As asset managers continue their digital transformation journey, many have found success by fully automating the complex and operationally burdensome reconciliation process. However, some managers have opted to settle for disparate and semi-automated reconciliation systems, which can increase their operational risks and opportunity loss due to the unclear picture it presents on resident cash.

Moreover, semi-automated reconciliation systems are highly dependent on users’ own activity of tracking down the root cause of breaks and removing them. With this, asset managers must address the key implications resulting from their use of semi-automated systems and the more specific disadvantages they present throughout the reconciliation process, including:

Operational Loss

  • Time and cost overhead
  • Error prone
  • Non-standardized procedures
  • Lack of an automated escalation process

Regulatory Loss

  • No standard audit and reporting procedures in place
  • Lack of desired granularity in reports

Reputational Loss

  • Little to no investor reporting
  • Lack of standard control procedures
  • Lack of trust

Performance Loss

  • Improper use of key resources
  • Lack of real-time data analysis

Although shifting from semi-automated to a fully automated reconciliation system can appear to be a daunting undertaking at first, the move will ultimately provide an opportunity for asset managers to achieve dramatic improvements in cross-functional efficiency and a competitive edge over others. With a fully automated system, like IVP’s Reconciliation Solution, asset managers can reduce the operational risks brought in by semi-automated manual oversight and, instead, generate operational alpha.

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