Trade reconciliations: Common challenges and the role of automation

What is a trade reconciliation? 

Firms across the investment management industry perform trade reconciliations to verify daily trades against trade tickets, internal systems and external systems. Effectively reconciling these data points ensures every trade is accurately validated and reflected in profit/loss statements and balance sheets.  

Why are trade reconciliations important?  

Sound trading activity is the lifeblood of investment businesses. Instructing accurate trades to counterparties is critical for managing a client’s investment portfolio and mitigating overall business risk.  

Errors in trade reconciliations result in material cost, both financially and reputationally. Adopting robust systems and controls is therefore critical to the success of firms across the investment management industry.   

Typical challenges with trade reconciliations 

Trade reconciliations present many challenges to organisations. Typically, these processes are manual, require data from multiple sources and formats, and lack sufficient control. As a result, firms often have efficiency gaps that could be rectified by higher levels of automation.  

Automated trade reconciliation software 

Our automated trade reconciliation solution has been specifically designed to help firms across the investment management industry to: 

  • Reduce operating costs for trade reconciliations 
  • Reduce the manual work required to complete trade reconciliations 
  • Provide more control over financial data 
  • Standardise data from multiple external sources for easy comparison 
  • Elevate automated match rates for trading activity 

In this paper, we offer a deep dive into the factors that underpin effective trade reconciliations and the typical challenges involved. The second section provides an overview of AutoRek’s automated trade reconciliation solution.   

In the full paper, you will learn:  

  • The systems and controls necessary for a robust trade reconciliation process  
  • How reconciliations help to mitigate risk and cut operating costs 
  • How to overcome challenges around manual limitations 
  • Typical challenges firms face with data management in trade reconciliations  
  • How a solution like AutoRek provides more control over financial data  
  • Different use cases for AutoRek in the trade reconciliation process 

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