What makes a Perfect Reconciliation Solution?

What makes a Perfect Reconciliation Solution?

By Capital Markets CIO Outlook | Wednesday, September 18, 2019

Choosing the right reconciliation solutions with relevant features helps capital market firms to gain maximum benefits and enhance the ease of operation.    

FREMONT, CA: The use of technology-based reconciliation solutions and platforms by capital market companies has increased over the last few years. The practice of reconciliation is not new for capital market firms. However, the approach to how firms undertake reconciliation has changed. By opting for managed reconciliation services and third-party software solutions, companies are able to apply advanced technologies to drive efficiency and accuracy into reconciliation. The evolving risk of the regulatory landscape has been one of the reasons behind capital markets, making reconciliation a priority. Today, businesses are ready to invest in outsourcing reconciliation or subscribing to professional reconciliation management suites. To pick the correct service provider, it is imperative that companies are aware of the essential elements that make a reconciliation solution impactful. Here is a list of the crucial features that every reconciliation solution should ideally have.

• Automated Record Keeping and Account Matching

The flow of data from internal and external sources has to be streamlined for making the process of reconciliation successful in capital markets. Automation-enabled reconciliation solutions are the best fit in such cases. The firms deal with a vast amount of financial data and statements. To keep a tab on trade-related transactions in real-time, the process has to be fast. While manual reconciliation of accounts has been in use over the past, automation is central to effective reconciliation today. With the facility of automation incorporated into software programs, systems can conduct recurring tasks and provide accurate matching capabilities. Manual tasks are prone to errors, but with machine learning and artificial intelligence-backed platforms, account-matching becomes faster and completely error-free. Features that give companies access data to compare and identify matches are highly desirable.

• Ability to Centralize Data

To carry out efficient reconciliation, the solution must be compatible with the existing IT infrastructure and should align well with the systems. The information in the firms is present in silos, and a solution that can centralize the data before carrying out reconciliation is beneficial for companies. It removes challenges that prevent full-scale and consistent reconciliations.

• Scheduling Reconciliations and Generating Alerts

The best reconciliation products are those that have the feature which allows scheduling of reconciliation. When there is an option for scheduling, the process will start automatically at predetermined periods. This makes reconciliation foolproof. Along with that, the solutions must have the tools that make it easy to detect anomalies. Automation in reconciliation is valuable only when anomaly detection can be optimized. A system of alerts can reduce the risks of financial mismanagement and ensure that companies are compliant with regulatory frameworks.

• Potential to Handle High Volumes and Varied Data

The economy is becoming global, and so are the capital market firms. Trade volume is rising, and thus, intelligent reconciliation solutions are those that have the capacity to handle the demand. Trading in capital markets means that the firms have to depend on a variety of data types related to parameters such as instruments used, geography and platform of exchange. An ideal solution is that which can comprehend information easily and thus is able to compare and investigate security identifiers effectively. Multi-currency support is another desirable factor in the shrinking world of capital markets today for which the firms must vouch.

Timely resolution of account-related activities is central to the glitch-free operation of capital market players. The right capabilities in reconciliation solutions not only make the process error-free and fast but also assist companies in increasing profit margins and ensuring compliance.    

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