Modern payment systems are essentially based on wire transfers between banks. One widely known payment network is run by S.W.I.F.T (Society for Worldwide Interbank Financial Telecommunications).
The payment messages exchanged through this network must have a specific format designating banks, theirs roles and accounts. Other payment networks, such as FEDWIRE and CHIPS, obey the same principles.
For this type of networks, all technical means are usually deployed to guarantee that a message sent is never lost and that it always gets to its destination. Today, most front-end network software (BESS, ATLAS, Moneynet, MERVA, STACHEM, etc.) combined with the adequate hardware provide non-stop service and 100% reliability. Once the message is received, secured and acknowledged, it needs to be processed. Poor data quality in a payment message results, in most cases, in manual handling (operators manually repair, route or retype messages, for example). This slows down processing, increases transaction costs, delays the payment and implies low quality customer service.
In October 1994, S.W.I.F.T published its first draft on Straight-Through Processing (STP) to heighten banks awareness (especially, banks payment centers) of the problem.
The challenge is to have banks issue "perfect" messages, that can be processed automatically.
Financial Institutions need to train operators to ensure they follow standard formats. An additional means of reaching high STP rate, is to implement FircoSoft STP Factory solution that will automatically repair, enrich and transform payment and securities messages.
STP rates are also highly impacted by new national and international regulations requiring banks to monitor messages and customers. Without advanced automated solutions, banks will struggle to meet these new requirements. |