released today by
technology and operations solutions company for the global financial
services industry, finds that industry-leading financial firms are
outsourcing reconciliation functions (both technology and operations
labor) to create standardized risk management processes, increase
their ability to enter new markets and comply with more complex
regulations, while significantly reducing costs and risks.
In light of ongoing regulatory pressures, financial services firms are
recognizing the value of developing an enterprise reconciliation
outsourcing strategy to increase transparency of business activity.
Basel III in particular, exemplifies a model for a new era in global
risk management standards, calling for more stringent reform measures
on capital, collateral and liquidity requirements. According to the
report, one way firms are handling these stresses is by creating
standardized, real-time reconciliation processes to ensure their books
and records are fully balanced.
"Centralized reconciliation outsourcing represents a paradigm shift
for the industry," said
Chief Operating Officer, Business Process Outsourcing, Broadridge.
"Historically, financial firms spend 30-40% of back office costs
gathering and preparing information as part of disconnected
reconciliation processes. Firms partnering with an industry
reconciliation leader, providing both BPO and technology, can leverage
global centers of excellence to create standardized risk management
As noted in the study, many top firms have already heightened their
reconciliation focus, and over the next 18 months the adoption of
outsourced reconciliation services is expected to rise by 350%. Four
key factors are driving the need for change and causing financial
firms to rethink their current reconciliation processes:
— Increased and more complex regulations such as Basel III and
— Pressures on optimizing firm capital
— Cost of multiple IT applications and inconsistent business
— Challenges of managing global and product expansion in a real-time
As challenges persist, financial firms on both the buy-side and the
sell-side should assess their current reconciliation capabilities
across the core areas of Technology & Operations, Expertise, Risk, and
Cost. Broadridge offers a structured approach to help these firms
achieve best in class reconciliations using Broadridge's technology
and outsourcing expertise in four steps:
— Develop a Strategic Roadmap for Centralizing Reconciliations.
Technology and operations provide the critical foundation for
supporting enterprise-wide reconciliation transparency. Firms should
assess current or planned capabilities to identify processing gaps
that increase risks.
— Evaluate Firm's Expertise. Reconciliation and exception
management require a seasoned staff with strong domain knowledge,
including the ability to evaluate and adopt the industry's "best
practices" across business units.
— Evaluate Operational Risk Management. A centralized
reconciliation function can enhance risk management by: 1) Identifying
potential exposures before they occur; and 2) Providing the expertise
to appropriately respond to exceptions and issues, before they
escalate costs and risks.
— Assess Operating Costs. As budget pressures continue to mount,
financial firms must continue enhancing reconciliation while achieving
cost savings and conserving capital.
For additional details or to download Broadridge's full whitepaper –
"Rethinking Reconciliation: How a global center of excellence can
enhance risk management and reduce costs" – click here.
Broadridge is a technology services company focused on global capital
markets. Broadridge is themarket leader enabling secure and accurate
processing of information for communications andsecurities
transactions among issuers, investors and financial intermediaries.
Broadridge builds theinfrastructure that underpins proxy services for
over 90% of public companies and mutual funds inNorth America;
processes more than
per day; and savescompanies billions annually through its technology
For more information about Broadridge, please visit
Kelly M. Howard
PRN Photo Desk, email@example.com
/Web Site: http://www.broadridge.com
Broadridge Financial Solutions
IN: OUT FIN ITE
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