The number of transactions that require reconciliation on a daily basis is exceeding the capabilities of financial institutions as they struggle to comply with new regulations.

In an arena where alacrity is key, a step-change in reconciliation software is the only way forward, according to Bill Blythe, global business development director at Gresham Computing, a provider of reconciliation software.

“When you are a large corporate or large financial institution, you have thousands of bank accounts and millions of transactions going in and out every day, and you need computers to be able to reconcile and validate what you think happened with what happened with your counterparties in the rest of the world,” said Blythe. “The software that we build is specifically designed to automate, to control, to provide security and access around those types of messages.”

Reconciliation exists in every single area of a bank. “Whether it’s in the front office, middle office, back office, everybody knows what reconciliation is,” Blythe said.

Because reconciliations are a key facet to identifying risk, it’s imperative that every transaction is reconciled in real-time and that discrepancies are reported immediately.

“Lowering risks, whether they are market risk, credit risk, operational risk, are about insuring that checks and balances are in place, that your money is where it should be, that you paid people on the right time,” said Blythe. “That’s one key business driver of reconciliation.”

The second is the growing need to prove integrity. “Whether it’s the SEC or the FCA, you can get locked up in prison if you don’t get this stuff right, so it’s about ensuring that you have true completeness across your organization, that you have robust controls, that you have accountability across the organization so that you don’t just have these point-to-point silos anymore,” Blythe said. “Dodd-Frank, which requires any financial institution to report holistically from a group perspective, means that you need these controls and these integrity points across the entire lifecycle of the trade.”

The biggest driver by far is regulation. “The regulatory landscape is ever changing, and there are more and more demands on institutions to be able to report timely, costly, accurately, and you need to do that in real time, and that’s why you need real-time financial certainty across your organization,” Blythe said.

Gresham Computing’s core competency is financial reconciliation. “It’s about bringing complicated data sets into the system quickly,” said Blythe. “To do that in the legacy technology, it takes weeks and months. What we’re offering is a smart, innovative way to bring on data or reconcile and match within hours.”

“We’re bringing something very new and innovative to a very stale market,” Blythe added. “The vendor community is building reconciliation solutions for probably close to 20 years, but the world is a very different place now and to maximize efficiency you need to make better use of technology.”