Compaq, Microsoft, others team up on financial services

Consulting firm Accenture Inc. Tuesday announced that it's teaming with Microsoft Corp., Compaq Computer Corp. and two other companies to set up a business-to-business financial services venture aimed at reducing the time it takes to process stock trading transactions.

Also investing in the new company, called Encompys Inc. and headquartered in New York, are San Francisco-based Advent Software Inc. and The Bank of New York Co.

The Bank of New York said in a separate statement that it's participation in Encompys is part of an ongoing effort to sell outsourcing services to financial asset managers.

The five companies are investing a total of US$50 million in the B2B venture. Details about their respective ownership positions weren't disclosed, but Accenture said each will be a shareholder and provide technology or services to Encompys, which will offer so-called "straight-through processing" capabilities that automate every step of the trading process.

Accenture will provide consulting services to Encompys, while Compaq will supply its ProLiant servers and related hardware and Microsoft will kick in its server software plus a set of Internet portal applications. Advent, which develops a suite of software for investment managers, will supply the core applications needed to run Encompys' service.

Meanwhile, The Bank of New York will handle trade execution tasks at both the middle-office and back-office levels, along with securities servicing support and master recordkeeping functions. Encompys' services will be offered on an outsourced basis, with access for users coming through an online portal, Accenture said.

James Honohan, an Accenture partner who was responsible for launching Encompys and has been named the venture's president, said in an interview today that the new company is in the final stages of developing its services. An initial client, PIMCO Advisors LP in Newport Beach, Calif., is due to start using the Encompys services in third quarter, with other customers to follow by year's end, he added.

Along with offering asset managers access to a single Internet portal, Honohan said, Encompys is aiming to create a next-day trade-processing capability as an alternative to the current standard of completing settlement activities on the third day after a trade is initiated.

It will also offer customer relationship management (CRM) and enterprise resource management services such as communications management and account tracking capabilities, which would let asset managers closely analyze specific investment accounts. "In our first release of this, we're really focused on CRM," Honohan said.."

PIMCO CIO Robert Ettl said in a statement that competition in the financial services industry and increased customer expectations have made it necessary for investment managers to focus on "portfolio management and customer relationships without distractions" such as trade processing technology.