Overall, the survey found that managing the quality and effectiveness of enterprise-level reconciliation is an ongoing challenge for firms, citing a lack of operational maturity and fragmented automation as obstacles to an optimized, scalable and operationally efficient enterprise reconciliation environment. SunGard recommends that in order to help mitigate the potential for poor customer service and system inefficiency that firms need to actively maintain an inventory of reconciliation tasks and automate the monitoring and optimization of all processes within it. This is based off the following findings:

Fragmented enterprise reconciliation: Firms recognize the complex challenge that reconciliations best practice represents, especially given high levels of functional, operational and technology fragmentation. 51% of survey institutions report 10 or more different systems performing reconciliation functions; a quarter use more than 20 systems across their global enterprise.

Confidence in core capabilities but many blind spots: Executives are only well-informed and confident about their reconciliation practices across a narrow subset of mainstream core activities and asset classes. They report the highest amount of confidence in completing general ledger and balance sheet reconciliations, and the core reconciliation of cash, foreign exchange and securities. But 25% lack insight into how their institutions perform custody and broker reconciliations, and nearly 30% “don’t know” how they reconcile mortgages, loans, derivatives and commodities.

Contradictory evidence of optimization efforts: A reconciliations inventory is probably the most important tool for improving reconciliation performance, and a surprisingly high number of firms (70%) claim to have one. Far fewer, however, are getting true benefits and maximum value from their inventory by monitoring the actual execution of tasks against it in real time. Only 17% of respondents carry out automated performance monitoring at an enterprise level, with 14% still relying on spreadsheets and other manual processes. For another 40%, there is no centralized management of maintenance tasks – casting doubt on just how much rigor and discipline is really applied, and showing that firms overestimate the maturity level of their enterprise optimization capabilities.

Investment strategies “of excellence”: Institutions understand that improving performance across more reconciliation types and asset classes is an extremely useful and realistic goal. Adopting a center of excellence model is the preferred investment strategy for improving the reconciliations function for 26% of respondents. Alternative delivery models such as software-as-a-service (SaaS) and business process outsourcing (BPO) are a significant and growing trend, with more than a fifth of respondents expressing a preference for not-on-premises strategies.

Gert Raeves, research director, CEB TowerGroup commented: “True enterprise reconciliations may not have arrived quite yet, but the tools and opportunities for optimization are already at the industry’s disposal. To reduce blind spots on their reconciliation map and optimize reconciliation processes right across their business, firms need to implement an enterprise-wide reconciliations inventory along with organizational changes and technology improvements.”

Richard Chapman, director, product management for SunGard’s IntelliMatch business, said: “Within financial institutions, reconciliation centers of excellence are service providers and they are responsible for delivering multiple and complex sets of processes on a daily basis and a global scale. To optimize the performance and cost-effectiveness of this activity, we believe they should tackle the three main challenges of fragmentation and delivery quality to help ultimately meet their goal of achieving smarter operational efficiency.”

*During Q3 2013, CEB Tower Group conducted a technology survey to understand the state of the global reconciliations market. The survey was aimed at firms with complex or diversified reconciliation needs. The majority of executives who participated were from Tier 1 and Tier 2 institutions, with assets under management in excess of $100 billion. For a copy of the full research report, Assessing the Global Enterprise Reconciliation Market – Avoid Complacency to Optimize Enterprise Reconciliation, please contact Melanie Hesketh: melanie.hesketh@sungard.com

About CEB TowerGroup
CEB TowerGroup is an independent research, data analysis and advisory group. Its research and analyst expertise covers the data and tools that the buy and sell sides use to analyze, trade, report, and process equity, fixed income, and derivative securities. CEB TowerGroup focuses on technology in the context of the business environment, making sure issues of regulation, market structure, and business models are top-of-mind.

About SunGard’s IntelliMatch Enterprise Management Studio
SunGard’s IntelliMatch Enterprise Management Studio is an automated reconciliation tracking solution that helps financial institutions improve their ability to deliver the right processes at the expected time to their internal clients. The studio helps reconciliation centers to catalogue expected and mandatory behavior across the entire reconciliation landscape. It also helps monitor the technical and business performance of processes in real time and over time and respond rapidly to issues in order to help improve service quality and efficiency for their customers. For more information, please visit www.sungard.com/intellimatch.

About SunGard
SunGard is one of the world’s leading software and technology services companies. SunGard serves approximately 25,000 customers in more than 70 countries and has approximately 17,000 employees. SunGard provides software and processing solutions for financial services, education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue of over $4.0 billion, SunGard is one of the largest privately held IT software and services companies. For more information, please visit sungard.com