Improving efficiency and client service with automated reconciliation

By: Gareth James

Reconciliation underpins several vital investment management functions, yet it is often overlooked when firms are automating their processes. By automating reconciliation, firms can improve performance, increase client satisfaction, and strengthen their business.

At SS&C, we believe automating the reconciliation process provides five key competitive advantages:

  1. Improved client service. Investors want interactive client portals that provide immediate access to accurate, complete data through sophisticated reporting. This data must be cleaned and checked before it is client-ready. This requires daily comprehensive reconciliation, which necessitates a robust and automated workflow.
  2. Informed investment decisions. The front office also needs accurate, timely, and complete data, and its availability directly impacts investment performance. If the front office holds cash it’s not aware of, it may result in missed trading opportunities and underperformance against the benchmark. If a position is valued incorrectly, it may result in under-hedging or a compliance breach.
  3. Increased productivity and business growth. Manual reconciliation is time-consuming and inefficient. Processes that take days or weeks of expensive and error-prone manual effort can be automated into tasks that take just hours or even minutes. With automation, firms can handle ever-increasing volumes without impacting quality, timeliness, or efficiency. 
  4. Service delivery control. An exceptions-based model provides firms with valuable insight into their counterparties’ service delivery. With sophisticated monitoring and reporting tools, recurring breaks can be pinpointed. This identifies where internal and third-party process improvements are needed.
  5. Enhanced compliance. An automated reconciliation and exception management system reduces errors and operational risk, ensures standardized procedures, and maintains accurate activity records and audit trails for regulatory reporting. A firm that fully automates its processes is in a better position to demonstrate compliance when required, and to keep pace with the increasingly complex regulatory requirements and due diligence expected of its investors.

In its whitepaper, best practices in reconciliation, SS&C outlines 10 steps to happier clients and better performance. Investment firms face challenges from soaring trade volumes, increasingly complex transactions, and mounting pressure for faster reconciliation. At the same time, this presents an opportunity for differentiation. SS&C Recon is a fully-automated reconciliation system. It receives data from all your custodians, conducts the required reconciliations on a defined frequency, and feeds the output data directly into downstream systems, without manual intervention. At its core, it is a scalable and asset-class-agnostic reconciliation system, with flexible, streamlined, and automated exception management workflows. To learn more about Recon and how we can help automate your processes, contact Richard Hutton at +44 (0)20 3310 3309.