Straight Through Processing (STP) is a standard-enough term, but what really promotes STP when sending financial messages? The answer is an ISO-accepted format called a Bank Identifier Code or BIC.

Without BICs, it would be virtually impossible to send a financial message that could be processed with minimal or no manual intervention. We’re not just talking about payments here, but rather any sort of financial message — interbank confirmations, trade finance messages, securities instructions, bank statements, credit/debit advices…the list goes on.

Without the standardization offered by a BIC, all manner of problems would occur. I say “Nat Bk of Egypt”, you say “Natl Bnk of Egypt” and they say “National Bank of Egypt”. As such, without BICs, processing systems would need sophisticated Artificial Intelligence to read the free-format name before recognizing it as an identified bank or corporate entity.

Having a BIC — whether or not it’s “connected” to the SWIFT network — is vital to STP when processing any sort of financial message. If you have a database fully armed with
BICs and allied with accurate payment routing data, very high levels of STP can be
achieved. For those institutions that follow best practices, Accuity has seen payment STP rates above 97%.

If your organization is not performing at this level, it may make sense to evaluate your processes. From a corporate standpoint, payment repair charges are thus kept to a minimum and operating costs are lowed considerably. Banks, too, reap the rewards as they can reduce the operational manpower needed to support manually-repaired failed payments thus creating a more profitable business vertical.

So, in the end the question really isn’t “to BIC or not to BIC” but rather “better to have BIC’d than not BIC’d at all”.