Cross-Border Payments

Simplifying FX reconciliations for EMIs

Ross McGee
Ross McGee

EMIs have revolutionised the way that people can manage their money in different currencies; however, that doesn’t mean that the likes of cross-border transactions are now plain sailing. Instead, foreign exchange (FX) rates continue to fluctuate like stormy waves – always in movement and always unpredictable – making back-office operations such as reconciliation anything but simple.

Considering that all EMIs must engage in both internal and external reconciliations daily to meet FCA regulations and safeguard client funds, a resolution is therefore desperately needed for those who encounter the tricky variable of FX rates when reconciling transactions. In this blog, discover the solution ...

Challenges of FX reconciliations for EMIs

Whilst EMIs’ innovation is great for customers, to provide the services they promise and meet regulations, they are faced with the headache of reconciling client funds across different currencies. When attempted without the assistance of an automated platform to resolve EMI challenges this proves to be problematic for the following reasons:

  • Time-consuming – keeping up with the frequently changing FX rates requires constant vigilance and can be extremely time-consuming, diverting resources from other critical tasks.
  • Errors – manually updating FX rates for each transaction can lead to human errors, such as incorrect data entry, leading to inaccurate transaction values and reconciliation discrepancies.
  • Regulatory risks – inaccuracies in FX reconciliations can result in non-compliance with financial regulations, leading to potential fines and damage to reputation.

A path to global reconciliation domination

Despite the challenges which FX rates impose on reconciliation, it is something that EMIs have no choice but to do if they wish to stay compliant with regulations. As a result, to continue to with their multi-currency offerings without having to pool unreasonably large amounts of resource into FX reconciliations there is only one real answer – Aurum Solutions.

Here are some examples of how the Aurum next-gen reconciliation platform makes management of FX reconciliations easy:

  • Automatic FX rate updates – Aurum can automatically fetch and apply real-time or historical FX rates to transactions. This automation ensures that EMIs always use the most current and accurate rates for their reconciliations which are then automated in minutes via Aurum.
  • Seamless multi-currency reconciliation – with Aurum, transactions conducted in various currencies can be reconciled smoothly and accurately. The system automatically converts and reconciles values, ensuring that all transactions are correctly accounted for, regardless of currency fluctuations.
  • Enhanced accuracy and efficiency – by automating the FX reconciliation process, Aurum eliminates errors associated with manual data entry and calculations. This not only improves the accuracy of reconciliations but also enhances operational efficiency by freeing up resources to focus on other areas.
  • Compliance and reporting – Aurum Solutions’ platform is data agnostic. As a result, it ensures that all reconciliations, including those involving multiple currencies, are compliant with regulatory standards by generating detailed reports that provide a clear audit trail plus further insights.

Map out your FX reconciliation with Aurum

EMIs have revolutionised cross-border transactions and multi-currency management of funds, and with the world becoming increasingly interconnected, these sorts of international services will no doubt continue to become increasingly popular.

Unfortunately, high volumes of transactions, just like those which require FX rates, place strain on outdated back-office operations. Without assistance from automation, traversing FX reconciliations as they become more common will therefore prove reckless. Instead, EMIs that wish to cement their position as fintech innovators must futureproof their reconciliation processes.

Start your course to simplified FX reconciliation by booking your Aurum demo today.

Ross McGee
Ross McGee

Content and Community Marketing Manager

Author page

Ross McGee is a marketing manager at Aurum Solutions who deep dives into financial processes, technology, and best practices to share insights that help finance professionals of all levels maximise their potential.

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