Improving Data Management in the Reconciliation Process

By March 24, 2021 No Comments
Improving Data Management in Reconciliation Process

The correct business decisions can only be made if the data being used to generate insights is clean and accurate. With this requirement, data management has become crucial for funds, especially within the reconciliation process as data is constantly extracted and processed from a variety of different sources.

Although the importance of data management needs no emphasis in today’s environment, there are several instances where this importance becomes more apparent such as when a single rule erroneously aggregates incoherent data or rejects it entirely. With errors like these, managers are required to manually track and identify the data from thousands of records and then change the rule – a rather intensive and time-consuming task.

Oftentimes these scenarios arise due to the fact that current ETL processes, which are central to data management systems, still remain dependent on manual ad hoc research and diagnosis to identify and correct issues – even despite the significant investments that have been made over the years to improve them. Because of this, the reconciliation process is fraught with both technical and functional challenges that managers must find ways to overcome, such as:

  • Non-standardized and diverse data formats
  • Changes in data sources that result in code changes
  • Transformation and aggregation errors that result in incorrect data load
  • Limited data enrichment possibilities
  • Data source optimization to reduce costs
  • Dealing with data correction, inconsistency and discrepancy without compromising data quality
  • Frequent changes in reference data that result in erroneous calculations

By leveraging the right provider and solution, managers can filter through the noise of their data and increase both transparency and efficiency throughout their reconciliation process with the help of:

  • A data-agnostic design to ingest data from virtually any source and system, providing a single interface with custodians, banks and broker-dealers
  • End-to-end independent control to verify, balance, reconcile and track information
  • Automated extraction using scripts, APIs and ETL
  • Robotic process automation (RPA)
  • Incremental real-time data extraction
  • An end-to-end detailed audit and visibility into the business
  • Late file notification emails to client operations staff
  • Unlimited historic data repository

It is safe to say that the era of manual Excel-based reconciliation is ending as this traditional approach is neither efficient nor sustainable – and puts funds at a severe competitive disadvantage in the long run. Ideally, funds need a fully automated, robust and “productized” reconciliation solution that does much more than just alter exceptions and matches. It must be a complete package proven to help reduce operational risk and provide the flexibility funds need to achieve peak performance.

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