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Drivers for STP in Securities
Move toward shorter
Transaction and Settlement Cycles
The need for STP in the Securities industry continues
to gather momentum. Primarily driven by consolidation, globalization,
extended trading hours and demandfor next day settlement (T+1).
Regulatory Pressures
New compliance and regulatory directives such
as those ushered in by N2 in the UK and Basel II indicate that
today's regulators are demanding a much closer monitoring of operational
risk than hereto. The USA Patriot Act is viewed as a key piece
of legislation aimed at controlling the movement of terrorist
funds. For the first time the securities industry is faced with
a regualtory challenge which far surpasses anything experienced
before.
Exponential Growth in
Message and Trading Volumes
The expected market growth of 300% over the next
few years, particularly in cross-border business, cannot be handled
with the existing business and communication processes. STP is
no longer an opportunity, it is a requirement. While STP a few
years ago meant having a differentiated competitive advantage,
it is now tantamount to surviving the impending processing disaster.
Cost reduction Pressures
The global transactions with customers have brought
attendant global competition. The need to drive down costs has
never been greater. The rise of new-age technologies is creating
new competitors for traditional banking entities with far more
efficiencies and lower cost base. This is leading to intense price
competition among banking entities, old and new.
Clean Global Reference
Data
Industry participants agree clean and accurate
data is the key without which true STP cannot take place. Reference
data is the fundamental information that defines customers securities
and transactions.
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