For those in present, it is almost a given that what works for companies in the past. The times have been changing and the processes and strategies employed by companies are no exception. The companies need to be innovative in terms of their p0rocesses especially that the market growth and development is moving at a fast pace. The new technologies and strategies must be used to keep up with the demand. The financial service sector, some asset managers have already turned to outsourcing companies and new technologies in order to maximize the resources they have and for them to focus on their core business. In the financial services sector, trading is a key element that having lots of reconciliation and settlement procedure for transactions and accounts. Under the sector, this is only one of the categories which needs immediate attention as the window for such processes are reduced to less than a day’s time and that the volume is continuously soaring.
The old fashioned vs Modern, in the past asset and fund managers have heavily relied on manual reconciliation which involves paper work in conducting their brokerage reconciliation processes. In employing an old-fashioned reconciliation process has posed great opportunity costs and challenges to both asset managers and brokerage firms since such paper works expose the managers to both asset managers and brokerage firms since it consists of coordinating with custodian banks and prime brokers and to higher risks of errors. The discrepancies in confirmation are most likely to happen in the old fashioned process as these professionals input the data manually.
The workflow can change together with having lesser risks and the elimination of those pain points that were raised. Employing the modern way in conducting reconciliation and file matching indeed offers a better, streamlined workflow for all parties involved. The trade execution data is required to be processed within 24 hours and it processed at a specific time. There is a risk for the firm to lose its license, the time is an important issue for such kind of service. The modern process which uses technologies and automation reduces the time constraint that enveloped the procedures done by financial analysts.
In the technology, bringing into the company a higher level of efficiency, an automated reconciliation process, which proves to be a more secure process. This leads to a greater value of efficiency especially on the part of the capital management companies. There is still remains a third party who will as an arbitrator in case there are any disputes that needs to be settled.
REFERENCE:
http://www.blog.infinit-o.com/automated-methods-brokerage-reconciliation/
