Many organizations treat their reconciliation and reporting as mere check-the-box activities, investing only the bare minimum to remain compliant. However, companies that deprioritize these critical back-office functions risk being caught unprepared when faced with a more stringent regulatory environment.
In a recent PaymentsJournal podcast,
Roger Binks, Chief Commercial Officer at Kani, and
James Wester, Co-Head of Payments at Javelin Strategy & Research, explored the current state of the back office, the challenges organizations face, and how businesses can modernize their reconciliation and reporting functions amid regulatory headwinds.
A Traceable and Consistent Baseline
Research from Kani found notable trends among payment leaders. Just over a quarter of respondents said their firms were using fully automated tools, while many still relied on spreadsheet-based solutions for this complex process.
Nearly two-thirds of respondents also reported frequent data errors during reconciliation—errors that are expected to become more expensive and time-consuming as compliance requirements increase.
“The regulatory environment is becoming way more prescriptive than it ever has been,” Binks said. “Reconciliation reporting outputs not only have to be consistent, but they have to be traceable. If you're having a manual process in there, the workarounds that you have to put in place to make that traceability consistent is really tough.”
“In the UK, the FCA is extending operational resilience requirements into payments,” he said. “What this means is daily reconciliations, real-time controls, and clearly documented processes are going to be mandatory. They're going to be the sort of baseline of everyone's business.”
As compliance tasks continue to grow, they add pressure to already strained operations. The report found that roughly 80% of respondents often miss reporting deadlines.
These difficulties will mount for organizations that don’t take steps to modernize.
“Things like reconciliation, reporting, compliance, these are things that we all talk about and we have for a long time,” Wester said. “We have talked about workarounds and band-aids and fixes and manual processes that are employed, while we also know that regulatory compliance and all of the things that that entails, it's only getting more complex.”
“It's a known issue, we all talk about it, and yet it continues to be something in 2025 that we are still talking about,” he said. “I'm almost sad about it. It's almost like, ‘When do we start fixing some of this stuff, especially when we know that regulation and compliance are not going to get any less complex in the future?’”
Saving 700 Hours
One reason manual processes and reporting issues have lingered is that they haven’t been a priority for many organizations.
“Whenever you see regulation or some type of mandate for the way a report must be submitted—or anything like that—a financial institution, a bank, or a business, they often look at what they must do and they work back from there,” Wester said. “It's almost as though they try to find the least efficient way to do it. To me, I think we look at it the wrong way.”
Instead of viewing compliance as a chore, organizations should recognize that the reporting process produces a critical output: data...
