Financial institutions contend with two major problems during transaction reconciliation and settlement–

• Global increase in transaction volumes, primarily due to an increasing affinity by consumers towards digital payments.
• Multiple data formats as transaction data originates from multiple channels – ATM, PoS, online banking, mobile banking, smart devices.

For many institutions, the process of reconciling transactions is time consuming and prone to inaccuracies as they are reliant on either manual or semi-automated processes. FSS Smart Recon simplifies and automates the reconciliation process with a Zero Touch model, which in turn helps FIs save significant time and costs.

Over the last few months, FSS has enhanced its Smart Recon platform to onboard new reconciliation types, optimize reconciliation cycles and improve efficiency of the Recon systems. The critical upgrades made recently include:

NETC for FASTag Reconciliation

NPCI developed the National Electronic Toll Collection (NETC) program to meet India’s electronic toll requirements. NETC FASTag is an interoperable, nationwide toll payment solution that uses RFID. FSS Smart Recon has been enhanced to support end-to-end reconciliation of FASTag transactions for banks.

NEFT and RTGS Reconciliation

FSS Smart Recon reconciles inbound and outbound NEFT and RTGS transactions by collating data from Core Banking System (CBS), Structured Financial Messaging System (SFMS), and National Electronics Funds Transfer (NEFT) and Real-time Gross Settlement (RTGS) systems. The system reads this data, auto-matches transactions and performs reconciliation.

ATM Cash Tally

ATM Cash Tally compares ATM cash balance entries from Cash Balancing Report (CBR), Electronic Journal, Switch files, and Host (ATM General Ledger) to ensure the records are in sync. FSS Smart Recon has pre-configured reconciliation rules to tally the dispense, load, deposit and closing balance of ATM terminals and identify cash excess and shortages.

In the Cash Tally process, the system performs three reconciliations based on which operations team can view the cash status for ATM terminals.

• Load Tally – Reconciles cash balance in the ATM Terminal with the ATM General Ledger balance.
• Dispense Tally – Reconciles cash dispense on each terminal between two cash loads.
• Closing Balance Tally – Carry-forwards the adjustment entries, after which a Tally report is generated.

The process aids in identification of cash excess and shortages.

Excess and Shortage Tracking

Operation teams can correlate these excess/shortage entries with adjustment entries. If the records match, the entries are knocked-off and moved to the reconciled table.

Tally Report

ATM Cash Tally reports helps operation teams gain insights into the Cash Tally process. The reports can be generated for any periodicity.

• Cash Tally Report – View tallied transactions information on every terminal.
• Untally Report – View untallied transactions information on every terminal.
• Adjustment Report – View per terminal transaction adjustments.
• Summary Report – Provides a summary of tally, untally and adjustment transactions for an ATM terminal.
• Cash Management Record (CMR) Report – Provides a summary report for all vendors against CMR submitted by them.
• EJ Error Knock-off Report – View exception records based on the transaction dispute responses in EJ.
• Cash Tally Parking Report – View transaction records moved to the reconciled table.

AI/ML based Settlement Framework

Smart Recon relies on a pre-configured rule-based framework for transaction settlement between multiple entities. In event of a change made by the Interchange, new component entries in the settlement file can go unnoticed, resulting in a mismatch in the total settlement amount. The AI-based Settlement processes helps detect new entries in the file received from the interchanges and notifies it to the operation user via the portal. The operations user can then configure the new component prior to the start of the settlement process, ensuring quick close of financial accounts. This helps in reduction in settlement time by up to 80 percent.

Universal Data Wizard

The Switch and the Host files received for reconciling transactions are vendor-specific and proprietary in nature. For every new implementation Smart Recon needs to configure the following processes:

• Reconciliation Rules
• Extraction Rules
• Reconciliation Reports
• Extraction Reports

This is a time-consuming process that prolongs reconciliation cycles. The Universal Data Wizard alleviates this by optimizing set-up time. It contains a superset of data for multiple Switch and Host file formats based on which its processes are preconfigured in the system. For any new implementation, it simply extracts the relevant data and automatically maps it to its corresponding superset, optimizing time to onboard new reconciliation types. All mapped fields can then be viewed on the Smart Recon GUI.

AWS Cloud Deployment

FSS Smart Recon has been deployed on the AWS cloud, improving the economics of ownership. It significantly reduces the time to implement, brings in the convenience of easy upgradation and maintenance as well as provides scalability to accommodate increased workloads. FSS Smart Recon is also available on the Microsoft and Oracle cloud.

APIs to Improve Operational Efficiency

FSS Smart Recon deploys standard APIs to interface with bank’s internal systems. Some of the recent APIs developed for Smart Recon which connect with the reconciliation platform are –

Consumer Data Fetch API – Operation teams need to enter several customer details – Account Number, Credit/Debit card details during the reconciliation and adjustment process. Consumer Data Fetch API automates the manual process of feeding data by connecting CBS with Smart Recon which auto-fills these details.

Instant Dispute Management API – The Instant Dispute Management API helps Issuers, Acquirers, and Interchanges to interface with FSS Smart Recon. Users can view, search, and monitor status of transaction disputes at a single web location. Issuers for instance can raise and check the status of chargeback requests. Acquirers likewise can verify the transaction details and settle the dispute instantly.

User Role Mapping API – User Role Mapping API helps define system user roles and privileges.

Notifications and Alerts

FSS Smart Recon supports a rule-based notifications and alerts module for almost all reconciliation processes – auto-match, exceptions, and disputes. Operating teams can use pre-built templates or customize alerts in line with their business requirements.

Use Case

Banks need to comply with regulator timelines on dispute closure and manage them within a specific Turn Around Time (TAT). For instance, according to the Reserve Bank of India’s circular on Harmonization of TAT, Indian banks need to pay a daily penalty of INR 100 to the customer if the amount is debited from the payer account but not credited to the payee account, or if the transaction is not reversed within a specific TAT. This TAT is as low as –

• T+1 day for card-to-card transfers, Immediate Payment Service (IMPS), prepaid instruments, National Automated Clearing House (NACH),
• T+5 days for ATM withdrawals and PoS transactions.

Notifications and alerts with built-in escalation flows ensure teams comply with the guidelines by pinpointing delays in the resolution process.

EDB Postgres Migration

FSS Smart Recon supports the EDB Postgres Database, lowering total cost of application and ownership for banks.

Multilingual Error Messages for Enhanced User Experience

FSS Smart Recon GUI is now made more user-friendly with multilingual translation for its exception and error messages.

To schedule a demonstration, write to products@fsstech.com.