SWIFT stands for Society for Worldwide Interbank Financial Telecommunications. It provides a network that enables the financial institutions worldwide to send and receive information about the financial transactions in a secure, standardized and reliable environment. SWIFT does not facilitate funds transfer. However, it sends payment orders which are settled by correspondent accounts that the institutions have with each other. It is considered as one of the largest financial messaging systems in the world and certain currencies can be sent or received via SWIFT payment. In accounting, reconciliation is the process of ensuring that two sets of records are in agreement. Reconciliation process of accounting records shown on a bank statement vs SWIFT statement messages is all together termed as SWIFT Recon. Financial Services firms are turning their attention towards reconciliation systems as data grows in complexity and volume.
The goal of this process is to ascertain the differences between the records maintained by the bank which is referred to as dump data and the information on the transactions received from the SWIFT data. These differences are booked as changes to the accounting records. The scope of the problem is to reduce the time taken & increase the accuracy for this reconciliation by automating the process through SheetKraft. The SWIFT reconciliation label helps the third-party application vendors as well as the Audit Department to streamline middle-office and back-office operations used to match and reconcile large volumes of securities transaction data (which includes equities, fixed income, derivatives and funds) and payments. The Reconciliation criteria used is based on the message types. The various message types involved in SWIFT are classified into four areas are as listed below:
The user manually logs into multiple systems such as Finacle Treasury, Metagrid, CCIL website, etc. & downloads various files required for reconciliation. Since the downloaded files don’t have a similar structure, the user manually opens each of the files, selects relevant data & collates it in a structured format. Similarly, the SWIFT files are collated and then they are compared with the transactions maintained in the bank’s records. Every single transaction from SWIFT file is matched with the Bank records on the basis of the Deal Number, FBO Number, Transaction Reference Number / Related Transaction Reference Number. Later, reconciliation is also done on the basis of transaction/settlement amount to book changes in the accounting records if any, which approximately takes around 3-4 hours per day provided the VLOOKUP function in Excel is used. If the data doesn’t match, then each transaction needs to be compared manually by entering the reference ID in the system which takes almost a whole day for process completion. Due to the immense amount of manual work done on a daily basis, the process was proposed to be automated using SheetKraft.
Using SheetKraft, all the files required for reconciliation are extracted directly from the respective system’s database which drastically reduces work time. Since, downloading & collating the data manually from different sources consumes utmost time. Also, the activity is scheduled to run automatically at a predefined time with current business working date as an auto filled input. So, without any manual intervention the user can get the Summary Reports in their mailbox or generated at a shared drive path as required. The process run takes less than a minute to generate the SWIFT Recon reports.