With the increasing adoption of instant payments, mobile banking and digital wallets, a major volume of retail transactions is shifting from batch mode to real-time data reconciliation. Financial institutions must be able to track the money in real-time as it traverses across their customer’s accounts, their internal and external settlement accounts.

Role of Real Time data reconciliation Automates Transactions

The financial market is on the verge of ever-expanding growth. Financial institutes in the capital market are managing payments at an increasing pace. This trend will not change anytime soon. The proximity of transactions needs a real-time reconciliation solution. Financial institutions are now getting into tough competition. Considering all these influences, professionals recommend an automated reconciliation system to banks for improving accuracy & the speed to manage financial activities. 

Why Choose Real Time Data Reconciliation? 

Beforehand banks reconciled their data traditionally using the end-of-the-day process. It takes at least one day to settle the issues of accounts. The delay in resolving problems with the end-of-the-day process brings forth the necessity of a real time data reconciliation system. The automated reconciliation system advances the reconciling efficiency of banks, depending on their real-time data management.              

Reduced Reconciliation Time

Banks that use the end-of-the-day process to reconcile data takes a whole day for settlements. With real-time automated reconciliation, matching operations run instantly. The real-time information decreases the timeframe of the reconciling process successfully.   

Enhanced Operational Efficiency 

Real-time information of when trades are settled helps operations teams to automate their delivery versus payment processes. It increases their control over this activity for covering a higher number of clients.

Minimise Customer Transaction Disputes

The real-time reconciliation allows Banks or financial organisations to deal with real-time transaction data. The reconciling process helps them in taking real-time or rapid decisions to manage data exceptions. It reduces customer transaction disputes before they arise and upsurges the customer relationship or engagement with the financial institution.  

Managing Exceptions with Real Time Data Reconciliation 

Using automated reconciliation enables Financial Institutions to improve exception management effectiveness. Errors in the real-time transaction could be marked and resolved with promptness. It ensures that the fraudulent transactions won’t go disregarded and given utmost priority while dealing. Automated reconciliation makes settlement without taking a whole day by checking the payments in real-time. It decreases the efforts and lowers the costs as well.


Liquidity Management 

One of the main benefits of opting for automated reconciliation is to increase efficiency in liquidity management. Tracking intra-day cash movements increases cash position forecast accuracy. Intra-day mitigates the risk of uncompleted transactions and overdrafts. Balanced visibility, accurate forecast ability, and efficaciousness in liquidity management make automated real-time reconciliation need of the hour. It assists banks by freeing up their significant funds for investment and make smart decisions based on real data rather than estimations.    

Working Capital

Capital holds significance in financial institutions. Automated reconciliation highlights reducing the regulatory capital requirements decided by financial institutions. The risk & treasury team monitor intraday and end-of-the-day overdraft positions carefully before taking actions to minimise them. This activity allows businesses to advance their profit margins.      

Due to the vast amount of both digital and cash payments banks must adopt a real-time reconciliation approach for smooth operational running of the business.  

One thought on “Why core banking systems must support real-time reconciliations.”
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