FIS Blog

All Together Now for Harmonized ATM and Card Reconciliations

Richard Chapman | Tuesday, February 9, 2016

Automation is an important step on the road to an efficient reconciliation environment for ATMs and cards. But forward-thinking banks are now going further in their quest for true optimization, and looking to harmonize, as well as centralize, their processes.

Not so long ago, it wasn’t unusual to manage different ATM and card reconciliation processes through a variety of Excel spreadsheets and homegrown tools. From on-us and off-us ATM withdrawals, and credit card transactions, to cash replenishments and third-party settlements, each transaction type would traditionally have been reconciled within its own spreadsheet or custom-built application.

Then, more recently, banks began automating these individual processes, typically using a vendor-supplied tool. As discussed in a previous blog, this move towards a single, centralized solution for all reconciliations has been a good one. It eliminates much of the pain, risk and cost of manual processes and introduces new levels of transparency to the reconciliation environment, benefiting both lines of business and risk management.

However, in many cases, the progression from the spreadsheet to automation has been made without properly analyzing the business processes involved. As a result, processes that share, say, common data sources and reporting rules can be replicated many times rather than rationalized and consolidated. This in turn can stop banks from capitalizing on opportunities to introduce best practices, harmonized standards and economies of scale – and lead to unnecessary costs, administrative complexity and reduced capacity to provide transparency and management information.

The answer for a growing number of banks is to not only centralize their reconciliations on the same tool, but also harmonize them. Through process and solution harmonization, they can address a defining challenge for ATM and card reconciliations: the fact that multiple stakeholders are processing the same data for different reasons, but without a shared view of their activity.

By way of explanation, let me draw a domestic analogy. Like many couples, my wife and I have a joint bank account with a debit card for each of us. And every month we reconcile what we’ve spent on our cards against our online statement. I print off the statement, dig out my receipts and tick off the relevant transactions. My wife does the same, independently printing a copy of the statement and reconciling her own receipts against it. At around the same time, in an office across town, our tax accountant also examines the statement. But he’s less interested in balancing the books than looking for tax-deductible expenses. And it just so happens that there’s a large hotel bill that I need to claim back from my employer.

I, of course, have already marked this up as an expense on my own print-out. But the accountant isn’t sure and has to call me, which gets me hunting through my receipts again. My wife, meanwhile, nearly fell off her chair when she saw the hotel bill, so we waste more time discussing why I didn’t use my credit card to pay for a business expense. The moral of this story is: You don’t need to reconcile the same information three times, even if it is for three different purposes. And if the outcome of a reconciliation is pertinent to others, then find an easy way to share it.

The same goes for ATM and card transactions. Say that, in a bank, I am responsible for reconciling all the withdrawals from an ATM, while two colleagues separately handle on-us and off-us reconciliations. All of the transactions I match will be gone through again in either the off-us or on-us reconciliation processes – and also by the person in charge of replenishment reconciliations. The latter doesn’t care who took the money out of the terminal – but is, again, still repeating the same steps with the same data to get the right information. One transaction, in other words, could appear in at least four reconciliations – and more.

Interconnected as these reconciliations clearly are, wouldn’t it be better if there was one harmonious underlying technical process for all of your ATM data? Linking together your reconciliations in this way, a single function could deliver the perspective that each stakeholder needs to do their job, but without unnecessary repetition and overlaps. It would also promote fluid communication between the stakeholders, allowing them to publish the results and findings of any exception resolution processes. By sharing insights that may be relevant to others, it’s easier to prevent duplicated effort and unnecessary manual activity.

In short, after automation must come harmonization – a mantra that’s now striking a chord with more sophisticated banks. Centralizing reconciliations is no longer enough. After migrating all your ATM and card reconciliations to one platform, it pays to look for the commonalities that exist between them and create a smooth chain of processes to meet multiple stakeholder requirements. So here’s to harmonizing where you can, for an optimally orchestrated reconciliation environment – and resounding benefits for both visibility and efficiency.


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