STP stands for “Straight Through Processing”. Wikipedia describes STP as a solution that enables “the entire trade process for capital markets and payment transactions to be conducted electronically without the need for re-keying or manual intervention, subject to legal and regulatory restrictions” .I will deal with the later part of the definition i.e “payment transactions without manual intervention” in this article.

The STP that I am writing about involves the interaction between a Bank and its’ corporate customers,to that extent this business case is also called “Corporate Payments”.Simply put a  Corporate Payment-STP solution needs to connect the payment transaction right from the Corporate ERP into the Bank’s Payment Hub. A SOA based STP solution can do a lot more than just process transaction.

But before I get to the solution let me describe the perspectives of the two primary parties in this interaction. The Corporate customer and the Bank.

Corporate's Interaction with Bank: 

Typically it is the treasury department of an enterprise which interacts with the Bank on a daily basis. Here is how a day of interaction would look like from the treasury department of a corp.

Corporate Cash

• Retrieve Beginning of day totals
• Monitor Cash Accounts
• Send or receive cash between accounts
• Supply chain payments
• Payment Settlements
• Calculate settlement positions
• Retrieve End of Day totals
• Assess Transaction Financial Impact

Short Term Investment Desk

• Retrieve Current Account information
• Conduct Investment activities

Bank’s Interaction with the Corporate : 

From the Bank’s perspective, the interaction starts from the point of on boarding a corporate customer to billing the corporate for the value added services it provides. Once the corporate is on-boarded the daily interaction involves

• Handle the various formats of data arriving from customers
• Process Beginning of Day & End of Day reporting request from customers
• Meet compliance requirements
• Process Payments
• Transmit Payment Status

Challenges with this Interaction : 

Both the Bank & the Corporate face many challenges from these interactions. Some of the challenges include

• Keeping a consistent view of transaction data for various LOBs of the corporate & the Bank
• Corporate customers use different ERPs, hence the data formats are bound to be different Can the Bank’s IT systems convert the data formats that can be easily mapped to the corporate ERP
• How does the Bank manage the communication profiles of these customers? 
• Corporate customers are demanding near real time visibility on their corporate accounts
• Corporate customers can make better cash management decisions if they can analyse the impact.
• Can the Bank create opportunities to sell its products to the investment desks at corporate houses & manage their orders?
• How will the Bank bill the corporate customer for the value added services it provides.