Comprehensive Reconciliation Framework to Manage Operational and Counterparty Risk

Reconciliation Support

Financial institutions need to actively manage operational and counterparty risk arising due to poor data flows between internal and external systems. Using a suite of internally developed reconciliation tools, eClerx supports reconciliations of over 200,000 trades on a daily basis for 8 large investment banks. This includes front to back, document to system, broker reconciliation, industry utility, settlement reconciliations and portfolio reconciliations.

Challenges

  • ​Risk arising out of incomplete or incorrect data flows between internal and external systems
  • Cost of resourcing and issue remediation due to variable volumes and complexity
  • Absence of workflow tools or automation

Solutions

  • Front to Back Reconciliation: Transform data from various sources into standardized formats, using eClerx developed reconciliation engines to match records in client systems. Push MI using interactive dashboards and perform root cause analysis to solve recurrent issues
  • Document to System Reconciliation: Create electronic record of documents using dual keystroke approach, reconcile against client systems
  • Broker Reconciliation: Perform two/three way reconciliation across blotter, broker confirms and recaps, and client systems for booking errors 
  • Industry Utility Reconciliation: Reconcile records modified in client system or industry utility (DTCC®, MarkitWire®, LCH®, etc.); reduce rejections by ensuring compliance with data formats used by different utilities
  • Settlement Reconciliation: Check client settlement positions with market data, reconcile, and confirm trade status prior to value date between counterparty and PB or Custodian 
  • Portfolio Reconciliation: Reconciliation of client and counterparty portfolios via triResolve©, conduct secondary reconciliation using internally developed reconciliation engine

Benefits

  • Correctly uploaded/booked trades have significant positive impact downstream (Confirmations, Settlements)
  • Pro-active approach to reconciling entire portfolios even  if they are not driving a dispute
  • Significantly reduced P&L and collateral risk due to structured approach to reconciliation including dual keystroke data transcription
  • Reduced aging of breaks through T0 reconciliations and continuous follow -ups with brokers and client Middle Offices
  • Enhanced senior management reporting through regular metrics around trade breaks, root cause analysis, etc.
  •  Integration of reports with industry and client systems for faster resolution of breaks