STP - the automation of the trade and clearing process for financial transactions - is one of the biggest challenges facing financial markets. Firms are under pressure to cut transaction costs by automating the trading process, which should reduce errors.
Lee Adams, principal consultant at financial software supplier SmartStream Technologies, said bank systems had to handle financial messages in different fomats including ISO1522, XML and Fix - Financial Information Exchange format.
"When these barriers combine with the pressures of having to respond to increasing regulation and compliance issues, there is every opportunity for stagnation," said Adams.
Investment in STP was crucial to increase efficiency, reduce risk and share information with clients, he said.