Data Migration: Reconciliation Holds Key To Success

Data Migration

When you think of reconciliation software you’re most likely to associate it with reconciling financial transactions such as cash and stock records. An area that isn’t so obvious is the use of reconciliation software to support data migration projects – but it’s an area where we are seeing significant interest.

Advances in technology offer compelling reasons for banks and other financial organisations to undertake core system migration projects, which often deliver significant business benefits and competitive advantages. But, of course, such projects are seldom simple to manage. Moving hundreds of thousands, if not hundreds of millions, of transactions from one system to another is not an easy task, even for the most experienced of teams.

The sheer volume of data that should be reconciled during the process can be overwhelming and impossible to handle manually. This has, in the past, led to spot checks across random samples of data being checked, but not the full population of data being reconciled. The potential risks to the business of getting things wrong, based on only checking a subset of the data, are vast.

If problems are found in the migration early then financial risk is likely to be the biggest contributor to loss of time and money. The organisation would need to roll systems back, re-plan the project and co-ordinate the significant numbers or people and processes required for a new system go-live.

If data consistency problems exist, but are not identified immediately as a result of poor control and lack of full reconciliation, then on top of the financial risks, the organisation’s reputation will be seriously called into question. Imagine the damage to the business if these projects only come to light further down the line: clients unable to log on, or presented with incorrect or missing information on the portal.

At this point the impact will be significant: days (or weeks) of downtime with no system access while systems are rolled back, transactions replayed, clients reassured and the entire migration projects is re-planned. Recovery from such a scenario won’t be easy, cheap or quick. It could take several months before the system migration is ready again. The cost to the business is huge.

Some might question why it is necessary to move all data and not just active transactional data when conducting the migration. But if the impetus to move from legacy systems to new technology is driven by the cost of supporting those systems, then it is cost prohibitive to have both running in parallel.

The number of other systems that rely on core systems is also vast and maintaining connectivity and messaging flows very complex and expensive. Transactional data is just one component of the data to be moved, there is also static and supporting data which is becoming more and more complex. KYC, entity relationships and multiple reporting jurisdictions provide complicated interdependencies that are difficult to maintain correctly in one system, let alone in two.

Until recently, there has not been an affordable answer to the problems and risks associated with large system migrations, but next generation reconciliation software now offers a solution, bringing real-time financial certainty to complex migration projects.

Jake Sweeney joined Gresham in 2013 to lead business development operations in Asia Pacific for CTC, Gresham's real-time matching and reconciliation solution. With more than 15 years' experience in the FinTech space, Jake was previously at SmartStream Technologies, CheckFree and Mercator Software.