Banks are managing to reduce exception rates in transaction processing, and so enjoying a fall of nearly a third in repair costs since 2002. Or so says a SunGard survey of 500 banks around the world.
The estimated cost of exceptions has fallen almost 30% since 2002, says the SunGard survey. But respondents agreed that exceptions still consume 18% of profits, a significant drop from the 25% recorded in the same survey last year, but still equivalent to nearly a fifth of net revenue.
However, increasing automation meant over two in three (69%) respondents expect exception rates to continue to decline over the next two years. Survey respondents also concurred that more exceptions are occurring pre-settlement (55%) than post-settlement (45%), highlighting the need for solutions that can detect exceptions early in the transaction lifecycle.
SunGard says the survey findings “clearly show progress towards improved exception management,” with falls in the cost of exceptions, and the pace of cost and risk reduction accelerating. Unsurprisingly, the firm also thinks the falls are due mainly to the adoption of exception management technology of the kind it supplies.
“Findings from this year’s annual research series reinforce the clear benefits of automation in the industry,” says Matt Mandalinci, president of SunGard eProcess Intelligence. “Respondents attribute the reduction in exception costs to a prioritisation of operational risk by top management, to better tools for analysis of the cause of exceptions, and to the implementation of applications that automate exception management.”