide a swift-to-market, end-to-end integration of customer and partner solutions.”

“Connectivity to services and utilities such as SWIFT, Omgeo Central Trade Manager (CTM), Global Straight Through Processing Association (GSTPA) and FIX are key to achieving the required step change in STP that the industry requires. We see many financial companies rationalizing their connections to these services,”
said Roger Preece, managing director, STP Europe, at Capco.
“Capco has been working closely with Microsoft in the development of the accelerator and is using the BizTalk platform as a key part of our multiservice connectivity solution, STP Bridge. The Microsoft architecture provides a very cost-effective, scalable platform, with enhanced security features, for development of these types of mission-critical enterprise solutions.”

“We are excited about the robust performance and reliability Microsoft BizTalk Accelerator for Financial Services delivers to the SWIFT community. It not only meets today’s need for messaging and integration, but is a foundation for growth that will meet the demands the banking industry is sure to face,”
said Ken Lord, CEO of FireStar Software.
“We believe that the combination of ObjectSpark, BizTalk Server and the accelerator provides the most open, powerful and complete gateway product for the switch to SWIFTNet and the platform for emerging XML standards.”

About BizTalk and the BizTalk Accelerator for Financial Services

Using XML, SOAP and other core Internet transports and protocols, BizTalk Server unites enterprise application integration (EAI), business-to-business (B2B) and business process management technology in a single product to allow companies to easily orchestrate Web services and rapidly build dynamic business processes that span applications, platforms and businesses.

The BizTalk Accelerator for Financial Services provides financial services with specific adapters that leverage the underlying BizTalk Server middleware infrastructure and create a compelling vertical solution.

About Microsoft in Financial Services

Microsoft is a leading provider of software products and technology to the financial services industry. Its customers operate in every area of retail banking, insurance and pensions, and the financial markets.

Microsoft focuses on providing the security, scalability and reliability that the financial enterprise requires. Through Microsoft .NET, the XML Web services platform, Microsoft enables customers to act on information any time, any place and from any smart device.

Working with leading software vendors and systems integrators in the banking and insurance industries, Microsoft supports financial institutions in re-engineering core business operations, achieving straight-through processing, better managing all aspects of risk and capital adequacy, increasing efficiency in branch banking operations, and establishing a new generation of telephone and Internet-based financial services channels.

About Microsoft

Founded in 1975, Microsoft (Nasdaq
“MSFT”
) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft, BizTalk and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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