Exception Management

Exception management is the process of identifying, tracking, and resolving irregularities or deviations from standard workflows in financial and compliance operations. Exceptions often arise when a transaction, document, or customer record does not meet predefined rules or risk thresholds. Examples include mismatched KYC data, incomplete documentation, unusual transaction patterns, or system errors that block straight-through processing.For banks, fintechs, payment processors, and regulators, exception management is critical to maintaining compliance, operational efficiency, and customer trust. Without proper handling, exceptions can lead to delays, financial loss, or regulatory breaches. Modern systems use automated workflows, case management tools, and AI-driven analytics to categorize exceptions, assign ownership, and resolve them efficiently. By centralizing exception handling, organizations reduce manual effort, ensure auditability, and strengthen oversight, turning exceptions into actionable insights rather than bottlenecks.