In today’s cash- and liquidity-focused business environment, transparency, standardization, and efficiency are paramount. Many organizations are putting heavy emphasis on straight-through processing (STP) of payments and receivables to help boost efficiencies across the supply chain. But how a company defines the scope of the STP process can have a major effect on whether the project reaches its ultimate potential for cost savings and streamlined workflows. The scope definition can impact which department owns the process, and process ownership is an important variable in determining the extent and effectiveness of STP development. 

Thinking that STP applies to only transactions, many companies place ownership of the process squarely within the treasury department and limit its scope to payments or receipts. Treasury departments often narrow the scope even further, measuring, for example, the STP of a wire transfer payment—asking whether it went from the company’s office straight through to the ultimate beneficiary. However, I believe that companies need to take a broader, more encompassing approach to STP than merely payment or receipt processing.

A better understanding—and, ultimately, a more successful implementation—of STP should be based on the following definition: STP is the end-to-end processing of financial transactions that are fully automated and integrated, without manual intervention, across diverse applications, diverse systems, and even across the diverse organizations participating in the transaction.

Narrower definitions reduce the potentially larger functional impact of “true,” or fully realized, straight-through transaction processing. At its most effective, STP is a holistic process that aims to increase efficiencies throughout a company’s entire continuum of activities. Its scope should embrace the actual movement of goods and services, as well as the related transactions, through all the relevant levels and segments of the organization. STP should facilitate or enhance automation along a continuum that extends from the front-office, client-facing functions of marketing, sales, and customer service to the middle-office functions of control, risk, and allocation—and on through to the back office, where final settlement and reconcilement take place.  

This all-encompassing approach to STP can help companies avoid major pitfalls that a narrower STP system may confront. Consider, for example, the customer backlash that is likely to ensue if payments for a particular product continue to be processed even after the item becomes unavailable. Or what if one party to a transaction asks its counterparty to add an annotation like ‘Attention: XYZ Department’ to the invoice, yet that annotation does not get carried with the transaction? Customer service complaints are sure to arise. Good customers may be left feeling they are not getting good service. Invoices will have to be reinvented, and payments almost certainly will be late. Worse, the invoices may not get paid at all.

Focusing only on the payment process hinders efforts to pinpoint problems that may occur at any point in the transaction trail, from order through delivery. It reduces the company’s ability to avoid problems and its ability to discover where improvements can be made (to departments, process flows, etc.) to prevent future mishaps. For example, many companies have multiple sources of payment instructions (e.g., retail, internal, electronic), which may involve manual processes and proprietary systems. With the onset of several new banking regulations, corporations will be expected to have up-to-the-minute insights into their intraday payment and liquidity positions, including changes in liquidity resulting from fax- and bank-software-package-based transactions. 

All of these examples point to the same conclusion: If your organization’s thinking around STP focuses solely on the payment portion of the treasury continuum, it may be time to broaden your ideas about how your company can achieve true STP, and about the cost savings it can bring.

The STP Value Proposition

True STP can deliver condensed transaction workflows, minimized settlement times, and reduced operating costs.1  Developing an effective process can be well worth the effort if it delivers these kinds of benefits. Instituting a framework with built-in standards and measures for all of the areas, departments, and processes that comprise an integrated transaction workflow—from the beginning to the end of an executed transaction—can go a long way toward boosting the value of an STP process.

When problems arise in an STP-based system, they are easier to resolve if the system can follow the trail of goods and services as they touch each of the company’s front-, middle-, and back-office areas. An integrated system is better able to pinpoint where breakdowns may have occurred along the continuum and provides a better basis for devising enhancements as needed.

Efforts to build a truly straight-through process include three crucial factors:


Review of information gathering—and sharing—at all points on the continuum. To be truly effective, an STP system has to include resources and monitoring activities around the movement of goods and services as they travel from department to department along the STP continuum. Companies need to have accurate order, delivery, and payment information on their latest purchases. Likewise, by making updates on the status of client orders readily available, companies can keep their customers better-informed, which helps boost servicing efforts. A process that closely tracks all aspects of stock/service availability, transaction implementation steps, and delivery and payment workflows—extending to all global regions that may handle all or portions of each of these steps—can provide a powerful assist for monitoring, detecting, and dealing with potentially expensive processing delays. All of which can ultimately impact customer service.

By regularly reviewing its STP processes, an organization can make sure that information is flowing appropriately. STP reviews may help reveal, for example, that a company’s front-, middle-, or back-office operations in emerging or frontier markets do not have the same built-in information gathering standards as divisions in other regions of the world. The end result of such an STP review might be the institution of rules to hold all local offices—even those that are remote or represent a small proportion of the organization’s overall transaction processing activities—responsible for gathering and maintaining STP data as part of their day-to-day process (via spreadsheets, process-monitoring software, etc.). This can help fill gaps where lack of information might otherwise cause expensive product or service delays, or expose the organization to unintended risks.

Companies with dozens, or even hundreds, of bank accounts provide another example. The management of these accounts frequently involves manual processes and multiple systems, and the process of gathering information involves spreadsheets, faxes, and banks’ proprietary systems. Not only is this inefficient and time consuming, but it also poses risks. Corporate banking clients may consider upgrading their systems to include bank account management services; those that do often report increased visibility and transparency, reduced risks, and the possibility of consolidating accounts, thereby reducing overall costs. Using STP to manage bank accounts can provide standardization and streamlining, along with an exponential increase in operating efficiencies, enhanced transparency, and better management of intraday liquidity.

Troubleshooting to discover where errors occur. A single front-office mistake related to an order—incorrectly captured invoice or purchase order numbers, or billing or delivery addresses—can easily create cascading problems that impact multiple departments.

When an order is not delivered on time, the real issue may lie not in inventory mismanagement but in the poor gathering and sharing of information between points along the STP continuum. The original error—buried within a multilayered delivery web—can be easy (and costly) to miss if proper tools are not in place. If, for example, the front office incorrectly uses a company’s billing address as the delivery address, the end result may be two dissatisfied clients. Making sure that data capture is accurate at every step along the process goes a long way toward ensuring that the data output is meaningful. It can also help create client satisfaction and promote repeat business.



1. Securities and Exchange Board of India: “Frequently Asked Questions on Straight Through Processing.” Retrieved  February 16, 2012.

Having the right metrics and standards in place at all the right points of the process can help alleviate order inaccuracies, transaction errors, supply oversights, and payment issues—and, ultimately, can help a company avoid the domino effect of processing “snafus.” Companies should put in place technology solutions for managing the metrics. Examples include streamlined data analytics for each department; electronic dashboards that reflect the current status of every point in the system and provide access to the information by all touch points; and industry templates and benchmark reviews for standard processes such as wires, SWIFT transactions, etc.

Backtracking to identify where errors occurred in the system can be much simpler when a company uses standards that clearly delineate smooth workflows across functions. Data integrity and forecasting accuracy both benefit, as does overall business awareness, which is imperative in global organizations with cross-border communication needs.


Commitment to resource availability and deployment. Finally, developing a successful, true STP process that encompasses all aspects of the appropriate workflows requires a commitment from all levels of the organization. Testing and implementing workflow checks and balances requires buy-in from senior-level management. Dedicated project management teams will be needed to spearhead the project, along with skilled IT teams to help ensure that security and technology considerations stay top-of-mind throughout the initiative. Data transparency, data sharing, project controls, and troubleshooting typically require input from functions such as compliance, risk, and legal that reside in most companies outside of either finance or IT. Process participants from these outside functions will likely need to review project outcomes and provide input to maintain integrity along the way.

All in all, to ensure that an STP system runs at optimal levels, an organization needs to make sure its process has several essential characteristics. First, the scope of a “true” STP process—one that is fully realized and comprises all the tools necessary for success—should encompass every department that touches a transaction, not just the treasury team. Second, the STP ecosystem must include checks and balances that help identify where any problem originates, and must facilitate implementation of the processes required to fix problems at their source in a fast and methodical way. Third, to be fully optimized, an STP process should be championed, understood, and implemented at all levels of an organization.

Once these characteristics of a true STP system are in place, and testing has proven that they are in working order, a company is ready to reap the rewards of STP. Streamlined and integrated complex workflows will result in smoothly running transactions. Improved customer satisfaction is sure to follow—an outcome that in the end will solidly support efforts to boost the bottom line.



Lynne Marlor is the deputy head of sales for investment managers at BNYMellon. She joined BNYMellon in 2003 supporting the financial services client base. Prior to joining BNYMellon, Marlor was employed by BankOne (now JPMorgan Chase) within treasury. She has a BSBA and MBA and is a national speaker on treasury-related topics.