Creating automated reconciliations processes in a more timely manner, along with greater visibility of the resulting reconciliation items, is a key element to reducing risk. It was one of the important drivers behind ING Investment Management (ING IM) in Australia choosing TLM® Reconciliation Software to manage the reconciliation control requirements of around 1,000 portfolios with a value of approximately AU$40 billion.

CASE STUDY

As part of the specialist investment network of the Dutch ING Group, ING IM has a strong presence in Australia and prides itself on offering investment management expertise across all major asset classes. ING IM used to perform daily cash reconciliations for all accounts and fortnightly or sometimes monthly reconciliations of its securities in a ‘semi-automated’ environment using Excel spreadsheets, Access databases and other desktop tools.
A team of seven people produced and managed the reconciliations function, with a further two staff analysing the end result and checking data integrity.

However, as Steve Parkinson, Director of Operations at ING IM, explains, these processes did not produce the “control” environment that the institution desired. “With semi-manual processes and the time it took to reconcile securities we believed we were leaving ourselves exposed to unnecessary data integrity risk, particularly on the securities side,” he adds. To reduce this risk, ING IM wanted to build a “control” environment around best-in-class, packaged technology to give it confidence that the data supplied from its investment system reflected actual positions within its portfolios.

To support this vision, ING IM selected SmartStream’s TLM Reconciliations due, says Parkinson, to it being “the market leading solution with a good reputation and excellent references from other organisations.” As part of its initial roll out, ING IM selected around 70 portfolios that represented a cross section of its overall business and the securities held within them. “That analysis took around five months because of the many different types of securities, along with the differing format of data received from third parties, even though we used SWIFT messages where we could,” explains Parkinson. With the analysis complete, TLM Reconciliations was implemented for approximately 80 percent of the securities held within those first 70 portfolios. A second phase added a further 700 portfolios for the same security types, while the third phase included another 150 portfolios to the solution. A final phase
will shortly see the remaining portfolios migrated. With the majority of its portfolios now utilising TLM Reconciliations, ING IM completes all of its cash, securities reconciliations at settlement and securities holdings reconciliations on a daily basis.