Risk Management ‘Driving Innovation in Reconciliations’
Risk management and regulatory concerns are driving innovation in reconciliations as more operational executives recognise its critical role in addressing regulation and internal compliance demands, according to the latest annual reconciliations survey conducted by TowerGroup on behalf of SunGard. The research explores the changing face of reconciliations in the rapidly evolving global business environment.
The latest global survey, of 48 banking institutions conducted in July and August 2012, finds that despite efficiency and cost savings remaining key drivers of reconciliations automation, 75% of respondents agreed that regulation is having a significant impact on these processes, which is broadening the role of reconciliations.
Sixty percent of respondents agreed that greater emphasis on liquidity is raising reconciliation focus for intra-day cash and collateral, and increasing the frequency and 63% stated that the introduction of central clearing through Dodd-Frank will drive the adoption of over-the-counter (OTC) derivatives reconciliation automation, further broadening the scope of these processes.
Findings revealed that in response to regulation, risk management is driving innovation across three areas:
“The growing importance of reconciliations is highlighted by the exciting innovations we are seeing around real-time processing, tablet deployment and a broader expansion in operational processes,” said Steve Murphy, research director at CEB TowerGroup. “Our research shows a direct link between the rise of regulation and operational risk management which is driving this innovation.”
Jennifer Hanes, executive vice president (EVP), operations for SunGard’s banking business, added: “While cost and efficiency remain the key drivers for IT investment in reconciliations, the research shows that risk management is causing a major shake-up in this area. Our customers echo the findings of this report as they strive to expand the use of IntelliMatch Operational Control to cover reconciliation of all aspects of their business; from derivatives to ATMs and from end of day processes to sophisticated intra-day and real-time environments.”
In a separate announcement made at this year’s Sibos conference, being held in Osaka, Japan from 29 October to 1 November, SunGard’s said that its AvantGard solutions and services have earned a total of six SWIFTReady labels in 2012.
SunGard’s AvantGard Payments has been awarded the SWIFTReady accreditation for corporates treasury and the SWIFTReady accreditation for corporates cash management, while SunGard’s AvantGard Treasury (Quantum) has been recognised with the SWIFTReady Accreditation for corporates treasury.
The AvantGard Syntesys services team has been recognised with two labels; implementation and integration services and consultancy for corporates, while SunGard’s SWIFT Service Bureau (SSB) has received the SWIFTReady connectivity label.