Key Takeaways
Financial institutions relying on fragmented, bespoke automation solutions face rising costs and risks. As regulatory expectations become more granular and frequent, siloed approaches hinder scalability, consistency and adaptability.
Transitioning to Straight-Through Processing (STP) begins with adopting a regulator-ready, reusable data layer that supports cross-jurisdictional reporting. Centralizing reporting logic and validation rules ensures consistent interpretation, governance and traceability across all obligations.
STP is more than automation; it’s a strategic shift. Embedding reporting into business-as-usual processes, automating data lineage with AI and adopting modular, scalable architectures enables institutions to respond quickly to regulatory changes and manage growing data volumes efficiently.
As regulatory expectations evolve toward more granular, frequent and standardized data submissions, financial institutions face mounting pressure to modernize their regulatory reporting infrastructure.
With firms turning to increased automations to keep up with the accelerated pace of constantly evolving regulatory frameworks, the siloed automation—isolated implementations—of bespoke solutions across the regulatory reporting lifecycle can create a hidden multiplier effect of increased costs and risks.
This siloed approach isn’t sustainable for the accelerating pace in the regulatory landscape of today and tomorrow. Straight-Through Processing (STP) is a modern approach that can keep up with the ever-evolving regulatory expectations. It's a unified, scalable platform approach that operates as a single, governed system in which an integrated flow of data moves seamlessly from source to submission, without manual interventions or complex, costly integration projects between stages,
Watch the video
Moving from Siloed Automation to Straight-Through Processing
Dan Shmueli, Vice President of Strategy, Regulatory Solutions, Americas, Nasdaq, discusses the criticality of having a strong data foundation with the right processes and technology to enable straight-through processing.
For financial institutions to shift from siloed automation to STP, here are five steps:
Step 1: Adopt a Regulator-Ready, Reusable Data Layer
The foundation for STP starts with a strong data foundation.
Adopt a unified, reusable data layer that aligns with emerging regulatory frameworks, such as those from the European Central Bank (ECB), the Office of the Superintendent of Financial Institutions (OSFI) and the Reserve Bank of India. These frameworks are shifting toward standardized, granular and cross-jurisdictional data requirements.
Look for granular data elements, such as transaction-level details and counterparty identifiers, and aligned data definitions to those used internally and by regulators to reflect regulatory semantics for a single source of truth that be repurposed across multiple reporting obligations, jurisdictions and use cases.
Step 2: Centralize Reporting Logic and Validation Rules
Reporting logic is often embedded within individual applications or spreadsheets.
Create a centralized rules engine that governs how data is interpreted, enriched and validated across all reporting obligations. Having standardized logic in STP ensures a consistent application of the rules, improving governance, control, auditability and traceability from source systems to final reports. Centralized logic helps users quickly identify how each data point was derived, which rules were applied and when changes were made.
Watch the video
Straight-Through Processing: Managing IReF and Regulatory Change
Erik Ibron, Vice President, Strategy, Regulatory Solutions, UK & Europe, Nasdaq, talks about the effectiveness of straight-through processing for financial institutions in managing IReF.
Step 3: Integrate Reporting into Business-As-Usual Operations
STP isn’t merely a technology shift—it’s an operational transformation.
Embed regulatory reporting into business-as-usual (BAU) processes, rather than approaching it as a periodic, reactive requirement.
To realize the full benefits of STP—faster adaptation to regulatory change, faster responses and lowered reconciliation costs to name a few—integrate reporting workflows with upstream systems such as risk management and finance to improve data quality and data completeness at the source.
Regulatory reporting teams need to collaborate closely with data owners, IT and business units to ensure that reporting requirements are considered during system design and operational planning.
Step 4: Automate Data Lineage and Traceability
Leverage AI, within strict governance boundaries, to accelerate traceability and augment human expertise—not replace human oversight.
With AI-enhanced regulatory reporting and STP, natural language prompts can generate transparent, reviewable queries over regulatory data, with results traced to source, and retrieve official texts and notices that provide cited recommendations.
Watch the video
Straight-Through Processing: Managing Regulatory Change in the U.S. and Canada
Dan Shmueli, Vice President, Strategy, Regulatory Solutions, Americas, Nasdaq talks about the value of straight-through processing for financial institutions in the U.S. and Canada.
Step 5: Adopt Scalable, Modular Technology Architecture
Legacy systems often lack the flexibility to support STP.
Look for modular, scalable architectures built on microservices, APIs and cloud-native technologies. These enable faster adaptation to new reporting obligations, seamless integration with internal systems and elastic scalability for managing the soaring data volumes in the regulatory reporting lifecycle.
Modularity supports incremental innovation, giving firms the flexibility to add capabilities without disrupting existing workflows.
Shifting to Straight-Through Processing
A transition from siloed automation to STP isn’t a one-time project. It’s a strategic journey. Firms looking to keep up with the accelerated pace of regulatory change by modernizing should start small. Begin by piloting STP on a live regulatory change to minimize disruption, document the learnings to refine the approach and build momentum—and then expand.
Amid ever-evolving updates to regulatory frameworks, STP is the platform approach that meets the modern demands of regulatory reporting.
Beyond Automation: Why Straight-Through Processing Is the New Standard for Regulatory Reporting
To learn more about meeting the modern demands of regulatory reporting, download Nasdaq’s whitepaper on the fundamentally different approach that goes further than ‘just automation.’
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