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Holes in the data lifecycle hinder payment digitization

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In the world of data, the quest for a single source of truth, or golden data source, is a constant challenge. In fact, many financial institutions and market infrastructure providers have worldwide teams to maintain their extensive assets and infrastructure.

It takes effort and ongoing work to organize, place in a known state, perpetuate and maintain data sets. Keeping data in sync and without breaks across the enterprise isn’t always easy, but it is essential, and starts with eliminating friction.

In the financial markets, reconciliations of crucial operational data are have been a challenge in areas like operations, settlement, collateral and treasury. This is because financial markets are fragmented and siloed, having numerous internal systems built up over time, across geographies and legal entities, or obtained through acquisitions.

This inevitably creates external friction. Furthermore, there are unavoidable variances in databases in how assets, even the same ones, are represented as data as they flow through financial institution systems, creating internal friction.

Exceptions and breaks are a constant, and significant reconciliation efforts remain a fact of life for financial institutions. Data — as a representation of an asset — gets disconnected from the life-cycle events that transform it, so that even copies of the same asset can be in different states in different databases and stored with different attributes. While there has been significant progress over the years, getting to a single source of truth remains a significant task, addressed by large operations teams, and with high business costs.

Systems generate error or exception reports that must be acted on semimanually or manually to be resolved, often across departments and geographies, only for the process to repeat in the next cycle. To address these problems of internal friction in reconciliation, and in data synchronization, institutions need to create a golden data source which combines data and life-cycle events, meaning you also have end-to-end event lineage and visibility to deliver data that is guaranteed to be reliable.

If you’re delivering a single source of truth, data with all its context, to both sides of a payment, you effectively eliminate the need for reconciliation. This is the first step on a greater journey to data transformation.

Problems in reconciliation that once took hours of online and offline effort can be solved quickly and in real time. This enables customers to move beyond the repeated nightly cycle of exceptions, break fixes and resolutions and establish a process that is a true step forward from the current state of operations. This is a powerful tool for addressing core financial institution reconciliation data problems in a world where data is recognized as being as important as gold.

Identifying a golden data source is a prerequisite and the beginning of the journey on the path to digitization for financial institutions (e.g. transaction data, market data, reference data, metadata) as well as creating new opportunities for data monetization.

Once a dataset’s data and life cycle events are in a known state with lineage, new and exciting opportunities are possible. For example you can share the data, use it to build products, leverage it to improve internal processes, and look at complex reconciliation processes and address them. But this is just the beginning, and we’re excited to see what’s to come.

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Data management Payment processing Digital payments Risk ISO and agent
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