The Ledger

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The Ledger

Posted by Wan Ting Lee

Core data challenges holding banks back

The pandemic highlighted the importance of trusted, real-time data for fast decision making. The fact that most organizations – especially in the banking sector – do not have access to this has been highlighted in the renewed urgency with which finance teams are pursuing finance automation and modernization projects. A recent Accenture survey found that CFOs are channeling on average, 33% of their department budgets toward building real-time operations and processes. (source) 

Since banks tend to be behind other industries when it comes to implementing back-office technology upgrades, today's banking CFOs and their teams face a lack of detailed, real-time data and still utilize highly manual reconciliation processes. Thousands of manual entries are posted at month and quarter end just to get the numbers right. 

Core data issues are causing the following issues for CFOs, Controllers, and the rest of the finance department.  

Core data issues

Challenges around intercompany and branch balance reconciliation 

For the accounts department, a significant challenge lies in matching off for consolidated accounts, which they often cannot do because they have insufficient detail at their fingertips. To be able to view consolidated data at a granular level such as transaction type (derivatives, money market, etc.), counterparty details, transactional currency, would save them time and effort. 

Cannot support requests for detailed analytics 

In most banks, core banking systems send aggregated balance data to the GL (General Ledger). This means finance teams do not have the detailed data needed to support management information requests. Though the CFO wants, and is expected to, serve as a strategic business partner to the business, the accessible data is not detailed enough to support leadership demands for reporting that supports forecasting and decision-making. If more balance details were available, the finance team could provide analytics that would allow business heads to review profit before tax by business, including the cost associated with revenue. Configurable and flexible code and extended balance attributes can allow for expansion of attributes that can reconcile Management Information reporting to Legal Entity balance.  

Inability to accommodate new products 

Some core banking systems are not suitable for new products and default to producing entries and netted journals (e.g., derivatives balance), at a summarized level that lack the details needed for finance, risk, and treasury teamsEven banks that have updated and modernized legacy core banking systems may find that the solutions are not built to hold all the beneficial details. 

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How to enable a centralized, real-time data environment. 

Few things are more frustrating for finance teams than having information housed in multiple, disparate databases and spreadsheets and not immediately at hand. A setup like this results in low-value, often manual processes and creates a huge drag on the department’s agility.  

For banks, spending endless hours of trying to pull together data from various siloed sources, then more time on reconciling and matching the numbers, means they have little time to review and implement the technology that would save them all of that time and manual effort.  

The Aptitude Accounting Hub (AAH) is a finance management solution for organizations looking to modernize and simplify their finance department through centralized and fully automated finance, accounting, and reporting. AAH supports smart compliance, finance control, business agility, operational efficiency, and strategic foresight. It creates a single, trusted version of finance data that can be used to improve analytics and forecasting. AAH is available in multiple deployment models including SaaS, private cloud or on-premise. 

For more information, please have a look at the following assets: 

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