Reconciliation Solution: Case Study

Editor

Kenneth Ochieng

How a Bank Successfully Automated its Reconciliation Process

NLS Tech Solutions‘ main competencies include an in-depth understanding of reconciliation procedures in banks and financial institutions. Read on to find out what a bank did to improve its reconciliation process, reducing costs and increasing customer satisfaction in the long run.

Background of the Reconciliation Challenge

We’ve had the privilege of working with a diverse group of exceptional financial institutions, ranging from small banks with a small number of reconciliation teams focused on a particularly difficult reconciliation to medium- and large-sized players with hundreds of users engaged in a centralized reconciliation function throughout the Reconciliation Lifecycle.

Over the years, this experience has taught us that every new technology deployment is a chance to rise to the occasion and thoroughly comprehend each client’s demands and the complex business logic that controls their workflow—and to learn from it.

For our client, reconciliation at that time entailed manually comparing transactions from their core banking system with those from their various subsidiaries.

The process was long and tedious, and often resulted in errors.

The Bank’s Real Reconciliation Challenges

To improve the reconciliation process, our client (a bank in Kenya) considered making changes to its procedures. The reasons for this included the following:

1. Slow Data Entry Process: The manual process used by the bank was time-consuming and labor-intensive. Thus, the bank was manually checking the transactions from the accounting system with those from the bank statements. The employees would have to enter the banking system, download the month’s statement, and open it. In order to create reports for the same time period, the employees also needed to log in to the accounting system and compare the data.
2. Human Error

   The client’s reconciliation team was individually overseeing the whole bank reconciliation procedure. This procedure was rife with errors due to the laborious process of confirming payments, comparing credit and debit receipts, etc. Since the business has several bank accounts and certain payments were made in foreign currencies, the situation became extremely difficult. The absence of reference numbers and inconsistent payee name spelling presented even more difficulty.

3. Inaccuracies and efficiencies in the reconciliation process.

4. Desire to keep up with the latest technology trends in banking and finance.

5. Costly manual process.

6. Compliance standards.

   Given all that has been said above, it is not surprising that occasionally even well-known organizations slip up, leading to scandals or even financial crises. Then, in an effort to tighten controls that might already be in place, regulators retaliate (some might say overreact) by establishing regulations that apply to the whole sector. Therefore, it should come as no surprise that institutions in this business are frequently caught off guard by the constantly changing legislation that regulates it. Detailed process assessments and improvement aspirations are frequently sparked by new rules, but by the time a new process is really in place, a new regulatory obstacle is already at the door. Numerous institutions are unable to keep up and never experience the calm that comes with being completely and constantly compliant.

What Happened Next? NLS Automated the Bank’s Reconciliation

NLS worked with the client to streamline its financial transactions by automating the entire reconciliation process. We implemented our solution to automate the process, making it more efficient.

This new system allowed the bank to reconcile its accounts in a matter of minutes instead of hours or days. Thus, the solution streamlined the entire process, reducing the amount of time needed to complete it.

The Results were Impressive

The bank was able to:

• Reduce the time spent on reconciliation.
• Improve its customer service by providing accurate data in a timely manner.
• Reduce the rate of human error.
• Reduce manual effort.
• Enhance Standardization.
• High-Quality Improvement
• Eliminate repetitive administration

It’s clear that the bank in this case study ultimately improved its reconciliation process by implementing our solution.

By making these changes, the bank was able to improve their overall efficiency and accuracy, which led to better financial health for the company.

NLS can Automate Any Reconciliation task, including:

• Real-time matching and automation.
• Integration with existing infrastructure.
• Reports based on the reconciliation status for audit purposes.
• Provision of manual reconciliation for unmatched items.
• Review and reversal of matched transactions should incorrect
  references be made.
• Allow reconciliations to be created for multiple banks,
  companies and environments.
• Multi-currency, multi-site solution deployable on multiple
  environments.
• Direct uploading of files not available to users in csv format
• Built in email function to facilitate communication and
  notification
• Configurable access rights to enhance security.

Where to use Automated Reconciliation?

Clearing, Cards, Digital Channels, Finance, and Payments Departments, etc.

Our client is a universal bank that was formed via the merger of two leaders in the area’s banking sector.

Industry

Banking

Business Type

Real market leader in Corporate Banking, Asset Finance, and Digital Banking in East Africa.

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