Skip to the main content.
Featured Image
BLOG. 3 min read

Reimagining Investment Data Reconciliation To Support Growth, Savings

Against the backdrop of macroeconomic challenges, global asset managers are facing a dilemma, as falling revenues across the industry in 2022 hit both management and performance fees, while the need to spend on technology upgrades to enable growth and serve clients continues unabated. How does a firm manage costs, boost profitability and support client needs simultaneously?

Institutional asset and wealth managers should take a close look at upgrading operational systems as a way to reduce costs and advance effectiveness through the latest technology. A good candidate for upgrading is the reconciliation process, for which many firms still employ a time-consuming and risk-laden process, where spreadsheets and manual work make for an inefficient and unsustainable approach that severely limits firms’ profitability, service and growth.

Automating reconciliation processes and implementing exception-based workflow best practices offers firms easy wins in the quest for greater productivity, performance, efficiency and profitability. Replacing an error-prone, manual file-matching process or creaky legacy system with a time-saving, accurate and automated environment offers significant advantages on multiple fronts.

  • Improved client service—deliver accurate and timely reconciled data to client reports, self-service portals and the advisors who serve your customers. 
  • Informed investment decisions—provide your portfolio managers and traders with up-to-date cash balances, transaction details and portfolio positions.
  • Increased productivity—handle today’s increased data volume, variety and velocity via automated, exception-based reconciliation, which in turn allows staff to focus on higher-value functions in operations, client service or other areas of the company.
  • Enhanced growth—scale to support greater volumes—from increased trading, new client acquisition, new lines of business, etc.—without having to ramp up staffing levels.
  • Insight on service delivery—gain enhanced visibility into counterparties’ service delivery and quality to identify potential process improvements.
  • Enhanced compliance—reduce errors and operational risk, ensure standardized procedures, and maintain accurate activity records and audit trails to demonstrate compliance when needed, and keep pace with regulatory requirements.

An effective reconciliation environment requires a solution that can capture, validate, match and report data from a wide range of internal and external sources. And when breaks occur, a sophisticated solution will assist the exception management process by automating as many functions as possible, thereby increasing efficiency, cutting costs and reducing errors.

Where should asset and wealth managers begin on their journey to reconciliation optimization?

  • Identify the various stages needed in the reconciliation workflow; for example, custodian reconciliation, NAV reconciliation, reconciling with other internal systems or whatever stages your firm must address.
  • Fully understand your areas of risk so you can design policies and procedures to limit exposure.
  • Focus on making each workflow stage as efficient as possible, and thereby ensure the whole reconciliation process runs smoothly with automation and advanced technology.
  • Ensure your technology choice offers:
    • Flexible data capture with automated access to primary and secondary sources.
    • Centralized electronic data collection, aggregation and normalization.
    • Immediate transaction amendment capability.
    • One-time mapping configurability to automate rudimentary or recurring steps.
    • Customizable rules-based matching engine with user-defined tolerances.
    • Sophisticated investigative tools.
    • Automatic exception prioritization and assignment.
    • Management dashboards, customizable by role, for a clear view of critical data.
    • User-friendly report production and distribution.
    • Audit trail support to record all actions undertaken during the reconciliation process.

Introducing automated, exceptions-based processes to reconciliation—with all the cost reduction, error minimization and scalability advantages it brings—is one of the most effective ways for wealth and investment managers to gird themselves for whatever changes and challenges lie ahead. While automation in itself may be no guarantee of success, a scalable and repeatable process will provide the foundation for stability and growth.

Download our "SS&C Aloha Recon – Reconciliation Reimagined and Automated" brochure to learn more about our new and highly innovative investment reconciliation solution that reimagines investment operations and provides for streamlined operations and lower total cost of ownership


Related articles

2023 SS&C Retirement Income Review & 2024 Outlook
BLOGS. January 31, 2024

2023 SS&C Retirement Income Review & 2024 Outlook

Read more
Reconciliation: What to Look For in a Service Provider
BLOGS. September 14, 2022

Reconciliation: What to Look For in a Service Provider

Read more
Solutions to the Retirement Industry Advice Gap: Broadening the Lens
BLOGS. July 14, 2022

Solutions to the Retirement Industry Advice Gap: Broadening the Lens

Read more