A survey from treasury software provider IT2 shows many treasuries lack STP in their workflow.
While straight-through processing (STP) has been a prevailing goal of many a corporate treasury for years, there are still many treasuries out there still not automating their processes. According to a new survey, only 51 percent of treasuries are currently using STP or automation to support the flow of work at their companies.
The survey, from treasury management software provide IT2, also revealed that there will not be a lot of growth in usage over the next few years, either. These numbers are surprising given the push over the years for more optimization, cost reductions and process control. But all’s not lost. In a recent NeuGroup Global Cash and Banking Group (GCBG) world-class cash management project, members determined that in order to be considered world class, you should have at least 75 percent of your process automated straight through. Further, in the research survey incorporated in the project, 76 percent of members have this standard as their target and 73 percent expect to achieve it within the next three years.
STP is also an established goal for two NeuGroup FX Managers’ Peer Groups. In their own FX world-class survey conducted from summer of 2009 to spring 2010, the groups laid out how STP works in a world- class organization:
“Where cost- effective, a World-Class Trading Process will use straight-through processes where trade data, once entered, will not require manual re-entry. The STP process should free staff to perform higher-value tasks while providing for adequate controls to review, approve and confirm trades.”
SWIFT use
IT2’s survey also asked treasurers about their attitudes toward connecting to SWIFTNet, which allows corporates to communicate their financial information and transactional data securely and reliably to bank partners worldwide. The survey found that 16 percent of respondents were linked to SWIFTNet, 29 percent were planning to do so within three years, and 55 percent indicating they might connect later.
In a similar GCBG survey, 19 percent of respondents were linked (a 4 percent increase from 2009), 28 were currently implementing, and 29 percent were researching whether or not to implement (also a 4 percent increase from 2009).
It’s well established that managing cash effectively and efficiently gives companies a greater advantage in business, not to mention a favorable view from shareholders and others who provide capital. Implementing STP where and when the company can helps in that effort.