With the continued acceleration of asset management’s digital transformation, many managers have begun fully automating the routine, resource-intensive operational burden of reconciliation. However, some managers have opted to settle for disparate and semi-automated reconciliation systems, which can increase operational risks and oftentimes opportunity loss due to the unclear picture it presents on resident cash.

Moreover, a semi-automated reconciliation system is highly dependent on the user’s own activity of tracing down the cause and removing breaks, which can be severely impacted by macroeconomic forces such as increasing business volumes, rapid economic turnarounds, regulatory instability and investor scrutiny.

To overcome the hurdles associated with the reconciliation process and to reach the “settled state of affairs,” asset managers must begin by addressing several business and technology factors currently present and their resulting implications, such as:

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

While eliminating the inherent tardiness from the reconciliation process can appear challenging, it also provides an opportunity for asset managers to achieve dramatic improvements in cross-functional efficiency and a competitive edge over others. With a fully automated reconciliation solution, asset managers not only reduce the operational risks brought in by semi-automated manual oversight, but it can also serve as a key element to a fund’s internal control and sound business practice.

Due to the fact that efficient reconciliation is directly linked to some of the most successful players in the asset management space, funds must start exploring the automated tools that are necessary to improve their process. Learn more about IVP’s Reconciliation Solution, or contact us directly at sales@ivp.in.