How Transaction Matching Software Can Empower Your Financial Institution & Improve Operational Efficiency

Do your banking officers or insurance agents still manually compare spreadsheets to make sense of data? Do you still have manual journal entries as part of your workflow? It’s not uncommon to see accountants, credit and insurance agents being buried behind piles of printed paperwork or Excel spreadsheets, sifting through mountains of data to seek information, identify errors or reconciling items.  

The biggest challenge of transaction matching, therefore, is the amount of time and human effort that goes into processing it – specifically when balance ledger accounts are made up of millions of rows and columns that must be reconciled against other data sources to be relevant and substantial. 

Time and effort, however, are only part of the problem – there are actual risks associated with the manual process putting your organization’s reputation on the line. 

Impact of Manual Effort on Accuracy

Reconciling transactional data is a tedious, onerous task, one that does not ensure accuracy and precision. A skipped record, a spelling error, a duplicated number, an incorrect figure are instances with major impact. 

Bank records, invoices, credit cards, bank sheets, customer information are confidential data that do not have room for errors. The challenge is further exacerbated when your staff has to deal with ERP data or data from multiple silos. Assumptions, deliberate or indeliberate overlooking of facts, negligence are expected when dealing with this much pressure and overload of work. 

A report by the IMA that surveyed 751 financial professionals concluded that: 

  • On average, it takes seven days to complete the closing process 
  • Two-thirds of the respondents said they rely heavily on spreadsheets increasing time spent on financial statements as well as the risk of inaccurate results. 

Despite the risks associated with manual effort, it is still a prevalent method of matching and reconciling transactions at financial organizations – simply because the transition to automation is slow and often undermined. 

Problems with Managing High Volume Work

One-to-many or many-to-many relationships between data sets often need to be reconciled, but having to do that manually can lead to false assumptions and individual errors. With high-volume work, limited timeline and support, staff working on these data elements may become overwhelmed, thus overlooking crucial data points. This is literally opening the door for missed entries and costly financial data errors. 

Excessive workload may also cause employees to be negligent, ignoring unclear items, falsely making assumptions about data sets which ultimately cause delays, errors and many more substantial issues. 

Employee Burnout and Talent Retention

While those who choose accountancy do it for the love of numbers, they fall into a trap of repetitive manual tasks. Matching of spread-sheets that take precedence over other problem-solving tasks. 

Moreover, repetitive tasks prevent employees from adding value and critical thinking to processes which they ideally should be doing. Instead, they spend most of their time making sense of data, head deep-buried behind mountains of paperwork. 

The result? They are no longer happy with their job. The organization has to focus on employee hiring, training and retention all over again. 

All these problems could be significantly curbed through the use of automated transaction software. 

Benefits of Using an Automated Transaction Matching Software

Whether you recognize it or not, your organization will eventually need to invest in automated systems and processes. The reconciliation process of ledger balances, the matching of entities against other entities, the transaction of financial at multiple places involves are tedious tasks that involve disparate systems and sources.

Here’s how an automaton solution can help: 

Ensures accuracy

For a human to verify, identify and ensure 100% accuracy across multiple layers of data is impossible. There will always be errors. An automated software ensures accuracy as it uses a predefined system-based logic to automatically perform the matching. You don’t need to rely on manual sifting of volumes of data. 

Meet Closing Deadlines

Avoid the last-minute pressure of a closing deadline. Reduce tedious manual labor, shorten your close and give your employees a chance to breathe. The software solution will take only minutes to perform a transaction matching which would take your employees days of constant pressure to get done. 

Integrate with Your Data Sources

A good transaction matching software will let you automatically integrate your information in the software so you can perform transaction matching without having to jump between files or sheets. You don’t even have to manually copy/paste or import the file. All you need to do is integrate the database with the software, and let the software perform profiling, concatenations or data standardization based on user-defined standards. 

Automate Matching

Match across unlimited rows of data or multiple data sets with a rules-driven process that lets you automate high-volume financial reconciliation in real-time. The integration of your database with the software allows for instant, real-time matching, ensuring an instant and accurate data matching.

Read this post to know more about matching software and solutions.

Remove Redundancies and Errors

Chances are you have contact information spread across multiple data sources which could lead to redundancy and duplicates. If manual entry is still a process in your organization, then the possibility of human error increases. The transaction matching software will also enable you to identify duplicates and provide a single source of truth (enter blog post here). 

Reduce Risks

As mentioned above, the biggest challenge with manual transaction matching is the risks of error, of negligence, of inaccuracy, of incomplete or unstructured data sets. Reduce risks by letting the software identifying and addressing differences, duplicates, redundancies, and any other data quality issues

As the world moves towards a digital landscape, it’s no longer advisable for your financial institute to rely on traditional reconciliation methods. Your data volume will improve exponentially as will your data sources especially if other departments in your organization are integrating digital channels as part of an overall digital transformation initiative. In the midst of all this, if your accountants still have to match gigabytes of data manually, your organization may face revenue loss, talent loss, and even market share loss. 

At Data Ladder, we’ve worked with a number of financial institutions that have moved from manual processes to using our transaction matching software. 

Here’s an interesting case study. 

Lamb Financial Group – Case Study

Lamb Financial Group is one of the fastest-growing insurance brokers in the country, providing financial services exclusively to non-profits and social service organizations nationwide. The company is dedicated to finding insurance required by local charities tackling some of society’s toughest issues. Based in New York, the organization works with carriers who specialize in nonprofits and charities, providing Worker’s Compensation, Casualty, Professional Liability, Property, Auto, Directors and Officers, Group Health, and Disability Insurance.

Business Situation

The organization needed to extrapolate data from different sources. With slight differences in the key field, they needed to reduce the amount of data scrubbing and save time with data cleansing. With accuracy being such an important part of their business, maintaining a high level of standardization was also very important for the organization. It was critical to be able to have a data software tool that can bridge the gap with reconciling differences with all the data being combined and link records together accurately.

Our Solution

DataMatch Enterprise™ was an easier data cleansing and matching solution for the organization. They were able to quickly use our Wordsmith™ function, which is a standardization tool to create custom library settings. This option for standardization along with matching and cleansing features made DataMatch Enterprise an important part of their process when importing new data into their CRM.

Benefits of Using Data Ladder’s DataMatch Enterprise

Data Ladder’s cleansing and matching toolkit has helped the company to do more with less oversight, optimized their workflow by several hours each week. This is especially useful for them when dealing with large volumes of reconciliation data. 

Using our DataMatch Enterprise system as a transaction matching tool, you get to: 

  • Save up on manual labor 
  • Perform batch or real-time matching 
  • Profile your data to identify problem fields 
  • Standardize data to ensure consistency 
  • Integrate multiple databases into the software (Quickbooks, Excel etc) 
  • Perform high-volume data matching across data sources
  • Ensure accuracy and precision in reporting 

For finance organizations, data is not only fuel, it’s a lifeline. There is no room for errors, compromise in accuracy or in usability. Yet, manual processes are the leading cause behind inaccurate reporting, mismatched customer info, and many other quality issues. In this digital age, a finance company can no longer rely on manual processes. Speed, accuracy, instant response time is the new requirement. 

Get your FREE consultation with our specialists to see how our data matching tool can help you with reconciliation and transaction matching. 

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