Financial services companies looking for common language

Computerworld - One major sticking point for straight-through processing (STP) is that applications and messaging systems within securities firms and banks weren't created with a consistent architecture, so middleware is needed to send data from one message format, such as the Financial Information Exchange (FIX), to back-end systems that are using proprietary formats.
FIX and the Society for Worldwide Interbank Financial Telecommunications (SWIFT) standard are messaging standards developed specifically for the real-time electronic exchange of securities transactions. FIX, owned by FIX Protocol Ltd., is the message format used for domestic trading, while SWIFT is used for cross-border transactions.
SWIFT, based in La Hulpe, Belgium, provides global communications to more than 7,000 financial institutions in about 200 countries. The International Standards Organization (ISO) and SWIFT introduced ISO 15022 message standards to replace ISO 7775, reflecting the need for increased standardization as the industry moves from traditional settlement processes to more automated electronic exchange.
"So while I might have connected my trading system to FIX, on the front end, it's not SWIFT-compliant on the back end," says TowerGroup analyst Larry Tabb.
SWIFT has set a Nov. 16 deadline for its users to have 55% of message traffic sent compliant with the ISO 15022 message format, as opposed to the current ISO 7775 protocol. SWIFT has set a May 31, 2003 deadline for traffic to be 100% compliant with 15022.
In 1997, the securities industry agreed to discontinue the use of ISO 7775 in favor of the more business-oriented ISO 15022 messaging protocol in order to enhance STP and to minimize operational costs.
Last year, FIX Protocol Ltd. and SWIFT converged their respective messaging protocols in support of the adoption of ISO 15022 XML as a common industry standard,
On the institutional side of trading, there can be multiple brokers involved with mutual funds, pension funds, 401(k) accounts and other large-volume activities. The assets are transferred to or from a custodian bank.
Problems currently exist in firm-to-firm connectivity and in ensuring that various databases both inside individual firms and throughout the industry capture the data in a standard messaging format, such as the one used by Boston-based Omgeo LLC or FIX.
"The problem with securities technology is that the applications and systems aren't created with a consistent architecture, so you need middleware or some other conversion mechanism to send data from one file format to anther," says Tabb. "One internal system may represent [a stock order] differently than SWIFT or Omgeo may want it represented."
Many broker/dealer firms have settled on middleware rather than rebuilding