Introduction:

In the dynamic world of financial markets, Exchange Traded Derivatives (ETDs) often involve complex fee structures determined by various factors such as membership status, security traded, volume, and transaction type. Manual reconciliation of these intricate exchange fees poses significant challenges for Futures Commission Merchants (FCMs), Broker Dealers, Investment/Asset Managers, and Bank Office/Fund Admins. Recognizing the need for automation, a leading global financial services company sought to streamline its end-to-end exchange fees reconciliation process.

Challenge:

The FCM arm of the company grappled with manual reconciliation processes across numerous clearing relationships with major clearing houses. The complexity of exchange fee structures, coupled with diverse representations of trade data and pricing factors, made manual reconciliation error-prone and time-consuming. Existing reconciliation systems lacked the flexibility to accommodate the intricacies involved, exacerbating the challenge.

Solution:

To address these challenges, the company opted for an automated reconciliation solution provided by EZOPS. Leveraging advanced automation capabilities, EZOPS devised a solution to automate the entire reconciliation process, from data capture to break remediation. Key features of the solution included:

• Direct file retrieval from third-party sources and internally using APIs
• User-driven Extract, Transform, Load (ETL) processes to harmonize data across parties
• Configurable reconciliation and matching rules to accommodate consolidated data, complex fee structures and data representations
• Intelligent Process Automation (IPA) rules for break classification
• IPA Bots for seamless integration of exchange breaks into the accounting system

Key Results and Outcomes:

Implementation of the automated reconciliation solution yielded significant results and outcomes:

• Drastic reduction in manual effort and time spent on reconciliation tasks
• Minimization of errors and discrepancies in fee reconciliation processes
• Enhanced accuracy and granularity in exchange fee calculations
• Improved efficiency and scalability to handle diverse clearing relationships and fee structures

Key Metrics:

• Reduction in reconciliation time
• Decrease in reconciliation errors
• Increase in operational efficiency
• Improvement in client satisfaction scores

By embracing automation and leveraging advanced reconciliation technologies, the company successfully streamlined its exchange fees reconciliation process, paving the way for enhanced operational efficiency and client satisfaction.

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