The asset management reconciliation process has long been accepted by Capital Markets companies as an onerous but necessary cost of doing business. Notoriously resource-intensive, internal reconciliations are problematic, as aligning internal systems with external books of records comes with a number of cross-department and cross-data source considerations that can cause a number of headaches for your company. Given the state of most companies data, greater data control is needed. With effective reconciliation solutions, reconciliation issues can become a thing of the past.
The reconciliations problem
Reconciliation has been described as anything from Capital Markets’ dirty little secret by Tabb Forum’s Dayle Scher to something that perhaps shouldn’t exist. The reality likely lies somewhere between the two but suffice it to say, reconciliations refuse to go away and without a seismic shift in how Capital Markets companies deal with them, they are likely to remain an unwelcome – and expensive – guest for a long time to come.
With margins tight, client expectations high and regulators circling, should you continue to consider reconciliations across internal systems, external systems and everywhere else as a normal, reasonable, cost of doing business? Surely, we can automate our way out of this with reconciliation solutions, or come up with a better plan at least?
In a recent episode of Xceptor’s Unleash Your Data podcast, Jibs Ahmed threw down the gauntlet to Capital Markets firms – to do data properly so that reconciliations no longer need to exist. That, he urged, is what banks should make an ambition.
The need for better data reconciliation and control
Jibs’ argument gives us a neat segue into the need for greater data control. Companies in the reconciliations business are increasingly talking about data control rather than better reconciliation processes. Fixing the data, stemming the tide of internal and external system reconciliations, and reducing your risk profile prevents customer dissatisfaction.
Ignoring the fact that there is a fundamental problem with your company’s data architecture, or repeatedly fixing data problems in isolation for one team, or one process, is never going to work. As Jibs notes:
“The amount of repetition in processing the same data again and again is insane, not only is there an inefficient set of processes there because you have multiple humans doing the same thing with the same set of data. There is an added level of inefficiency, with 4-5 people doing the same task, who will all do it slightly differently, mistakes will be made processing the same data but then you will still have to reconcile the data.”
To truly take control of your data, you need an holistic reconciliation solution that can account for multiple, interconnected data sources that are leveraged across multiple teams and departments. This will increase internal efficiency and productivity, decrease the risks associated with human error, and ultimately improve how your company services customers and handles regulatory obligations.
Reconciliation solutions: pave the way for a frictionless reconciliation process
So, the answer to a streamlined trade reconciliation process lies in data control, which requires a powerful data automation engine to get your data right at the outset. You can start with a single process and that will bring improvements in your process, and your domain, but if you are looking for the true transformation, you need to go further. Go cross-team, go cross-division, go all in. But wherever you start and however big you go, if it is with effective data control, you will be ahead of the game and will inevitably turn heads.
If you get your data right at the outset with a reconciliation solution, you pave the way for a frictionless reconciliation process. With the data right, you can standardize parts of one process that can be repeatedly used in other processes, creating further efficiencies. This also makes for happier employees, enabling your company to make the most of your highly skilled and valuable staff.
We are all familiar with the phrase ‘doing the same thing time and time again and expecting a different result is the definition of insanity’. So, it’s time to stop going for your usual approach to reconciliations and start paying attention to the data, leveraging reconciliation solutions for greater data control, and letting the actual process play second fiddle for a change.
With your data automation house in order and all the process automation functionality you need sitting under one roof, you will improve your matching rates and reduce time-to-market.
Find out how our reconciliation solution can help you take control of your data, or get in touch with our team to learn more about our solutions.