Gresham study finds over 60% of firms are unable to reconcile financial transactions in real-time despite need to comply with new regulation

London - 29 October 2012

89% of respondents encounter delays when on-boarding new financial products

Gresham Computing plc, a leading provider of transaction control solutions to international financial institutions, today announced the results of a recent survey exploring financial institution’s readiness for real-time reconciliation. Respondents to the survey include investment banks, inter-dealer brokers and buy-side firms in New York and London.

New upcoming regulations such as Basel III and Dodd Frank are expected to result in additional reconciliations required between different systems – for example to ensure Margin calls from Central Counterparties are reconciled in real-time as there may only be a matter of minutes to deliver collateral to satisfy the margin call. Failure to do so may result in the wrong amount of collateral being delivered with consequent opportunity costs and increased manual work loads.

Findings of the survey include:

  • 60% have not yet embarked on real-time reconciliation for any of their asset classes and do not expect to be in a position to move to real-time reconciliation by the end of 2013;
  • 89% of respondents encounter delays or problems when on-boarding new financial products and putting the necessary risk controls in place.
  • To overcome the on-boarding delays:
    • 43% are forced to bypass the main reconciliation system and set up work-arounds in Excel, Access and other similar applications;
    • 13% set a limit on the number of new products that can be created to avoid building too much of a backlog;
    • 19% simply add the new requests to their existing reconciliation backlog.
  • When asked about their state of readiness for intersystem reconciliation:
  • 44% said they are looking at this but are concerned there will be delays due to the limitations of their existing systems;
  • 33% said they haven’t started looking at this and are not yet clear on the final requirements.

“The findings of this survey are consistent with the conversations we’ve been having with banks and other financial institutions across the world. The vast majority are struggling to on-board new financial transactions in a timely and cost-effective way and many are still using work-arounds in Excel. New regulations are now putting them under pressure to put in place enterprise-grade solutions that allow rapid on-boarding of new financial products as well as real-time reconciliation,” said Neil Vernon, Development Director, Gresham Computing. He added. “Our understanding of this issue has allowed us to prioritise support for rapid on boarding over the last year – so that Gresham’s CTC solution can on-board new reconciliations in minutes not hours or days, within the framework of a modern reconciliation solution that is enterprise-ready.”

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