Aite Benchmark confirms need for next gen reconciliation technology

London - 27 June 2013

Gresham CTC in spotlight as industry front-runner for rapid onboarding and real-time processing

Gresham Computing plc today announced the findings of a benchmark study conducted by Aite Group exploring some of the key challenges financial institutions face when onboarding new reconciliations.

Aite conducted in-depth interviews with three tier-one investment banks, one tier-two investment bank and one tier-one investment manager. As a result of these one-on-one interviews, Aite found that issues such as manual processing, complex intersystem reconciliations, key person risk and rising costs are driving these firms to consider next generation reconciliation technology.

The benchmark study also highlights some of the challenges facing the financial institutions surveyed:

  • In-depth interviews show CTC able to onboard new reconciliations rapidly; for one client in a seven-day cycle compared to the current 60-day cycle.
  • The majority of reconciliations still take place in applications such as Excel – one tier one bank estimates this at 70-80%
  • The cost of maintaining multiple instances of reconciliation platforms and workarounds is significant
  • Onboarding one reconciliation into a traditional platform can take as long as six months
  • The onboarding process for new reconciliations can tie up a lot of staff – at one tier-one bank the process involves a team of 15 to 20 members with a significant effort required to get the data into a format suitable for reconciliation

“Reconciliations is finally having its moment in the spotlight,” said Virginie O’Shea, analyst at Aite Group. “In the next few years there will definitely be a tipping point towards migrating onto more user-friendly solutions. Many firms are currently reviewing existing and legacy systems due to increased business and regulatory pressures. It’s likely that there will be an industry shift to a more centralised model that can handle real-time and intraday processes.”

“Most vendor deployments of reconciliation solutions are specifically tailored for back office cash flows and securities movements,” said Neil Vernon, CTO, Gresham Computing. “The needs of the middle office, processing much more complex instruments have largely been ignored and most middle offices reconcile using spreadsheets. These more complex instruments are now moving to central clearing with real-time T0 demands and traditional systems no longer fit the bill. The findings of the Aite Benchmark highlight that increasing volumes of data coupled with multiple systems and manual processes are hampering efforts for real-time reconciliations. At Gresham, we’re dedicated to helping our clients shorten the reconciliation process and operate more efficiently.”

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