In the past, payments were initiated through numerous "human-friendly" (also known as paper-based) means, such as a human through a paper order, over the phone, or via fax.
The process before STP was very antiquated: sales traders would have to fill in a deal ticket, blue for buy and red for sell.
The concept has also been transferred into other sectors including energy (oil, gas) trading and banking, and financial planning.
[1] Currently, the entire trade lifecycle, from initiation to settlement, is a complex labyrinth of manual processes that take several days.
Market conditions fluctuate, meaning a two-day window brings an inherent risk of unexpected losses that investors may be unable to pay for, or settle, their transactions.
Industry practitioners, particularly in the United States, viewed STP as meaning "same-day" settlement or faster, ideally minutes or even seconds.
In particular, transaction data would need to be made available on a just-in-time basis, which is a considerably harder goal to achieve for the financial services community than the application of STP alone.
When fully implemented, STP is able to provide asset managers, brokers and dealers, custodians, banks and other financial services with benefits including shorter processing cycles, reduced settlement risk, and lower operating costs.