STP Technology and Global Financial Market: An Assessment Framework and a Case Study

Abstract

Straight Through Processing (STP) is the end-to-end automation of security trading process from order to settlement. It is to be used for cross-border trades to speed up settlement, reduce risk, and build the foundation for a more effective and efficient settlement process. To remain competitive, financial firms need to take actions promptly to address the opportunities and challenges brought about by STP from a global perspective of electronic business. Global STP capability may not be achieved by simply initiating a series of projects to address the challenges. It needs to be approached by a well-orchestrated re-engineering activity and enterprise-wide technology solutions. This paper presents a general model of security trading processes under the umbrella of STP, and proposes a framework of STP readiness assessment from a global perspective of electronic business, which can be used to guide the STP implementation in organizations.