Sathish N, Deputy CPO FSS
Digital payment mechanisms such as credit, debit and prepaid cards, ATMs, and mobile transactions, have made combating the increased complexity of reconciliations a top priority for banks. The entire process of reconciliation has historically been a manual or, at best, a partially automated undertaking. As a result, supporting new payment classes and file formats, managing growing transaction volumes, and various data-source systems has become a daunting task. To improve the banks’ payment close cycle’s effectiveness, reduce the operational risks—including exceptions and dispute volumes—they need a system that can cost-efficiently scale to address evolving market demands. It would require a system that can handle everything, from facilitating multi-party reconciliations to onboarding reconciliations as quickly as possible. As a leader in payments technology and transaction processing, FSS(Financial Software and Systems) successfully caters to these needs through its Smart ReconSuite. As a trusted B2B brand that powers payments globally, FSS manages over 27,000 ATMs for 30+ banks, issues 800 million cards and reconciles over 1B transactions per month.
Through its reconciliation Suite, FSS offers its highly configurable Smart Recon platform to onboard new reconciliations and automate end-to-end operations across payment channels. “We offer a flexible, high-performance reconciliation platform which acts as a single system for reconciling all digital payments,” says Sathish N, Dy CP0, Software Products at FSS. The platform supports not just on-us, off-us, and remote on-us (us-on) transactions and all typical file formats made available by interchanges. It is a highly configurable application, which can configure any form of data and perform the reconciliation for the concerned transaction and produce the output, irrespective of the input file, recon rules, and output file format, whether it be binary, XML, or more.
Aimed at improving the scalability and efficiency of financial institutions’ reconciliation operations spanning administrative management and data integration, and transactional matching, the platform also handles complex multi-party reconciliations. It supports multiple payment classes, multi-institution, multi-currency, and has a dynamic and customizable reporting engine for critical operational insights. The platform effectively identifies and provisions exceptions and invariably improves reconciliation match rates for straight-through processing. Apart from being a cloud-ready architecture, available on Oracle Cloud, the platform is PCIDSS3.2 compliant and offers a comprehensive security framework with PA DSS 3.2 certification, which ensures the enhanced security in the payment domain.
We not only bring in automation to increase the productivity of tier-1 banks, ensure scalability in their operations, but also improve the productivity of the banks and lower the dispute volumes in order to increase customer satisfaction
Moreover, the platform offers integrated general ledger (GL) reconciliation and cross-verification. “Whatever GL has been maintained in the core banking, we maintain that in the system. We also do a tally till the opening and the closing with all the debits and the credits coming in the GL,” says Sathish N.
Unlike the traditional transaction settlement method, which involves manual processes, FSS utilizes an AI/ML-based framework. It helps banks initiate settlement, auto scan and highlight the new component, then configures it using GUI, and ultimately shares the settlement report. This end-to-end approach results in an 80 percent reduction in time and creates significant productivity savings and optimization of reconciliation-based business processes. Additionally, FSS offers end-to-end dispute management with its dispute and chargeback management module, an effective workflow management system for managing the complete lifecycle of the dispute. “We not only bring in automation to increase the productivity of banks of all sizes, and ensure scalability in their operations, but also improve the productivity of the banks and lower the dispute volumes in order to increase customer satisfaction,” asserts Sathish N.
With its 29 years of experience in the payment domain, FSS has become a preferred and trusted brand known for serving its broad customer base that includes multinational banks, payment processors, and telecom operators to wallet companies, and to successfully meet their unique reconciliation needs. The company has been far ahead of its competitors when it comes to reducing time, cost, and hassles of reconciling. For instance, India’s largest public sector bank required a solution to reconcile the fees charged by the interchanges with the actual fees on transactions being performed at the bank. The criterion for winning the contract was to reconcile around 600 million transitions in four hours. FSS was the only vendor, out of the five, which was able to reconcile 600 million transitions in just three hours and 56 minutes and thereby awarded the contract.
For large scale projects entailing amalgamation between multiple banks FSS engages with big four consulting organizations to advise customers on the migration process For instance, post-amalgamation of three banks in India, the anchor bank preferred to retain FSS Smart Recon due to the critical advisory role played by FSS and performance and scalability of the solution as well as assured quality of service provided by the FSS Managed Services teams.
The fees model for interchanges has helped the bank to successfully calculate the fees charged by interchanges for every transaction made. For instance, a large public sector bank, required a solution to reconcile the fees charged by the interchanges with the actual fees on transactions being performed at the bank. They needed to verify that the charges were legitimate and as per actual transactions undertaken by the bank’s customers for its services.
The company discovered that additional payouts approximating $57,360 were being made by the bank. These charges were discontinued leading to direct savings to its bottom line. Today, SBI uses FSS Reconciliation Suite as the end to end reconciliation solution for its customer base of over 450M million debit cardholders and saves millions in interchange and settlement fees.
FSS also works with neo banks including India Post Payments Bank, Airtel Payments Bank and a wallet service operated by India’s leading conglomerate to improve efficiency of back-office operations. Some of the new channels such as mWallets, IMPS and UPI are high-volume systems and have multiple settlement cycles in a single day. At some of these locations, FSS has gone live in 12 weeks and has successfully scaled to process growing transaction volumes.
Looking ahead, the aspect of being a pure-play payments company with a diversified portfolio of software products, hosted payment services, and software solutions anchors FSS towards a robust roadmap. With its strong client base, the company is well placed in India, the Middle East, and the APAC region. Currently, FSS is working with specific key processors in the Middle East and helping them out with their reconciliation operations.
FSS has evolved its product over the years. With its domain expertise and extensive global experience in managing reconciliation products, FSS aims to continue addressing the current market demands effectively. “We’re aware that the world is moving towards cloud-native, self-optimizing reconciliation systems embedded with sophisticated AI and ML-based framework for transaction settlement, and we are gearing ourselves towards supporting customers make this transition,” states Sathish N.