Role of Real-Time Automated Reconciliation in Real-Time 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 is not going to change anytime soon. The immediacy of transactions needs a real-time reconciliation solution. Financial institutions are now getting into tough competition. Considering all these factors, professionals recommend an automated reconciliation system to banks for improving accuracy & the speed to manage financial activities.  

Let’s check below to know more about real-time transactions & the role of an automated reconciliation system.   

Why Choose Real-time Reconciliation 

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

Role of Real-time Reconciliation in Real-time Transactions  

The role of real-time reconciliation in real-time transaction handling is explained here. Also, how banks are using automated reconciliation system for keeping themselves ahead of their competitors.   

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 immediately. The real-time information reduces the timeframe of the reconciling process effectively.    

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 customers. Automated reconciliation works non-stop for 24X7 to increase the bank’s operations efficiency.     

Minimize Customer Transaction Disputes 

The real-time reconciliation enables Banks or financial institutions to deal with real-time transaction data. The reconciling process assists them in taking real-time or quick decisions to manage data exceptions. It minimizes customer transaction disputes before they arise and increases the customer relationship or engagement with the financial institution.   

Managing Exceptions  

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

Liquidity Management  

One of the biggest advantages 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 helps banks free 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 emphasizes reducing the regulatory capital requirements decided by financial institutions. The risk & treasury team monitor intraday and end-of-the-day overdraft positions thoroughly before taking actions to minimize them. This activity enables businesses to improve their profit margins.       

 If you are interested to know more about how the automated reconciliation system will help your business grow, please Contact Us. We also offer consultation or schedule a  Demo to know about our solution.