Reconciliation Works Quietly Until It Starts Costing You Money

The contents of this blog are for general information purposes only and do not constitute legal advice. Association of Foreign Banks disclaims liability for actions taken based on the materials. Readers should consult their legal advisers.

Most days, reconciliation sits quietly in the background, it mostly works, and it only becomes interesting on the day it does not.

When Swift deferred the structured address migration, the reaction across most operations teams was relief, and that reaction tells you a great deal about how many plates a back office is spinning now. Case Management, structured addresses, payment purpose codes, Basel 3.1 and the day job are all competing for the same small group of people, so anything that is not visibly failing quite rightly gets left where it is. Reconciliation usually sits at the top of that list, on the entirely sensible grounds that it is not broken.

It is worth being clear about what the deferral actually gave you, because it was time rather than reprieve. Swift has been explicit that the decommissioning of unstructured addresses is being rescheduled rather than abandoned, with timing still under consultation, and structured and hybrid addresses already flow across the network today, so remediation can begin now without waiting for a date. What did not move is Case Management, where institutions must be able to receive camt.110 investigation requests from 12 June 2027 and must be sending and receiving through Case Management from November 2027.

The question worth asking is a slightly different one: what the working version of reconciliation costs you in hours, in people and in money, every week that it carries on being just good enough to ignore. Our research among 150 European banking IT leaders, half of them based here in the UK, suggests the answer is considerably more than most institutions have ever measured.

“If it is not broken, it does not get fixed. That is a reasonable rule right up until you work out what the not broken version is costing you.”

This is not a discussion about best practice. It is a short list of the things that catch banks out, written for the person who must answer when somebody asks where the money is.

1. Your team is spending more time fixing data than creating it

This is the finding that should give everyone pause. 65% of the banking IT leaders we surveyed say they spend more time repairing payment data than producing it, which means most institutions have quietly built an operating model where correction is the main activity rather than the exception.

That effort rarely appears as a line item anywhere. It shows up as people staying late, as a headcount request that is difficult to justify, and as the reason nobody has capacity for the 2027 programme. 51% already report rising operational costs linked to inefficiencies across payment operations, so for around half the market this has stopped being a hypothetical cost and started being a visible one.

2. Your breaks are not really reconciliation problems

Almost a third of the leaders we surveyed, 29%, say reconciliation mismatches typically take more than a day to resolve. What matters is why, and the three causes reported most often sit well upstream of the reconciliation team:

• Poor quality or incomplete data arriving from upstream systems.
• Breaks caused by multiple versions of the truth.
• Legacy systems that do not speak the same data language.

None of those are solved by reconciling more often or by adding a person to the morning review. They are solved earlier in the chain, usually through automation rather than through more effort, which is why throwing effort at the symptom tends to produce a process that is busier without being faster.

3. You probably cannot see the whole picture

71% of the leaders we surveyed admit they lack visibility across the full payment lifecycle, which makes it considerably harder to spot and fix an issue before it escalates into something a client or a correspondent notices first.

The automation picture underneath that is stark. Across ten core payment functions, an average of just 13% report full automation. Payment orchestration is the strongest at 23%, and liquidity and cash position monitoring is the weakest at 7%. So when treasury sets a buffer to cover uncertainty in the cash position, that buffer is very often sized against a manual process and a reconciliation cycle rather than against any deliberate commercial judgement. It is worth asking whoever sets yours what would have to be true for it to come down. The full breakdown across all ten functions is in Aqua Global’s Banking Modernisation Report, which is worth a look if you want to see where your own automation sits against the market.

4. Case Management makes all of this visible, and sooner than most teams think

The Swift Case Management mandate makes camt.110 and camt.111 messages the required mechanism for exceptions and investigations, and it arrives in two stages. From 12 June 2027 every institution must be able to receive camt.110 investigation requests, a milestone that was originally set for November 2026 and moved with the deferred Standards Release. From November 2027 the full mandate applies, so work that has been handled through free format messages, emails and telephone calls becomes structured, tracked and measurable, with response timelines your counterparty can see.

Here is the part most institutions are missing. A very large share of investigations begin life as a reconciliation break, so the quality of your reconciliation determines both how many investigations you must handle and how quickly you can close them. 75% of the leaders we surveyed believe upcoming regulatory changes will penalise institutions that continue to rely on manual workflows, and this is exactly the shape that penalty takes, because preparing for Case Management purely as a messaging change simply industrialises the reporting of a problem instead of reducing it.

5. The bill for doing nothing is rising, not flat

The reason the “if it ain’t broke” position weakens over time is that the cost of deferral compounds. 63% of the banking IT leaders we surveyed still depend on outdated messaging formats and systems that should already have been retired, and 72% believe legacy infrastructure will make future Swift changes harder and more expensive to implement.

That is the argument to take to your board, because it reframes the decision. Leaving reconciliation alone is not a decision to spend nothing. It is a decision to spend more later, on a shorter timeline, with the same small team.

In summary

Before the first mandate lands in June 2027, five things worth doing:

1. Work out how much of your team’s week goes on repairing data rather than producing it.
2. Trace your most common breaks upstream rather than reconciling them harder.
3. Ask what your liquidity buffer is really covering.
4. Treat Case Management readiness and reconciliation quality as one piece of work.
5. Price the cost of deferral properly, because it does not stay still.

The banks that look at this in 2026 will spend 2027 dealing with the mandate, and the ones that leave it will spend 2027 dealing with both.

The full findings, drawn from 150 European banking IT leaders including 75 UK based respondents, are available in Aqua Global’s Banking Modernisation Report, “From Intent to Execution”, which you can read here.

Authored by

Nick Fernando

Co-Founder and Director, Aqua Global

Nick co-founded Aqua Global in 1983 with his twin brother Mark, having started his career as a programmer on the IBIS banking system. Over forty-three years they have built the company into a financial messaging and transaction automation specialist serving banks in more than twenty-three countries, and they continue to work closely with clients on ISO 20022 and financial messaging strategy.

Content partner

For over 43 years, Aqua Global has been delivering a powerful suite of financial messaging and transaction automation solutions built for payments, treasury and securities processing. Trusted by leading banks in more than 23 countries, our Aquila orchestration and integration framework provides unmatched performance, control and scalability. The modular suite covers payments, securities processing, reconciliations, matching and reporting, helping financial institutions simplify complexity, reduce operational risk and accelerate change. Designed for the banks of today, with tomorrow in mind, Aqua Global enables confident transformation across the entire transaction lifecycle.

Visit the Aqua Global website to learn more