Growing Bank Goes Paperless With Automated Reconciliation and Certification
Northway Bank found itself trapped in a paper-filled and unproductive reconciliation process that took too much time and offered little visibility into the numbers. With Frontier™ Reconciliation from Fiserv, Northway Bank accelerated the reconciliation process by 60 to 75 percent, with full audit trails.
Challenge
Daily reconciliations were taking 12-15 hours each day to complete, and quarterly reconciliations involved 1,000 pieces of paper and time-consuming reviews. Across the organization, staff relied on spreadsheets to balance reconciliations – none of which were standardized or centrally located.
Solution
Northway Bank chose Frontier Reconciliation to reconcile 100 percent of accounts on a single platform. The bank also deployed Frontier Reconciliation: Account Certification to manage the review and approval process for reconciliations.
Proof Points
The staff at Northway Bank was able to reduce reconciliation time by 60–75 percent, reconciling 100 percent of accounts on a single platform. Auto-matching accelerated reconciliation and freed staff to focus on out-of-balance items and higher-value tasks. Certifications that once took 11 days to manually review became automated and "check-as-you-go." Paper printouts were eliminated.
Reconciliation was draining productivity and confidence in data accuracy at Northway Bank. For daily reconciliations, three people using Excel spreadsheets were dedicating a total of 12-15 hours every day to manually reconcile transactions for the 16-branch bank.
"It was a nightmare," said Susan Goupil, the bank's First Vice President and Controller (now retired). "There had to be a better way. So we started looking for an automated solution."
After reviewing other options, Goupil chose Frontier Reconciliation because it was the most comprehensive solution and it offered account certification. "How we did reconciliations always bothered me," said Goupil, who had been with the bank for 31 years. "When I saw Frontier Reconciliation, I said, 'This is it.' It's been wonderful."
Frontier Reconciliation forms a complete picture of account reconciliation across the organization that makes exceptions instantly visible and reduces the need for 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. "I wanted every single reconciliation in one place with audit trails," Goupil said.
Client Profile
Northway Bank's heritage reaches back more than a century, when two community banks opened to serve individuals, families and businesses in New Hampshire. Today, Northway Bank is one of the largest independent commercial banks in the region, a preferred Small Business Administration lender, and a leading home lender. It serves individuals, small businesses and commercial customers through 16 branches and two loan production offices, and holds $925 million in assets.
Moving From Manual to Automated
Prior to Frontier Reconciliation, monthly and quarterly reconciliations and audits were cumbersome. Reconciliations were done in Excel spreadsheets and sent to the accounting department from departments across the organization.
During certification, it took 10 days for senior accounting staff to review documentation and another full day for the controller to complete reviews. More than 1,000 printed Excel report pages were divided into piles and sorted for a full day to prepare for auditors.
Accounting staff had to regularly pull reports from the bank's account processing platform, which was time-consuming and followed by hours of manual matching. Sometimes staff from other departments would customize the Excel spreadsheet templates or change formulas to reconcile the data. In addition, spreadsheets were printed and stored in different locations across the bank.
With help from a Fiserv consultant, Northway Bank implemented Frontier Reconciliation with three specialty reconciliations: Federal Reserve accounts, in-process accounts and sub-ledger.
"The consultant got us started. That helped the implementation go smoothly," Goupil said.
Paperless Reconciliations and More Productive Staff
Frontier Reconciliation automated matching, so only out-of-balance items had to be pulled from the bank's account processing platform and researched. As a result, the time commitment for daily reconciliation dropped significantly.
"Our employee hours spent on reconciliation went from 12-15 hours a day to 4-5 hours a day, a 60 to 75 percent decrease," Goupil said.
Reconciliations that were previously performed in the field became centralized and automated. "Reconciliations done in the field made me uncomfortable. We pulled them all into accounting," said Goupil. "Now 100 percent of accounts are reconciled in Frontier Reconciliation."
In Frontier Reconciliation, 48 balance pools are reconciled daily, representing 125 general ledger accounts. An additional 137 balance pools are reconciled for the rest of the company (180 individual accounts).
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
Our employee hours spent on reconciliation went from 12–15 hours a day to 4–5 hours a day, a 60 to 75 percent decrease.
– Susan Goupil, first vice president and controller (retired), Northway Bank
Since manual manipulations aren't allowed to make items balance, reconciliations are consistent and the management team has greater confidence in the numbers. "Management loves it," Goupil added.
Auditing processes also improved. Previously, "before the auditors came in, we had to take 1,000 pieces of paper and divide it into categories," Goupil said. After, Goupil could give auditors direct access to Frontier Reconciliation to review and print whatever they need. "We've had fewer questions from examiners and auditors. We pass with flying colors."
Strong internal controls also support Northway Bank with risk management and fraud deterrence as it grows into a billion-dollar bank.
Expanding the Impact
The bank uses auto certification for the first-level review and then reconciliations are sent to other staff members, with the controller completing the final certification. Goupil said, "Previously, it took us about 11 days to manually prepare and review reconciliations for certification. Now, general ledger accounts can be checked as they go."
Because Frontier Reconciliation is intuitive, training and scaling have been simple. Other teams have been given access to the solution so they can quickly clear out-of-balances. "They're not worried about getting reconciliations done. They're focused on doing their jobs," Goupil said.
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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