Reconciliation is only as good as the data behind it. And in payments? That data is fragmented, messy and constantly changing.
When transaction data is weighed down by disparate sources, inconsistent formats, manual enrichment and missing references, financial control becomes a firefighting exercise.
In our 2025 survey of UK payments businesses, 0% reported an error-free reconciliation process. That’s not a reconciliation problem—it’s a data management crisis in disguise. And it’s costing more than time; it’s impacting compliance, confidence and the bottom line.
In this blog, we’ll unpack the real cause of reconciliation inefficiencies, explore why data management is often the root issue and show how automated solutions help you to reclaim time, accuracy and control.
The hidden burden of bad data
For most finance teams, reconciliation isn’t the real problem. It’s the manual work required just to get to the starting line.
You’re chasing down missing fields, reformatting exports from processors and enriching incomplete data with context from other sources. And every source seems to have its own quirks—from mismatched timestamps to inconsistent identifiers and shifting column formats.
The upstream chaos consumes hours. In fact, the average UK payments business spends 3 hours on pre-reconciliation data preparation alone. Assuming daily reconciliation as the FCA expects, that’s upwards of 750 hours lost annually to cleaning up after broken data flows.
Why reconciliation in payments is uniquely painful
The ever-increasing variety of data sources and formats in payments makes reconciliation a challenge of scale. One day it’s a standard settlement file, next it’s a custom report with unexpected fields, structures or formats.
You’re dealing with:
- Dozens of processors and data sources, each with their own format
- Regulatory and scheme-specific reports like Mastercard QMR and Visa GOC
- Multi-currency flows across different banks, payment channels and geographies
- Data structures that change based on customer type, issuer/acquirer status or programme design
Reconciliation is a moving target as companies grow, shaped by new partners, geographies, products and compliance demands. That’s why generic tools (and even partially automated workflows) often fall short. They cant handle the complexity and variability of constantly evolving reconciliation needs.
Bad data, big risks
Inefficiency is frustrating. But the real danger is what it leads to.
When reconciliation data lacks structure or consistency, exceptions don’t just take longer to resolve—they become harder to detect in the first place. Breaks get buried and reporting accuracy takes a hit, creating risk that shows up later down the line.
If your reconciliation process is error-prone or hard to audit:
- Reports get delayed or rejected by regulators and card schemes
- Audit trails break down, leaving teams scrambling for version history
- Critical issues go unnoticed, resulting in fines or failed inspections
In our survey, 29% of companies reported compliance risk as a direct impact of reconciliation errors, 35% cited financial discrepancies and 30% said these issues had a negative effect on investment or growth.
A missed reporting deadline is a substantial compliance and reputational issue, often a symptom of an upstream reconciliation workflow that’s buckling under data complexity.
Why automation has to go upstream
Most reconciliation tools focus on the end product: a signed-off report, a matched transaction set, a tidy audit trail. But the biggest gains are at the start, not at the end.
That’s why tools like Kani’s automated reconciliation software are built not just to manage transactions but to clean, standardise and enrich every fragmented input before the reconciliation even begins. Because real transformation happens upstream.
This means:
- Automatically ingesting data from all sources, including processors, banks, card schemes and ledgers
- Standardising and enriching data based on pre-defined business rules
- Catching anomalies early, not after reports are late or inaccurate
- Ensuring that every step is traceable, auditable and repeatable
An effective reconciliation platform brings more than speed—it introduces stability and control. The entire reconciliation workflow becomes consistent, traceable and easier to audit, even under pressure.
Final thoughts
Reconciliation will always be a core part of payments. But the way it’s done and the role it plays is changing.
Payments companies can’t afford to waste hundreds of hours preparing reconciliation data. Yet many still are. The result is fighting fires with spreadsheets while risk and complexity mount.
When teams are freed from the grunt work of fixing bad data, they can focus on high-value tasks: investigating breaks, spotting patterns and delivering business intelligence that matters.
The solution isn’t just to “automate reconciliation.” Real improvements come from treating the reconciliation process as a data challenge—then designing automated workflows that reflect how payments actually work, with all the scale, complexity and reporting nuances that come with it.
Ready to see how Kani can take your reconciliations to the next level?
