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Insights and Expertise

From silos to The problem with siloed systems

Historically, each back-office function evolved on its own
synergy through timetable, often driven by specific regulatory, network or
customer needs. That led to a patchwork of tools:
back-office • One system for reconciling daily transaction totals

integration • Another for assessing and applying network and
interchange fees

• A third for generating and managing settlement
files

• Yet another for tracking disputes and chargebacks

This siloed approach causes several operational pain
points:

• Data inconsistency across platforms
• Delayed reconciliation and settlement reporting

• Manual handoffs that introduce errors

• Limited visibility into real-time operations
• Inefficient dispute resolution, often lacking context

In an era of real-time payments and customer expectations
for instant transparency, these inefficiencies are resulting
in significant operational challenges and processing
By Michael Meeks bottlenecks.
BHMI The power of integration
n today’s fast-paced payments environment, front- By consolidating reconciliation, settlement, fee assessment
end innovations like real-time payments and mobile and dispute management into a single software ecosystem,
wallets often grab headlines. But behind every payment organizations can:
I seamless transaction lies a network of complex back-
office processes: reconciliation, settlement, fee assessment • Improve data accuracy: When all functions operate
and dispute management that must run smoothly to from the same consolidated view of the data, dis-
ensure accuracy, compliance and customer satisfaction. crepancies shrink. There’s no need to access data
from multiple systems—because all back-office pro-
For many financial institutions and payment processors, cessing uses a unified view of the transaction life-
these functions are still siloed and managed in fragmented cycle.
systems that don’t speak to one another. This operational
disconnect creates inefficiencies, delays and risk that can • Accelerate reconciliation and settlement: With re-
no longer be tolerated in an always-on, real-time world. al-time access to unified transaction data, integrat-
ed systems can automate matching and settlement,
According to the Aite-Novarica report titled Payments speeding up cash flow and reducing exceptions.
Modernization and Technology: Priorities, Challenges, and • Reduce manual effort and errors: Integrated sys-
Partnerships, about 40 percent of banks believe the technical tems automate handoffs between departments and
challenges of integrating with legacy systems are a major eliminate duplicate entry, freeing teams from te-
obstacle to rolling out new products and services. That dious, error-prone tasks and allowing them to focus
number increases to 57 percent when considering real- on exceptions and analysis.
time payments specifically.
• Enhance dispute management: When dispute
To streamline workflows, reduce costs and future-proof teams can see the full context of a transaction—fees,
operations, forward-looking payment providers are timestamps, settlement status, and reconciliation
embracing integrated back-office ecosystems that connect history—they respond faster and more effectively.
all core back-office functions in one environment.

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