Changes in STP initiatives and the new Basel II Capital Accord are intensifying the need for automated reconciliation solutions.

In a new report, "Ranking the Vendors of Reconciliation Systems," Celent Communications provides an overview of the reconciliation process in addition to analyzing and ranking thirteen major vendors' solutions.

Celent's top picks (Table 1) were selected according to criteria that included: product coverage, data transformation capabilities, matching rules, workflow automation, archiving capabilities, and scalability, among others. Rankings were derived from extensive interviews with vendors, clients, prospects, and other market participants.

Reconciliation systems are changing. Traditional post-settlement trade and cash reconciliation processes are being replaced with systems that cover the complete transaction life cycle (order, execution, allocation, confirmation, matching, settlement, etc.). The new systems are capable of handling complex data transformation and generic reconciliation with unlimited matching capabilities. In addition, today's systems semi-automate exception management in an effort to achieve near real-time processing.

"With the spotlight on operational risk and business efficiency, securities firms are taking a hard look at their middle- and back-office processes, including reconciliation," says Celent senior analyst Pamela Brewster, co-author of the report. "Today's reconciliation platforms, with their advanced functionality, look to improve the reconciliation process by making information more accurate and automating operational flows across the transaction life cycle."

The following vendors were profiled in this report: Accurate, Aqua Global Solutions, CheckFree, City Networks, Electra, FMC, Monro Business Software, Optinfo Inc., Placid S.A., SmartStream Technologies, Sterci SA, SunGard, and Trintech.