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Microsoft, Volante ally for e-processing

The companies plan to build STP, or straight-through processing, capabilities for the financial services market, according to Microsoft.

Microsoft said Tuesday that it established an alliance with software maker Volante Technologies to build straight-through processing capabilities for the financial services market.

Under the deal, Microsoft will team with Volante--which builds so-called straight-through processing (STP) technologies aimed at the financial services sector--to co-market the company's products on Microsoft's own .Net Web services architecture. The companies said Microsoft's business unit for the financial sector would do that co-marketing as well as aid in customer adoption.

The financial services industry is in the middle of an ambitious effort to achieve STP, under which securities transaction processes would become completely electronic. Processes currently used by brokers, exchanges and clearinghouses include a number of choke points where parties typically resort to phone calls, faxes or paper orders to settle transactions.

U.S. securities companies are expected to invest $6.7 billion in STP projects over the next three years, according to research firm TowerGroup. Most expect the projects to pay for themselves within a year.

The Securities Industry Association, the main trade group for the U.S. securities industry, has set a list of major goals the industry needs to achieve in the next few years to enable STP, including eliminating paper stock certificates and standardizing electronic payments.

Volante's STP products aim to speed data integration in order to enable operations such as advanced messaging systems. Using the company's graphical designer software, companies can define messaging models that can be used across different computing environments.

CNET News.com's David Becker contributed to this report.