New Aite Group research found that over half of respondent firms (53%) are working with technology that is five years old or older.
In the supposed era of digital transformation, when firms’ C-suites across the financial services realm are fixated on improving process efficiencies and reducing costs, the existence of manual workarounds and spreadsheet-based reconciliations is jarring. Artificial intelligence and machine learning-based technologies are here to save the day—or so the hype goes. But firms need to think long and hard about the next stage of labor arbitrage before they automate broken processes. Aite Group’s latest report, Trends in Reconciliation Technology: AI-Trained Recs or Train Wrecks?, explores global capital markets firms’ views on reconciliation technology strategies and challenges inherent to supporting the function across the enterprise.
“Firms are less concerned about additional bells and whistles and are more concerned about vendors improving core functionality,” states Virginie O’Shea, research director at Aite Group. “Common feedback from vendor clients is that vendors are spending a lot of time and money on ‘nice-to-haves’ rather than improving core capabilities (such as data loading support, reconciliation onboarding functionality, and workflow support) and investing in upgrading the processing engine, and while next-generation technology will likely be useful in the future, there are a host of other areas that vendors need to tackle first,” she explains.
The report examines the pressures, challenges, and plans of teams tasked with conducting reconciliation at the enterprise level within their organizations. Highlighting these teams’ expectations regarding technology and their firms’ current level of automation in areas such as reconciliation onboarding, the report is based on Aite Group interviews with participants representing 34 global capital markets firms conducted during Q2 and Q3 2019.