The T+1 mandate, which has now been deferred until 2004, was always considered the driver behind most STP projects. According to a recent Tower Group report, however, the implementation of T+1 is not a current priority for financial institutions, and is unlikely to become one in the foreseeable future. That said, Tower estimates that over $6 billion is still budgeted for T+1 related initiatives. Most firms recognize the cost benefits and operating efficiencies that can be realized by implementing STP and are moving forward without the T+1 mandate.
Internal STP for your investment operation means single-entry, real-time processing of your trades from the front office through the middle office all the way through to the back office. Don't be fooled. In order to achieve this level of integration, you will need to deploy messaging technology, such as Microsoft's XML. But technology is just the platform. You will also need tools to build messages and services unique to your operation. These tools need to be easy to use. Otherwise, you will find yourself relying on an outside vendor to build messages for you every time something changes in your workflow.
Here's what the experts suggest you ask when evaluating vendors to help you with your STP and messaging implementation:
-Is the system built on proprietary technology? You want a messaging service built on standard messaging technology like XML.
-What tools will you have access to in order to build your own messages, services and workflows? Here is where most vendors fall woefully short. You want maximum flexibility to build your own messages.
-Is "guaranteed delivery" of the messages through queuing available? Don't accept no for an answer.
-Is it possible to interact with the system via the Internet? The Web is here to stay.
SS&C's messaging technology for Straight-Thru Processing is called XE (for Cross-Enterprise) and is built on Microsoft's XML. It is easy to use and manipulate, can guarantee delivery, be used via the Web, and take you to a new level of information technology. You just supply the investment know-how; XE carries your trades straight through to completion.