Straight-Through Processing for Optimized Operations

June 23, 2023

Businesses across industries are adopting straight-through processing (STP) to streamline their operations and eliminate manual bottlenecks.

Whether it's finance, insurance, e-commerce or any industry where fast and error-free processing matters, straight-through processing is the key to operational excellence.

What once may have taken days can now be processed in mere minutes with STP transactions.

What is Straight-Through Processing (STP)?

Straight-through processing refers to automated processes that are performed digitally and do not involve any manual labor. For instance, financial companies use straight through processing to speed up electronic payment processing without compromising security. 

Having fewer physical touch points reduces the amount of labor required to accomplish certain tasks.

Benefits of Straight-Through Processing

Traditional payment processing required the accounts receivable team to complete multiple steps before confirmation, such as confirmation over the phone and making the necessary preparations with various departments before the payment could be made.

Straightforward processing of payment settlement data provides companies with several benefits including:

  • Streamlined payment instructions
  • Shorter transaction processing times
  • Quick electronic transfers
  • Improved cash flow efficiency
  • Elimination of manual intervention and erroneous financial transactions

Straight through processing allows an organization to do away with standard processes like verification, payment checks that require a supervisor, and tedious manual data input/management.

Straight-Through Processing in Different Industries

Business rules engines are necessary for efficient straight-through processing. These pluggable pieces of software provide a flexible and efficient way to manage complex business logic and decision-making criteria into a group of rules that can be run automatically.

By automating mission-critical processes, rules engines empower companies to easily perform complex tasks, such as validating input data, executing transactions, minimizing payment errors, and maintaining regulatory compliance.


In the insurance industry, straight-through processing is reflected in automated management of claims along with the streamlined evaluation and approval process of insurance policies.

By defining and managing complex business rules within the rules engine, insurance companies benefit from consistency, accuracy, and efficiency in their straight-through processes.

The business rules engine evaluates risk factors, policy coverage, and other factors to determine premium rates and claims eligibility.

This accelerates the underwriting and claims settlement processes, which results in instant response times.


Given the ability to instantly create and change business rules, global financial companies deploy business rules engines to automate compliance checks, risk assessments, and transaction processing.

The business rules engine validates customer data, regulatory requirements, and, if necessary flags suspicious activities for further review.


A well-configured STP system enables e-commerce businesses to authenticate their customers, offer relevant products, initiate payment transactions, and set delivery of purchased items, with just a few clicks.

Many e-commerce businesses sell products internationally, which is why STP systems verify customs documentation and shipping labels, which directly cuts down on error-prone manual processes.

E-commerce stores need to quickly process large volumes of orders. The engine can apply business rules to evaluate the order data and trigger appropriate actions.

For example, if an order passes all the pre-defined requirements, the business rules engine can automatically generate a shipping label and notify the warehouse for immediate processing.

By deploying business rules engines, online retailers can automate various aspects of the sales processes such as data validation, product availability, payment verification, and fraud prevention.

Fraud Prevention

By connecting their software systems to business rules engines, online retailers design fraud detection rules based on known fraudulent patterns, transaction limits, and other suspicious activity. The engine can automatically evaluate incoming orders against these rules in real-time, flagging potentially fraudulent transactions for further review or validation.

Dynamic Pricing

E-commerce businesses frequently run various dynamic pricing strategies and promotional campaigns to generate more sales. A business rules engine can automate dynamic pricing using rules-based on specific factors, such as discounts, bundling, or free shipping.

A rules engine can be configured to apply relevant pricing rules, calculate the final price, and display it during the checkout process.

In addition, the engine can evaluate return requests, validate eligibility criteria, calculate refund amounts based on predefined rules for each product or category, and initiate necessary actions.

For instance, if a return request meets the requirements expressed through business rules, then the rule engine can automatically approve the refund, or notify the customer, thereby reducing the need for manual input.

Straight-Through Processing with Higson

Higson comes with a user-friendly interface for rule authoring that empowers non-technical business analysts to create or update and modify new rules easily without the help from the IT department.

This empowers companies to respond rapidly to changing market conditions, customer requirements, or regulatory updates. For instance, an e-commerce brand that has implemented straight-through processing using rules engines can instantly change pricing rules or promotional offers as it sees fit.

Discover how Higson can become your trusted partner in the pursuit of operational excellence, laying the groundwork for seamless and accurate processes. Get in touch with our Higson experts today!

Get a personalized evaluation of Higson's potential for your use case
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