In 2014, The Wall Street Journal published a landmark article that not only captured the financial data challenges of its time, but also predicted many of the issues that have since been amplified by the proliferation of digital tools and the rise of AI.
The piece, authored by Mark Shilling and Steven Ehrenhalt, tackled a persistent challenge in financial services: the convoluted layers of technology and data processing that separate source systems from finance teams, creating what they termed "factories" of duplicative processing and inefficiency.
Key Takeaways
- Finance “Factories” Breed Inefficiency. Siloed systems require endless reconciliation, turning finance teams into “human middleware” instead of strategists.
- Break Points Multiply With Every Transfer. Each data move creates inconsistencies that demand costly oversight driving up costs in tight-margin environments.
- Integrated Architecture Protects Data Integrity. The solution is an integrated operational architecture with granular subledger data that links financial information directly to underlying business events, ensuring accuracy and consistency.
- Implementation Demands a Phased Approach. Start with standardized sourcing and reconciliation first, then scale by business priority—no need to “boil the ocean.”
- Finray Delivers Deloitte’s Vision. Finray’s integrated platform with a prebuilt Common Data Model and automated reconciliation eliminates “factories” and frees finance for strategy.
The Problem: Break Points & "Human Middleware"
Deloitte's analysis identified a fundamental issue plaguing many financial institutions. Despite significant investments in financial, management, and risk accounting platforms, organizations struggle to maintain data quality due to weaknesses in their IT and operational infrastructure. The root cause? Break points一inconsistent data standards, black box architecture, varying levels of data granularity, and unclear organizational boundaries一that emerge every time data moves from one finance repository to another.
These break points force organizations to create overlapping systems and processes that require continuous monitoring and reconciliation. As Ehrenhalt noted in the article, this duplication drives up key cost ratios in an already low-margin environment and frustrates finance staff who become "human middleware," spending more time on operational management and transaction processing at the expense of value-added analysis.
Deloitte's Vision: Integrated Architecture & Converged Subledger Data
The Deloitte team proposed a compelling alternative: moving to an integrated operational architecture with granular subledger data for straight-through processing, analytics, and reporting. This approach, as Shilling explained, strengthens "the integrity and value of financial information by preserving its connection to underlying core business events and transactions."
Their recommended architecture included five key attributes: a modular, service-oriented approach to data acquisition; a common accounting and reconciliation engine; a common financial data model; master data management tools and processes; and a target operating model that enables finance to shift focus toward strategic management.
"Finray provides the integrated operational architecture that Deloitte described as essential for maintaining data quality and reducing inefficiency."
Finray: Bringing the Vision to Reality
This is precisely where Finray comes into play. Finray is a financial operations platform that embodies the principles Deloitte outlined. Built by financial services pros with extensive experience in banking and capital markets, Finray provides the integrated operational architecture that Deloitte described as essential for maintaining data quality and reducing inefficiency.
Rather than requiring finance teams to navigate multiple systems and serve as "human middleware," Finray uses a prebuilt Common Data Model to streamline reporting and compliance. The platform focuses on automated reconciliation, compliance controls, and real-time visibility—eliminating the break points and "factories" that Deloitte identified as the core problem.
The Path Forward
As Ehrenhalt observed in the article, establishing a common data-sourcing environment for straight-through processing can seem "amorphous and intimidating." However, when CFOs consider the cost-benefit of having an agile finance function capable of addressing changing conditions and introducing new products, the importance becomes clear.
Finray offers financial services organizations—broker-dealers, banks, and other institutions—a practical path to achieving the integrated architecture Deloitte envisioned, with clean, trusted, and reconciled data that enables finance teams to focus on strategic analysis rather than reconciliation work. We invite you to discover how Finray can transform your financial operations today.
Read the full Deloitte article: Financial Services: How Subledger Accounting Can Improve Data Quality.
Or, if you're ready to eliminate finance “factories” and achieve the integrated architecture Deloitte envisioned, book a demo with Finray today.
