ERFcheck, the bank reconciliation automation expert

In the banking sector, automation is gaining importance not only because it multiplies efficiency, but also because it allows institutions to free their human talent from tedious tasks to focus on other value-added tasks, such as personalising products and services or providing financial advice, especially in the current context of restructuring and the need to reduce costs to remain competitive.

Bank reconciliation, understood as accounting reconciliation between different databases, acts as a strategic process. "The aim is to ensure that balance sheets are balanced so as not to lose control of cash flow, to guarantee financial management and to detect, mitigate and prevent errors that can lead to losses in the millions and cripple a bank's entire accounting department," explains Alicia Martín Darriba, project manager of ERFcheck, the software that specialises in automating Prosegur AVOS's bank reconciliation.

Reconciliation of these figures, which represent, for example, deposits, fixed or variable income or customer transactions, is at the heart of important services: from agreements with foreign companies to enable international transactions, to the reconciliation of securities such as shares, bonds or funds in which customers invest, to everyday operations that require coordination between the front-end  system used by customers (such as the  onlinebanking site or the branch where a product is concluded) and the back-end system where the company registers and stores the same data.

The general public does not know much about banking reconciliation, even though banks by definition performs constant and extensive reconciliation, and it is a critical part of their operations.

One of the keys to digitalisation is that it is a macro trend that is not only continuous but accelerating. According to the Digital Banking Maturity 2020 report, the Spanish banking sector was already one of the most advanced in the world in terms of developing digital channels, for example, with institutions where more than 70% of customers use them.

And in the pandemic, this process increased speed rapidly. As the Ministry of Economy and Digital Transformation points out, what would have taken five years at the previous pace was achieved in just one year, and the automation of business processes was also accelerated.

According to HSF Research and KPMG International, areas such as robotisation software, artificial intelligence or data analytics were important before 2020 to reduce costs or improve brand value, but in the post-virus economy they will be directly "critical to the survival of businesses".

And so can the summary tables or dashboards, which are designed in a visual and intuitive format to capture at a glance basic audit data, such as how many entries have been matched and how many and which are open because they do not match. "We are simplifying a complex process so that the user can easily manage it and focus on what is important - analysing discrepancies and resolving them. Reconciliation errors are reduced by over 90%, and so much less time is actually spent on this task," adds the expert.

Usability also extends to the overall model of the service: Once the software has been customised based on the work shared with the client, all that is needed is a brief roll-out into the company's systems and the service can be used from any device via a website.

"This combination of good user experience and performance means that there is little resistance to the change. On the contrary, people are grateful for the automation of such a delicate task, as it saves time and money, greatly reduces the risk of sanctions and improves the institution's reputation in terms of quality of service and progress in the digital race," concludes Martín Darriba.

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If it is so important, can it keep up with digital acceleration? Not always. Until just six years ago, when ERFcheck was developed, many financial institutions kept hundreds of employees busy reconciling accounts with paper and pencil or, at best, Excel spreadsheets and macros. Although it is less common today, people still work manually and a large number of institutions have not implemented a specific solution.

There are hundreds of reconciliation  software solutions, but most of them target SMEs, not companies with huge volumes of data and transactions with immense big data processing capacity requirements. ERFcheck, for example, manages more than 100 million booking entries per month for banks in Spain, the US and Australia. It takes only 15 minutes to load and process a million records, and about 10 minutes to complete the reconciliation and report discrepancies or errors in the balances.

Functionality and transparency for the user are also crucial, as is the customisation of the tool to each bank's profile. And that's how the working model for configuring ERFcheck developed: "It's a consensual process, based on trust, person to person," says Martín Darriba. We sit down with clients to understand their needs and define how the tool can meet them. They tell us the business rules they want to set up and the reference fields such as: Reference, Amount, Value Date or Item, and we configure and customise the tool for them as needed."