First Federal Bank Overcomes Growing Pains and Manual Processes With Frontier Reconciliation
When First Federal Bank experienced rapid growth due to acquisitions, its manual reconciliation processes could not keep up. Timeliness, data accuracy and exception management suffered, as did the overworked accounting team. So the bank implemented FrontierTM Reconciliation from Fiserv.
Challenge
When First Federal Bank acquired several financial organizations in quick succession, transactions skyrocketed. The bank eventually grew from $500 million to $2 billion in assets and from nine branches to 24 branches. The burden of manual reconciliation processes became overwhelming and the accounting team worked extra hours to maintain account reconciliation.
Solution
First Federal turned to Frontier Reconciliation to automate reconciliation, making exceptions instantly visible and reducing or eliminating manual intervention. The solution minimizes the risk of financial misstatements and drives a faster and more accurate financial close.
Proof Points
Frontier Reconciliation reconciles all daily accounts, enabling the bank to resolve exceptions in weeks instead of months and reduce the potential for fraud or misstatement. In addition, employee satisfaction increased because of the reduced workload, and the bank achieved its goal to have more efficiency through automation, with fewer paper processes.
Automated Reconciliation: A Smart Decision
Brooke Hand, SVP and controller, said, "Our bank thrives on its positive culture and strong focus on customers and employees. The tremendous effort it took to reconcile accounts using manual processes was not aligned with our approach. It was not efficient or effective for employees to spend so many manual hours on the financial close, when technological solutions exist."
Reconciling accounts manually and rekeying data left the bank vulnerable to possible errors, inaccurate data and even fraud. Exceptions took months to research. Using Excel spreadsheets "required countless hours" to reconcile accounts, Hand said. "Every balance sheet for every account had to be manually signed off."
In 2007, the bank implemented Prologue™ Financials from Fiserv, a fully integrated accounting solution. (The bank also uses Premier® from Fiserv account processing platform.) According to Hand, adding Prologue Financials was an "amazing experience" and when the bank decided to automate reconciliation in 2009, Frontier Reconciliation was a front-runner. But it wasn't until Hand went in-person to see a bank using Frontier Reconciliation that she made her decision. Frontier Reconciliation was the right solution to meet the bank's reconciliation challenges.
Client Profile
First Federal Bank is a community bank that was founded in the heart of North Florida in 1962 as First Federal Savings and Loan of Live Oak. Today, First Federal is a $2 billion-asset institution offering a full line of personal and business financial solutions, services and loans through full-service banking offices in Florida's Panhandle, North Central Florida and coastal South Carolina. In addition, First Federal has mortgage lending offices in Florida and across the Southeast and Midwest, and SBA and USDA lending offices throughout Florida and in multiple states. First Federal is a mutual savings bank and continues to receive a "5-Star, Superior" financial rating from BauerFinancial, Inc., of Coral Gables, FL.
We wanted a life outside accounting, and with Frontier Reconciliation, we got our lives back.
- Brooke Hand, SVP and Controller, First Federal Bank
Lower Risk, Higher Productivity
Frontier Reconciliation forms a complete picture of account reconciliation across the organization that makes exceptions instantly visible and reduces or eliminates manual intervention. It minimizes the risk of financial misstatements with transaction-level matching and a full audit trail, driving a faster and more accurate financial close.
With the help of Fiserv consultants during a five-week implementation, the bank set up all daily accounts for automated reconciliation on Frontier Reconciliation, including cash, ACH, ATM, Federal Reserve, daily loan, deposit and savings accounts. Files are imported from Prologue Financials.
"Reconciling the daily accounts helps facilitate a timely and accurate financial close," Hand said. "Now we can see the matches immediately and resolve exceptions much faster, in weeks instead of months."
The segregation of duties in Frontier Reconciliation means no opportunity for data manipulation. "The auditors like that. From an auditor's perspective, it's much better than spreadsheets," Hand added. Although the accounting department still has eight employees working on reconciliations, they enjoy the efficiencies created and split their time with more value-added responsibilities.
"We wanted a life outside accounting, and with Frontier Reconciliation, we got our lives back," Hand said.
What's Next for First Federal
Hand plans to bring in Fiserv consultants to perform an operational audit to find ways to improve efficiency, consistency and internal controls, reduce costs and automate more manual processes. For instance, Hand would like to increase the percentage of the balance sheet that is reconciled through Frontier Reconciliation. Also, Hand would like to add the securities portfolio for automated reconciliation.
"It's a great system. Overall it's been as mart decision to automate reconciliation, and we want to continue automating to recognize additional benefits," Hand said. "Frontier Reconciliation meets the bank's goal of more automation and less paper."
Frontier Reconciliation can help drive productivity while reducing risk:
More accurate data for use in financial close process
Increased operational efficiency and ability to meet regulatory requirements
Greater data visibility and exception detection with transaction-level matching and full audit trail
Capacity to process large volume of transactions per day on highly scalable platform
Ability to handle all transactions and account types
Resources
Frontier Reconciliation: Improve Operational Efficiency, Enable Compliance and Mitigate Risk
Frontier Reconciliation takes an enterprise approach to reconciliation and exception management, creating an optimal environment for effective risk management.
The Role of Automated Account Reconciliation in Fighting Internal Fraud
Internal fraud costs businesses trillions annually. Read the results of a recent study on internal fraud controls to learn which detection methods work best.
Transaction-Level Matching – The Key to Effective Reconciliation
With true transaction-level matching, you can see the numbers behind your financial statements and identify specifically where the exceptions are, which minimizes financial exposure.
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