by Eugene Grygo
London-based Cardano Risk Management Ltd., a specialist fiduciary manager, has made the move to intraday reconciliation and reports that it is saving time and money via the more efficient operation. Part of the Cardano Group, the asset manager serves pension funds, insurance companies and other organizations. The London branch has been using a recs offering from Electra Information Systems since November 2016, says Freddy Roddenhof, head of U.K. operations at Cardano, in response to questions from FTF News.
But, about a year later, the firm moved up to the “new Electra intraday reconciliation functionality,” which was implemented in September 2017. Cardano is “the first to implement this functionality,” Roddenhof says. The firm decided to transition to the Electra Reconciliation offering to facilitate intraday reconciliation as a way to combat inefficiency and mitigate the risk that is inherent in waiting a day or so to resolve exceptions. Intraday reconciliation has become more appealing to financial services firms as they increase the frequency of processing reconciliation data and want to move beyond overnight file processing.
“We were using Electra without the intra-day functionality before implementing the new functionality. Prior to using Electra, we were using [Microsoft] Excel [spreadsheets], loading and mapping data via macros,” - Freddy Roddenhof, head of U.K. operations at Cardano Risk Management Ltd.
The new intraday support helps the firm become more efficient “allowing us to be current and accurate in our record- keeping throughout the day,” Roddenhof says, in a prepared statement. “This is a key factor in satisfying the increasing demands on operational support,” he adds. The new functionality is “significantly useful, considering we have three reconciliation runs on a daily basis, with the new functionality saving direct costs and time spent on each reconciliation,” Roddenhof says. The upgraded system is being used by 10 operational staff members working in the firm’s London office, Roddenhof says. “We were using Electra without the intra-day functionality before implementing the new functionality. Prior to using Electra, we were using [Microsoft] Excel [spreadsheets], loading and mapping data via macros,” he says.
Beyond the London office, there is the potential that Cardano may expand intraday reconciliation to its Rotterdam office, Roddenhof says. “The instruments covered are: cash, futures, bonds, OTCs [over-the-counter instruments] and FX forwards,” he adds. Post-trade solutions provider Electra uses “a proprietary algorithm that identifies and excludes duplicate data while allowing true reconciliation updates to enter the workflow,” vendor officials say in a statement. “This approach to delta identification eliminates the importing of erroneous exceptions and the time lost investigating them. Electra Reconciliation also manages the migration of exception management- related material between the historical data in the solution and all incoming delta updates. This important feature safeguards the integrity of the investigation audit trail.”
Previously, investment managers revisited “exceptions that have already been investigated and corrected in their core systems, introducing redundancy to the reconciliation process,” says Todd Sloan, senior vice president at Electra, in a statement. Cardano Risk Management Ltd., overseen by the Financial Conduct Authority in the U.K., offers fiduciary management, investment advisory and investment services for its defined benefit clients, officials say. The firm also offers investment and risk management support for defined contribution clients. The U.K. extension is part of Cardano Risk Management B.V., headquartered in Rotterdam, The Netherlands.
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