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The insurance industry has developed a preoccupation with reconciliation. I understand why, but I think it's looking at the wrong problem.
Reconciliation, in its purest form, is simple. You sent me $20, I received $18, there's $2 outstanding. That's a math problem. Unpleasant at scale, but solvable. For years, the industry treated it as exactly that — a periodic, painful exercise you accepted once a quarter or once a year, gritted your teeth through, and moved on. It was burdensome, but it was manageable. People built workflows around it, they budgeted time for it, and they lived with it.
As real-time payments have entered the insurance value chain, the quarterly reconciliation model has become untenable. When data is moving in real time, you can't clean it up in batches. Problems that once sat quietly in a spreadsheet for three months now compound daily, and the mess arrives faster than any cleanup process can keep up with. Suddenly, reconciliation, which was always difficult, has become urgent.
The reconciliation problem was never really about reconciliation. It was always about data.
When you dig into why reconciliations are hard, the math is rarely the issue. The issue is what's sitting behind the numbers. Claims metadata entered differently by different TPAs. Policy information that doesn't travel consistently through the chain. Financial data flowing through one system while claims data sits in another, with no common language between them. You can build the most sophisticated reconciliation tool in the market, but if the underlying data is fragmented and inconsistent, you'll still be fighting exceptions. You'll just be fighting them faster.
This is the distinction that matters: reconciliation is a symptom, and market data fragmentation is the disease.
The real prize, and the harder problem to solve, is connecting financial data with claims data to give every participant in the chain a single coherent picture. Not just knowing that a payment was made, but understanding which policy it related to, which layer, which claim. That contextual richness is what turns a payment record into genuinely useful information, and right now, for most participants, that picture simply doesn't exist. The data lives in silos, owned by different teams, managed on different systems, and entered by different parties with different conventions.
Real-time processing hasn't created this problem. It's exposed it. And that's actually a useful thing, because a problem you can see is one you can start to solve.
The insurers who will move fastest through this aren't the ones who invest in better reconciliation tooling. They're the ones who recognise that the bottleneck is upstream, in the quality, consistency, and connectivity of the data that feeds everything else. Treat the disease rather than the symptom, and reconciliation starts to take care of itself.
