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AutoRecon

Internal Demo

What is Reconciliation?

It is a process of checking the availability of the transactions that are routed through
different entities to complete the transactions

In an electronic financial transaction processing environment, transactions get logged at


various entities such as ATM/POS(channels), Switch (router),and Host(Core Banking
System) from different time zones .

The differences in the cut-over timings between host/switch and interchanges may not
allow for complete reconciliation on a business day's transactions.

In simple terms, Its a matching process b/w the entities for the transaction availability.
When ever any transaction happens, it will be routed thru different
entities(ATM,Switch,Interchange,Host..etc) and in case if your are using some other bank
ATM then other bank gives their money to you and will claim it from your Bank, from your
account.

Bank will match the transaction logs for all the entitles and arrive at a conclusion that
whether they need to pay other bank or not.

If the transactions are less then bank will do it manually, but for the past 10 years the
volume of transactions are increased abnormally, hence its a tedious job for banks to
match transaction manually.

Why is there a need for Reconciliation?

There are Millions of transactions happening on ATM/POS/Internet/Mobile channels daily

Searching manually is also prone to human errors

Hence there is a need to implement reconciliation for quick/Proactive resolution of Transaction


Disputes

All input sources extraction & reconciliation processes can be scheduled at night time, there
by saving the processing time, reports ready for the user in the morning to act on the
unmatched cases

Saves analysis time by identifying the reason for mismatch & listing the transactions causing
difference

Proactively identifying the excess cash to be refunded to customer/other Banks

Each transaction will be routed through different Entities to ensure successful transactions
Its a tedious job to verify the failed/unsuccessful/partial transactions from the millions of
transactions without using an application & searching through Millions of transactions
manually to identify the fate of transactions may not be practically feasible
It may cost more number of resources
It may be take more time
There is an abnormal increase of Transactions with the new trends in the internet
Banking/Mobile banking and Ecommerce transactions.

Models of Reconciliations
2 way reconciliation
3 way reconciliation
Many to Many Reconciliation (transaction amt, fee, surcharges to
GL tran amt, fee, surcharges)
1 to many Reconciliation(Payroll)
Many to 1 Reconciliation(Donations)

Types of Reconciliations
On Us Reconciliation
Issuer Reconciliation
Acquirer Reconciliation

On Us Reconciliations

SBI
ATM
SBI
Customer

SBI
Switch

SBI CBS
Host

Issuer Reconciliation for


ICICI bank
SBI
ATM
ICICI
Customer

SBI
Switch

Interchang
e

ICICI
Switch

ICICI CBS
Host

Acquirer Reconciliation for SBI


bank
SBI
ATM
ICICI
Customer

SBI
Switch

Interchang
e

ICICI
Switch

ICICI CBS
Host

2 Way Reconciliation
Interchange
Settlement File

Matched
Unmatched
Reports

Recon
Engine

CBS File

Settlement Entries
Adjustment Entries
Upload files

Bank Host

3 Way Reconciliation
Switch
Log File

CBS

Host Recon
Process

Matched
Unmatched

Interchange
Settlement File

Interchange
Recon Process

Unmatched
data

Reports

Settlement Entries
Adjustment Entries
Upload files

CBS

Basic Components of Reconciliation


Input File Data Extraction(Reading Transaction Logs)
Data Pre-Processing
Recon Rules
Recon Process
Recon Reports Generation
Force Match Options
Generate GL entries

Modules of Reconciliation
1. Host Reconciliation (Switch & CBS)
2. International Interchange Reconciliation (Switch & Interchange & CBS)
VISA Base II/SMS
MasterCard Maestro (MDS) On us/Off us
MasterCard Debit Un-embossed (MDU)
3. Domestic Interchange Reconciliation (Switch & Interchange & CBS)
4. Dispute Management
5. Chargeback Management
6. Cash Balance Reconciliation, GL Tally (Switch, Host, EJ, CRA)
7. Nostro Reconciliation
8. Bill Pay Reconciliation (Switch & Bill Pay Application)
9. Payment Gateway Reconciliation (Switch & Payment Gateway)
10.Merchant Acquiring Settled Maestro POS Reconciliation (Merchant Acquiring Application & MasterCard
Interchange)

Actions on Un Matched Entries/Force match


2 way Recon :
Transaction available in Source 1 not in Source 2
Transaction available in Source 2 but not in Source 1
3 Way Recon :
Source 1
(Switch)

Source 2
(Interchange..Visa..et
c)

Source 3 (CBS)

Actions

Suppress

Debit customer

Suppress

Credit Customer

Credit Customer

Debit Customer

Generation of GL entries

In the previous screen we have actions like Credit/Debit customer, these entries can
be generated from the Recon system by using Generate GL Entries, which will effect
Customer/Bank Account

What we will do after generating the GL files?

What is CBS Host?

What is the relation b/w CBS Host and GL Files?

Reports
File Extraction Reports

Withdrawal/Purchase Report
Balance enquiry Report
Unsuccessful Transactions Report
PIN change, Mini Stat.
Reversal trans Report
Summary Report

Matched Reports
Un Matched Reports
ATM Balancing Report
GL Balancing Report