We recently worked with Aite Group on a benchmark survey exploring the reconciliation challenges facing financial services firms. The benchmark threw up a number of interesting findings around issues such as an over-reliance on manual processes, delays in onboarding and issues in handling non-standard and inter-system recs. In this first of a series of blogs on the benchmark findings, I will examine how a ‘one-size-fits-all’ approach no longer fits the bill.
Many banks are trying to use yesterday’s methods to solve today’s challenges. Shoehorning complex reconciliations into an existing model designed to process cash and nostro accounts simply won’t work for today’s more complex products. Even if another model is created, the time and costs outweigh the benefit so they turn to their beloved spreadsheets. Despite having numerous reconciliation platforms, 70-80% of reconciliations are still taking place in Excel.
And what happens if you’re only looking at conducting reconciliations once or twice? Do these recs continue to be done manually? The time and effort required to build a one-off rec is a wasted effort and there is no opportunity for future reuse.
Financial institutions might be compelled to stick to spreadsheets but this rudimentary tool equals increased cost and risk. The solution? Firms need to think outside the nostro box and look for a system that can eradicate their manual reconciliation footprint and provide results in real-time.
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