Straight-through processing: Current trends driving investment and how to deploy a strategic plan without disrupting business operations

Abstract

This paper reviews the current trends that are driving up investments in straight-through processing (STP) and the impact that is being felt by security processors as a result. The paper provides a brief overview of STP and how it has evolved in the financial services industry, before examining the spending drivers that are impacting STP investment decisions. The drivers discussed include settlement risk, regulatory and compliance changes, and operational improvements, in conjunction with the other benefits that are being realised by businesses once they have implemented STP. The paper also takes the opportunity to review briefly some of the changes in the definition of STP today in comparison with that at its initial introduction as a concept to the market. STP is still about automation, but with subtle nuances that enable organisations to derive meaningful information from their transaction processing, towards improving processes and providing a better service for their customers. STP now plays an important role in knowledge acquisition and management for many organisations. The paper then finishes off by looking at an approach for deploying STP in the form of an improvement plan. The main thrust of this discussion is to demonstrate the fact that STP does not need to be deployed as a 'Big Bang' solution from end to end within an organisation; it is less disruptive and more beneficial to deliver STP as a series of tactical solutions for the business — but these mini-projects should link back to an overarching strategic plan that lays out the key objectives for an organisation's STP initiative.