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Reconciliation is a knapsack problem

moderntreasury.com

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Re: Reconciliation is a knapsack problem

#21

Post by whatever1 »

waynesonfire wrote: post #17
whatever1 wrote: post #4

lol at ai for solving deterministic knapsacks. Just get yourself a solver. And if you wanna solve billion item sized problems hire an OR scientist to write a decomposed algo. Literally after 2 minutes of search: https://arxiv.org/pdf/2002.00352.pdf

You searching arxiv.org stood out to me. I wish I had better skills at searching academic papers for problems I'm trying to solve or that I'm just thinking about. I think just as there are some people that google better than others, I imagine a similar skill applies to academic papers. Anyone encounter this? How do I get better at it? I thought at first it was an accessibility problem, and perhaps it still is. In tha…

Unfortunately this only comes with practice and it only applies to a specific domain. A physicist cannot easily weed out computer science literature and vice versa.

In fact, there are identical problems that are solved by different communities and you would not know because they use completely different lingo. Math optimization/dynamic programming/reinforcement learning is one of these.

Many of the accomplished scientists just read papers from other domains and adapt them to their own domain making huge progress.

So yes I see tremendous value to what you describe. A Google translate for academic work that can translate between domain specific lingos and common language.

Re: Reconciliation is a knapsack problem

#22

Post by mtillman »

matharmin wrote: post #2

This feels like a marketing piece without any good content. The way it's described, it's not a knapsack problem at all. The knapsack problem is to maximize the total value of the items you fit into the container. In reconciliation, you presumably want to get the best matching between transactions, which is not defined here, and in any case is a completely different problem. Ignoring the knapsack comparison, the artic…

To your point, bank statement reconciliation (not the only kind of or even the most important type of financial reconciliation) is typically audited by scoring transactions against house financials which then buckets them into a few categories such as matched, no match, "FRAUD!", etc. Solutions to this use case (bank reco), often look more like recommendation engines as human auditors end up manually reviewing anything larger than a defined variance threshold. One area where M/L could make sense is to provide a high confidence suggestion around "FRAUD!" against a real-time stream of transaction data which I have personally worked on at a large bank-it was a long time ago (20 years) and the ROC curve wasn't impressive.

Disclaimer: OpenEnvoy provides real-time auditing & reconciliation solutions but in front of the ERP so we don't directly compete with MT.

Re: Reconciliation is a knapsack problem

#23

Post by munificent »

matharmin wrote: post #2

This feels like a marketing piece without any good content. The way it's described, it's not a knapsack problem at all. The knapsack problem is to maximize the total value of the items you fit into the container. In reconciliation, you presumably want to get the best matching between transactions, which is not defined here, and in any case is a completely different problem. Ignoring the knapsack comparison, the artic…

Agreed completely. This is a fluff marketing piece with enough algorithms lingo thrown in to sneak it onto the front page of HN.

Re: Reconciliation is a knapsack problem

#24

Post by [deleted] »

matharmin wrote: post #2

This feels like a marketing piece without any good content. The way it's described, it's not a knapsack problem at all. The knapsack problem is to maximize the total value of the items you fit into the container. In reconciliation, you presumably want to get the best matching between transactions, which is not defined here, and in any case is a completely different problem. Ignoring the knapsack comparison, the artic…

[deleted]

Re: Reconciliation is a knapsack problem

#25

Post by 3abiton »

leejo wrote: post #15

I'm head of processing development at PayProp[^1] where we've been automatically reconciling rental payments for two decades using the techniques described in the article - we just don't call it an AI or a LLM. Our tech saves letting agents huge amounts of time. We look at the data we have and if it's sufficient we can "automatically" reconcile it - i.e. suggest a match with 100% certainty that the user(s) can then c…

I'm confuses, reconcialiation is also used in Bayesian statistics. Is it the same context?

Re: Reconciliation is a knapsack problem

#26

Post by rowyourboat »

I don't understand the problem this solves. At least in my experience each transaction on the bank statement has a reference to a business transaction attached (usually an invoice number). The amount of money that just lands on the account without a reference is negligible in comparison and usually easily manually associated.

Re: Reconciliation is a knapsack problem

#29

Post by tmnstr85 »

This brings me right back to June of 2009, as the markets started to spoil and the derivative markets fells to shambles. A few hapless souls in Baltimore would be tasked with manning 2 standing 12 hour shifts for as many weeks as it would take to properly reconcile what could only be described as a tsunami of unreconciled data for a single large custody player in the sub-prime markets. It took about 4 months, and went through several phases of rebalance but we got it done. As I look across the landscape of LLM, the word "context" screams back at me. I think the processing power involved to make all the poor choices necessary to find the right choices and wonder how that could've been done without a teams of people thinking about the same problem from many perspectives.

Re: Reconciliation is a knapsack problem

#30

Post by mring33621 »

onionbagle wrote: post #9

Can anyone recommend a reconciliation application they've had a good experience with? My current work place rolled their own recon service. Is this the norm?

We're trying something called EZOPS for reconciliation, to replace home-grown stuff. I'm not directly involved so can't say if it's a success or not.
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