Reconciling data manually is, more often than not, a good choice for firms just starting out. It requires minimal initial setup, almost no cost, and no development projects to implement. However, as the organisation grows, so too does the risk of errors. As data increases in volume and complexity, firms quickly realise that their lack of governance and audit trail, two of the foremost limitations of manual data reconciliation, become a real issue and risk to their business. This is also the point at which macros start to become increasingly complex. This is a precarious point for firms that, as a result, can end up with a limited number of VBA experts. This leaves them very exposed in terms of personnel and expertise. Furthermore, scaling becomes increasingly expensive as it requires more and more people input. Manual reconciliation has thus become unsustainable. 

Transitioning to a more robust solution is a no brainer in this scenario. Some firms start with a hybrid approach by only automating high volume, low complexity reconciliations such as Cash or Custody. However, to handle the rest of the data, organisations will still need a number of people involved. A recent study by Aite Group revealed that one Tier-1 bank employed over 3,100 full time employees dedicated to reconciliation alone.

Jumping to a complete automation solution is not as straightforward as doing manual or hybrid work. Initially, it is more expensive and time consuming. However, the long term benefits can be remarkable, if deployed correctly. The key to successfully transitioning to automated reconciliation successfully lies in choosing the right technology for your firm. 

If you are wondering whether to build or buy a solution, we recommend you read this extensive analysis on the topic >> Here. 

What to look for when choosing an automated reconciliation solution: 

    1. Flexible data capture with automated access to a:
      • Primary Internal Source (such as data held in your Product Master)
      • Secondary External Source (such as custodian data)
    2. Fast onboarding time – Aite Group reports that the average time to onboard a simple reconciliation is over 17 business days on average, while a complex reconciliation takes 74 days. Fundipedia is significantly faster.
    3. Centralised digital data collection, aggregation, and normalisation tool –  ideally, sourcing from the widest possible counter parties. Daily connectivity, and the ability to deal with multiple file types, is also essential
    4. Automatic “First responder” – exception prioritisation and assignment to ensure staff remain focused on areas of greatest impact,  with the ability to mark and set aside pending items to be resolved later
    5. Real time editing capability – enables staff to add or replace data and track exceptions
    6. The possibility to automate rudimentary or recurring steps of data collection and processing – ensure focus is solely on data exception management
    7. Intelligent, customisable dashboards – provides a clear view of critical, enterprise-wide data, as well as forecasting growth and sending alerts regarding trends or future changes in the state of data
    8. Existence of a data quality engine – fully customisable with user-defined tolerances
    9. Sophisticated ability to identify exception root causes, and aggregate similar exceptions –  long-term resolution of these issues assured
    10. Production and efficient distribution of easy-to-read, high quality reports
    11. Audit trail support – record all actions undertaken during the reconciliation process

Fundipedia is a product data management platform that provides all of the above capabilities to our clients. Fundipedia is built in partnership with, and delivered to, the Asset Management industry. With Fundipedia’s Reconciliation Module you can be up and running as early as 7 days after the initial demonstration.

 The Fundipedia platform is specifically tailored for tier one Asset Management companies. Our innovative technology enables you to disseminate and reconcile any type of data—providing you with end-to-end control and insights that drive smart business decisions and the confidence to meet regulatory requirements.

You can find detailed information here on what to expect when working with Fundipedia. 

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