What are the hallmarks of an optimized reconciliation process, from handling straightforward securities like equities to complex fixed income such as OTC derivatives, or digital assets? First, there’s instrument coverage and staff expertise across the asset class universe. Your service provider should have asset-specific expertise to map out the data points required to reconcile transactions, positions and cash balances. Second, world-class technology. Excel has stepped up its capabilities, but that’s still a manual process with the risk of human error—errors that can lead to bad information that can result in delays in break resolution and poor decisions due to lack of transparency. Artificial Intelligence (AI) is changing the reconciliation landscape, as it can reconcile a million rows in minutes, based on the complexity of the matching rules. Also, your service provider should be able to resolve exceptions using technology that can auto-match multiple sets of data. Finally, there’s transparency, to make sure clients can view the process and the data.
As the backbone of your operations, choose a service provider that:
Leverages technology that providesbothspeed and accuracy, and that runs efficiently. The right technology is flexible, and nimble and can receive unstructured data from multiple sources and structure it regardless of asset type.
Has expertise that gives you confidence that the people reviewing the exceptions understand what they’re looking at.
Has a client communication process that ensures that the service provider will be able to provide root cause analysis on re-occurring issues and how to systemically resolve them going forward.
Can provide reconciliation analytics to inform you how precise your investment book of record is by the start of the day, ideally through a user-friendly dashboard.