October 24, 2013

Over half of all firms surveyed are using more than 10 reconciliation processes, which could cause inefficiencies from fragmentation, according to the Assessing the Global Enterprise Reconciliation Market – Avoid Complacency to Optimize Enterprise Reconciliation survey by CEB TowerGroup. The report was commissioned by SunGard.

Over a third of the 70% of respondents claiming to maintain and monitor an inventory of all their global reconciliation activities are doing so when needed or on an unscheduled basis with large gaps in cash, payments and securities workflows.

Richard Chapman, director of product management for SunGard adds, “To optimize the performance and cost-effectiveness of this activity, we believe they should tackle three main challenges of fragmentation and delivery quality to help ultimately meet their goal of achieving smarter operational efficiency,” in a release.

According to the report by CEB TowerGroup, “firms are starting to look beyond the silos of line-of-business reconciliation tasks. Adopting active inventory management and firm-wide performance monitoring will allow them to target the benefits of adopting a service-based target model which positions reconciliations firmly at the heat of enterprise performance.”

Additonally, 25% lack insight into how their institutions perform custody and broker reconciliation and 30% are unaware of how they reconcile mortgages, loans, derivatives, and commodities.

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“To reduce blind spots on their reconciliation map and optimize reconciliation processes right across their business, firms need to implement an enterprise-wide reconciliations inventory along with organizational changes and technology improvements,” says Gert Raeves, research director at CEB TowerGroup in a release.

While attempting to measure technological improvements, the survey found that 17% of respondents had automated performance monitoring at the enterprise level. About 14% were replying on spreadsheets and other manual workarounds for performance monitoring, according to the report.

To plan for future improvement, 26% are planning on adopting a center of excellence model, while 21% are investing in infrastructure. About 10% were planning on investing in a business process outsourcing provider.

CEB TowerGroup surveyed 117 senior operations and IT executives from commercial banking, treasury management, retail banking, transaction banking, securities services, investment banking and other firms with complex or diversified reconciliation needs, according to a release.

ABOUT THE AUTHOR
Zarna Patel is a staff writer for InformationWeek's Financial Services brands, which include Bank Systems & Technology, Insurance & Technology and Wall Street & Technology. She received ...