Maturity model provides a framework for financial firms to benchmark their reconciliation function and actionable steps to improve efficiency and agility while cutting cost.
LONDON–(BUSINESS WIRE)–Duco, the leading platform for enterprise data automation, has today launched its updated Reconciliation Maturity Model: the best practice guide to enable financial firms to benchmark their reconciliation function. Following the maturity model, an institution with 1000 controls can hope to save up to $37.9m annually by moving from purely manual processes to a continuously improving model powered by AI.
The Reconciliation Maturity Model details five stages of maturity: manual chaos, hybrid capabilities, centralised excellence, fully federated, and continuous improvement. Firms can see the total cost of ownership of reconciliation processes at each stage and measure themselves against key performance indicators for factors such as time-to-change and cost-per-control. Once they have identified where they currently sit on the maturity model, they can use the guide to identify their next steps to becoming more agile, streamlined and efficient.
The model also shows the impact upon audit costs and risk events as firms advance their reconciliation maturity. A firm at the final stage (continuous improvement) can expect to save $6,000 in audit costs per control and remediate risk events 9 days quicker than a firm at the start of its reconciliation journey.
James Maxfield, Chief Product Officer at Duco, commented: “As a former Operations leader, I know how difficult it can be for firms to get a clear view of reconciliation, given the many moving parts, siloed processes and opaque technology that’s often involved. Our Reconciliation Maturity Model is an invaluable guide to harnessing the best technology available today to improve automation, streamline operations and cut costs and risk. It not only shows firms how to leverage the current innovation in artificial intelligence, no-code and cloud computing, but how to prepare themselves to take first-mover advantage of advances in the future.”
The first Reconciliation Maturity Model was released in mid-2020. Since then, financial markets have become more complex, volumes have continued to rise and regulatory scrutiny on data quality and controls has tightened. Many firms are still attempting to deal with the scale, variety and complexity of financial data through a combination of multiple point solutions and hundreds – or thousands – of team members performing manual processes.
Technology has greatly moved on in the last five years, most noticeably with the proliferation of generative artificial intelligence. AI plays a key role in reconciliation automation, as it is the only technology that can adapt to and overcome the multitude of challenges around financial data.
The updated Reconciliation Maturity Model includes the lessons learned from five additional years of working with some of the world’s largest financial institutions. Duco’s client base has grown to over 230 firms and the company processes over a billion lines of data on its platform every two days. The firm won Best Reconciliation Management Provider and Best Buy-Side Reconciliation Platform/Service in the Waters Technology awards for the second consecutive year in 2024.
“We’ve partnered with a lot of leading banks, asset managers, brokers and custodians over the past few years to help them transform their operating models,” Maxfield commented. “Accurate data is at the heart of operational agility: it informs P&L, trade settlement, custody, risk management, client and regulatory reporting, and much more. It’s only by getting the data right that Operations can respond fast to the needs of the business. That means having a reconciliation function that is flexible and proactive, tackling bad data at source rather than cleaning up the mess caused by thousands of systemic exceptions.”
Firms looking to assess their reconciliation function and take steps to improving their data management can download the Reconciliation Maturity Model here.
About Duco
Duco, a leading data automation company, is helping businesses to unleash their potential by removing the friction around data. Duco’s cloud-based, no-code platform brings the processing of mission-critical data to business users with governance and control, giving firms the tools they need to increase business agility, reduce risk, stay compliant with regulation and dramatically improve efficiency. Over 10,000 users across 30+ countries process billions of data records every week using the platform. Duco is headquartered in London, with offices in New York, Boston, Wroclaw and Singapore. Customers include global banks, investment managers, insurance firms and challenger Fintech companies, such as Societe Generale, ING, Man Group and Currencycloud. For more information go to www.du.co
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