EDI
Electronic Data Interchange
Computer-to-computer exchange of business documents in standardized electronic format.
EDI enables automated processing of business transactions including trade confirmations, settlement instructions, and corporate actions notifications without manual intervention. Standard formats like ANSI X12 and UN/EDIFACT provide structured document templates for various business processes. EDI implementation requires Value Added Networks (VANs) or direct connections between trading partners with agreed message formats and protocols. Benefits include reduced processing time, lower error rates, and elimination of paper-based workflows. While newer technologies like APIs and web services provide alternatives, EDI remains important for established business relationships and high-volume transaction processing. Financial industry uses EDI for various applications including institutional trade processing, custody operations, and vendor payments.
Example
Institutional trade settlement instructions, custody account statements, vendor invoice processing