Reconciliation and Exception Management

by Axel Pierron,  Anshuman Jaswal, PhD, September 14, 2010
Vendor Reviews
Global, Asia-Pacific, EMEA, Latin America, North America


IT spending on reconciliation exception management solutions is expected to reach US$700 million in 2010, of which US$360 million will go to third party software vendors, US$90 million will be spent on specialized providers, between US$200 and $250 million will be captured by external resources, and around US$150 million will be allocated to maintenance and upgrade of existing solutions.

In this report, Reconciliation and Exception Management, Celent examines the growth and evolution of reconciliation and exception management solutions in recent years. The report considers the various issues and challenges that have emerged and the implications for the industry.

Looking at the spending by region and segment, North America and Europe and Tier I and II banks and asset managers dominate spending. Diversified banks in Europe and North America, many forged by mergers, have a higher propensity to seek outside solutions, while Asian banks prefer homegrown systems. North America comprises the largest portion at 46%, while Europe comprises 43% and APAC is 11%. Corresponding 2010 spending levels are estimated to be US$325 million for North America, $300 million for Europe, and $75 million for Asia-Pacific.

“Reconciliation engines are increasingly becoming more capable of handling new types of OTC derivatives, and are reaching out to become workflow management solutions through incremental upgrades to their exception management tools,” says Anshuman Jaswal, Celent Senior Analyst and coauthor of the report.

“Vendor functionality is fairly undifferentiated, but customer preferences are for smart, rule-driven reconciliation engines with a high degree of flexibility and the ability to customize,” says Axel Pierron, Celent Senior Vice President and coauthor of the report. “Exception management is viewed as a core part of any solution.”

Growth in collateralized OTC derivatives transactions has meant that reconciliations have to evolve accordingly, and this report discusses the drivers of and challenges of this development. It also looks at the possible benefits of three-way reconciliations and shared reconciliation services.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary




Market Size and Growth



Market Context



Global Reconciliations and Exception Management Systems Spending


Market Trends and Drivers



Key Market Trends



Main Drivers of Market Growth



Barriers to Market Growth


Reconciliation and Collateralization








Vendor Views and Positioning



Reconciliation Technology




Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


Sign in to download reports and access personalized information