Monitoring is one of the most important components of internal control. It enables the teams involved to detect errors and make improvements. Without monitoring, vulnerabilities go unnoticed, and minor irregularities can, in the worst cases, lead to major problems.
Banks like Vontobel post millions of transactions every year, from payment orders and receipts to stock market orders, dividend payments, and interest on securities, to name just a few. In theory, Vontobel and its external business partners (cash correspondents, custodians, etc.) will post all transactions without delay and in an identical manner.
— But what happens when there are ambiguities, delays, or errors on one side? How are the resulting discrepancies recognized and resolved?
Our dedicated Reconciliation team checks the transactions downstream from the Transaction Banking processes. The team compares transactions against the appropriate records or systems to provide confirmation to internal and external clients that transactions have been executed/posted correctly. It ensures that internal account balances and securities, precious metals, and crypto holdings correspond with their actual levels. The Reconciliation team notifies any differences to the team responsible and monitors any discrepancies detected until they have been resolved.
— What challenges do you face on the Reconciliation team?
The constant technical and procedural changes in upstream process chains. If a new posting logic is introduced or an existing one is changed, or if the way data is delivered is altered, this can have a major impact on day-to-day controls. Because of this, we are involved in a wide variety of projects; the objective is to recognize effects on our control processes early on and make any necessary adjustments.
Another challenge is dealing with the various systems and data interfaces. The large number of controls required due to the sheer breadth of our product range means we have to work with a wide variety of IT programs and data suppliers, so it’s only natural that there are different posting logics and types of data delivery. Another issue is the lack of an international market standard for reporting transactions and holdings (e.g. crypto) that covers all products. You need reconciliation specialists who can use IT systems and interfaces to build meaningful controls and enhance existing controls.
