SmartStream: Conquering The Close: Automated Reconciliation

SmartStream: Conquering The Close: Automated Reconciliation

CIO VendorHaytham Kaddoura, CEO Same-day financial close is no longer limited to a few leading banking institutions. It has become a pressing goal for CFOs across large and medium-sized organizations alike in the financial services arena. More than just efficient bookkeeping, daily financial close can optimize crucial business processes and effectively integrate key financial and operational systems. Most importantly, it can place financial institutions with a distinct advantage of being able to quickly sense and respond to critical business needs and developments. While the companies are already aware of the benefits associated with this approach, Haytham Kaddoura, a veteran in the financial services industry and the CEO of SmartStream, notes that most of those companies striving to fulfill the vision of daily financial close are far from ready.

Years of neglect—stemming from utilizing legacy, disjointed processes and systems that require extensive manual intervention—are the primary setbacks toward a financial firm’s path to glory. To top that off, increasing government scrutiny and the evolving accounting regulatory landscape, coupled with the relentless focus on cost and efficiency, are also thwarting businesses from modernizing their reconciliation processes. “We believe that the principal reason for sub-optimal reconciliation outcomes for most financial institutions is the lack of a comprehensive, structured, and tailored strategy that starts with a focused assessment of key issues and gaps,” says Kaddoura. This is where SmartStream emerges as the “silver lining” for financial institutions. As a market-leading reconciliation software solution provider, SmartStream understands the needs of every institution, regardless of size, processes, or lines of business. Whether firms are looking to replace inflexible legacy systems, build an internal processing utility, utilize SaaS, or outsource the entire transaction processing operation, SmartStream offers a wide range of automated financial reconciliation solutions based on their innovative and award-winning Transaction Lifecycle Management (TLM) methodology.

"TLM SmartRecs OnDemand is increasingly gaining more popularity in both regulated and non-regulated reconciliations"

A Second-to-None TLM System

SmartStream’s pioneering vision and technical innovation are at the core of banking, treasury, and securities operations throughout all financial markets. TLM is SmartStream’s trademarked approach to solving operational processing challenges by understanding the end-to-end transaction flow—from trade inception to settlement.

Today, SmartStream has carved a niche in the financial markets with its original, innovative reconciliation solution

SmartStream’s TLM platform facilitates improved automation and visibility, and bears the hallmark of scalability and flexibility, offering an unmatched standard of operational control and risk management.

SmartStream’s TLM Cash and Liquidity management solution is an example of the firm’s prowess in solving operational processing challenges while understanding the end-to-end transactions flow. That said, the solution offers a real-time view of liquidity and transparency using advanced payment flow controls, resulting in a greater ability to curb risk while reducing overall fees. Additionally, the company’s TLM Cash and Liquidity management solution takes real-time payments and enables their customers to create an instantaneous cash ladder to manage the balance. This real-time approach helps banks break down organizational silos, with a single enterprise-wide platform for cash management, treasury management, exceptions, and reconciliations management. “A same-day financial close is no longer a far-fetched dream for banks,” comments Kaddoura.

Market-Leading Reconciliation Solution

Today, SmartStream has carved a niche in the financial markets with its original, innovative reconciliation solution. Deployed by thousands of financial institutions worldwide, SmartStream’s powerful and highly scalable software can process exceptions, identify broken trade and payments, and repair them on the go. SmartStream’s reconciliation software also supports firms looking to combine cash and securities into a single reconciliation process. Moreover, SmartStream enables a ‘multi-way reconciliation’ process; where the data is loaded only once, and matched multiple times. And should an exception occur, it is raised as a single exception, rather than two that would be traditionally investigated by both the cash and securities teams. Exception processing and automated follow-ups eliminate unnecessary manual effort to further reduce errors, risk, and exposure. This approach helps companies save an ample amount of time and money. Highlighting the usefulness of SmartStream’s reconciliation solution, Kaddoura says, “One of our clients, a multi-national bank, was able to reduce its trade flow processing costs by 95 percent using our offerings. This speaks volumes about the value we add to our clients’ operational workflow.”

SmartStream also recognizes that there are a growing number of organizations that wish to leverage the platform’s capabilities but without the need to invest in on-site technology. To this end, SmartStream has created TLM SmartRecs OnDemand solution, which makes SmartStream’s industry-leading, automated reconciliations processing technology available as a flexible and cost-effective managed service. Smaller firms that once would have found the cost of improving back-office operations prohibitive can now benefit from more efficient post-trade operations as well as lowered overheads.

TLM SmartRecs OnDemand features a simple, intuitive, wizard-based user interface as well as drag and drop capabilities. Its simplicity and ease-of-use make it an ideal solution for business users, enabling them to manage all aspects of reconciliations processing without the need to rely on over-stretched IT departments. Further, TLM SmartRecs OnDemand significantly widens the number of business users able to configure reconciliations. This enables financial institutions to reduce on-boarding times, thereby achieving greater operational efficiency and cost-effectiveness. New reconciliations can be quickly constructed and, importantly, the solution allows complete reuse of all existing configuration components. Thus, organizations can achieve even more rapid on-boarding times as they are not obliged to build each configuration from scratch. Most importantly, this solution enables fully-auditable reporting to be carried out. Driven by these feature sets, “TLM SmartRecs OnDemand is increasingly gaining more popularity in both regulated and non-regulated reconciliations,” mentions Kaddoura.

SmartStream’s Center of Excellence

Kaddoura notes that the recent years have seen significant growth in the volume of reconciliations that financial institutions perform. Regulatory initiatives, in particular, are driving firms to carry to out ever greater numbers of reconciliations, while authorities are also putting pressure on financial institutions to speed up the on-boarding of new reconciliations and prevent the occurrence of backlogs. In answer to these industry challenges, SmartStream has set up a Centre of Excellence for reconciliations processing. Staffed by skilled personnel, the center provides rapid, cost-effective, and highly efficient reconciliations processing. The Center of Excellence provides two services, a central on-boarding utility—developed to allow faster reconciliations on-boarding—and a managed service utility, which combines access to SmartStream’s reconciliations processing technology, on a utility basis, with a fully outsourced reconciliations handling service.

A Partner of Choice

SmartStream has evolved as a ‘partner of choice’ for most of the major banks and financial institutions across the globe. SmartStream has traversed a journey of rapid organic growth and made a number of strategic acquisitions to remain at the forefront of financial technology. Last year, in collaboration with Goldman Sachs, JP Morgan Chase, and Morgan Stanley, SmartStream created a Reference Data Utility (RDU) as a shared service model. This database provides capabilities to mutualize operations and technology costs, and ensures that firms utilizing this reference database get a complete, accurate, and timely supply of information to support their business decision making, and facilitate better regulatory compliance. “Our RDU is truly positioned as the frontrunner in the industry,” mentions Kaddoura. That said, SmartStream is constantly looking to make investments in technology and improve its offerings for the financial market. Peeking into the future, Kaddoura believes that analytics and robotics will play a compelling role in the finance industry. “Striding ahead, we intend to employ such technologies and further empower our clients to improve their reconciliation process,” he concludes.

- Pooja Ray
    November 14, 2018