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Bank Statement Reconciliation - is ISO20022 XML the Answer?

In an important article on gtnews Mark Sutton, Director, Senior Payments and Integration Services Consultant at Citibank and Ed Barrie, CTP, Itron asked the question ‘Taking Bank Statement Reconciliation to the Next Level - is ISO20022 XML the Answer? They considerd the challenges that currently exist in the bank statement reconciliation space and the experience of technology company Itron, which is one of the early adopters of the ISO 20022 XML statement message - known as camt.053.

Key challenges in bank statement reconcilation

Sutton listed the four main challenges that need to be overcome to  implement a smooth and efficient account reconciliation process - data quality, local payment practices, operational setup and technology. 

He felt that to move “corporates into the ‘best in class’ operating model category required achieving the following:

  • Improved cash application through higher auto matching rates.
  • Reduce days sales outstanding (DSO).
  • Improved customer service as credit lines are freed up.
  • Improved risk management, through earlier identification and management of late paying clients.”

And pointed out the critical importance of the CGI standards initiative in improving the A/R and A/P processes and reconciliation.

Case Study: Itron, Inc 

The article then described Itron’s - a global multinational corporation (MNC), providing technology solutions and services to the utility industry with subsidiaries in more than 30 countries - experience in using the enhanced data and the improved straight-through processing (STP), reconcilement, reporting and analysis, and risk management they achieved. 

The article concluded that: “Reflecting back on the original question around whether ISO XML statement messaging is the right answer, in the case of Itron it has clearly improved and enhanced their existing statement reconciliation processes.” And, not surprisingly, given the level of detail and thought in the article, they finished with several important ‘howevers’. Read more in the full article - recommended - here.

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Bank Fees Reconciliation & Negotiation