Straight Through Processing (STP) is a popular goal in payment processing, and for good reason; by automating the payment process organizations can save time and money with less risk of errors. In an era where many payment types from multiple channels are considered the accepted norm, organizations need the ability to streamline all payments from any channel both cost effectively and rapidly. Indeed, research by Capgemini and other industry experts indicates that organizations can reduce fulfillment times by up to 80% and capture cost savings of up to 20%. As a result, financial operations in all industries are adopting STP.
The Challenge of Payment Processing
Every organization has bills to pay, and STP brings dramatic improvements to the process. With traditional payment processing, a single transaction is typically handled by several different people in different roles and departments, involving multiple steps along the way. Remittance documents are routed to a supervisor for approval and then to payment processing personnel for reconciling the payment with the order. Once the payment has been made and reconciled, even more effort is required to enter the purchase into the appropriate accounting software for tracking and reporting. In the end, the entire process is time consuming, costly and inefficient.
With Straight Through Processing, however, the entire process is automated, removing a lot of people, documentation, check points, decisions, processing and time. The result is that businesses can process invoices and payments more quickly, more cost-effectively and with much less hassle. Since the automation is based on rules and conditions established by operational policy, and all of the steps are automated with back-end systems, you ensure a more consistent, accurate and predictable payment process that performs in real-time.
Every organization uses a variety of programs for different departments and functions. The resulting complexity is often one of the biggest challenges of implementing STP. It is important that information be streamlined through a payment process across multiple points so it’s critical to adopt approaches and solutions that connect and interoperate efficiently. Data and information must transfer from point to point without delay. As a result, expect to invest some time and coordination to get things set up properly. Look for providers and integrators that can help ensure all of those different programs work together in one seamless structure.
STP can reduce complexity and save money for a business of any size. However, what do you look for in a good solution and approach? Here are some capabilities to keep in mind:
Increase Accuracy with Machine Learning (ML) – Since STP is all about automating the process and reducing errors, advancements in Machine Learning are an important feature to consider that help ensure the highest level of accuracy possible. Look for the capability to increase accuracy and validate data from digital and paper documents using advanced business rules continuously enhanced through Machine Learning.
Leverage Advanced Capture for Initial Configuration and Ongoing Tuning – You can also use Machine Learning to guide the configuration and tuning of STP systems automatically to achieve high-levels of unattended automation. For example, Parascript Smart Learning capabilities mean quicker time-to-production without expensive professional services costs or time-consuming ongoing maintenance.
Integrate with Legacy Systems – Multiple line of business systems, data repositories and databases are all involved with the day-to-day operation of any business. It is important to adopt software that easily integrates with these legacy systems as well as efficiently and correctly classifies documents, locates, extracts and verifies all key data for faster and more accurate automation.
At the heart of this drive for STP adoption is the ability to remain competitive as the technologies, conditions and expectations in the marketplace evolve. In the financial marketplace, today’s organizations must reduce costs and operations errors as well as speed up transaction handling in order to compete. Straight Through Processing has become a business imperative as a result. Are you ready to move forward? Look for providers and partners that have the right mix of expertise, capability and vision that will allow you to make the most of Straight Through Processing.
Kevin Craine is the author of the book Designing a Document Strategy and host of the Document Strategy Podcast. He is the managing director of Craine Communications Group. For more information visit CraineGroup.com. Author’s note: All thoughts and opinions expressed here are my own and not influenced by the developing company or its affiliates.
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