Spreadsheet Risks in Banks

No other industry perhaps handles such large volumes of critical financial data more than the banking industry. For decades now, spreadsheets have become permanent fixtures in the front-line reporting tool sets of banks, providing organised information when and where needed.

But as banks enter into a period of heightened credit risks, elevated levels of fraud, and greater regulatory scrutiny, many are wondering if continued reliance on spreadsheets is a wise decision for banks today.

The downfall of Lehman Brothers which eventually led to its filing for Chapter 11 bankruptcy protection on September 15, 2008, served as a wake up call for many institutions across the globe to make a serious examination of their own risk management practices. But would these reforms include evaluating the security of user developed applications (UDAs), the most common of which are spreadsheets, and putting specific guidelines as to when they can – or cannot be – used?

Banks and Spreadsheet Use

Banks have been known to utilise spreadsheets systems for many critical functions because most personnel are well-acquainted with them, and the freedom of being able to develop customised reports without needing to consult with the IT department offers flexibility and convenience. In fact, more than having a way to do financial budgeting and analysing customer profitability, even loan officers and trade managers have become reliant on spreadsheets for risk management reporting and for making underwriting decisions.

But there are more than a few drawbacks to using spreadsheets for these tasks, and the sooner bank executives realise these, the sooner they can adopt better solutions.

General Limitations

Spreadsheets are far from being data base systems and yet more often than not, they are expected to act as such, with figures constantly added and formulas edited to produce the presumably right set of reports.

In addition, data integrity is always a cause for concern as most values in spreadsheets are entered as manual inputs. Even the mere misplacement of a comma or a negative sign, or an inadvertent ?edit? to a formula can also be a source of significant changes in the outcome.

Confidentiality risk is also another drawback of the use of spreadsheets in banks as these tools do not have adequate?access controls to limit access to only authorised individuals. Pertinent financial information that fall into the wrong hands can lead to a whole new set of problems including the possibility of fraud.

Risks in Trading

For trading transactions, spreadsheets can prove to be of immense use – but only for small market volumes. As trade volumes increase and the types vary, spreadsheets are no longer a viable solution and may likely become more of a hindrance, with calculations taking longer in the face of bigger transaction amounts and growing transaction data.

And in trading, there is always the need for rigorous computational functions. Computing for the Value at Risk (VaR) for large portfolios for instance, is simply way beyond the capabilities of spreadsheets. Banks that persist in using them are increasing the risk of loss on those portfolios. Or, they can be opening up?opportunities for fraud?as Allied Irish Bank (in the case of John Rusnak – $690 million) learned the hard way.

Risks in Underwriting

Bankers who use spreadsheets as their main source of information for underwriting procedures also face certain limitations. Loan transactions require that borrowers? financial data be centralised and easily accessible to risk officers and lending officers involved in making decisions. With spreadsheets, there is no simple and secure way of doing that. Information can be pulled from different sources – individual tax returns, corporate tax documents, partnership documents, audited financial statements – hence there is difficulty in verifying that these reports adhere to underwriting policies.

Spreadsheet control and monitoring

Financial institutions which are having difficulty weaning themselves from the convenience and simplicity that spreadsheets offer are looking for possible control solutions. Essentially, they want to find ways that allow them to continue using these UDAs and yet somehow eliminate the?spreadsheet risks?and limitations involved.

Still, the debate goes back and forth on whether adequate control measures can be implemented on spreadsheets so that that the risks are mitigated. Many services have come forward to herald innovative solutions for better spreadsheet management. But at the end of the day, there really is no guarantee that such solutions would suffice.

More Spreadsheet Blogs


Spreadsheet Risks in Banks


Top 10 Disadvantages of Spreadsheets


Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry


How Internal Auditors can win the War against Spreadsheet Fraud


Spreadsheet Reporting – No Room in your company in an age of Business Intelligence


Still looking for a Way to Consolidate Excel Spreadsheets?


Disadvantages of Spreadsheets


Spreadsheet woes – ill equipped for an Agile Business Environment


Spreadsheet Fraud


Spreadsheet Woes – Limited features for easy adoption of a control framework


Spreadsheet woes – Burden in SOX Compliance and other Regulations


Spreadsheet Risk Issues


Server Application Solutions – Don’t let Spreadsheets hold your Business back


Why Spreadsheets can send the pillars of Solvency II crashing down

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Fine-tuning your Operations and keeping our staff Happy with FieldElite

They are the engine that drives your operations, but are you really giving you value for your money? How much time is spent by your personnel on lengthy paperwork and record-keeping, as opposed to actually providing the service to your customers? Manual tasks create bottlenecks and slow your operations, which in turn affects service delivery and customer satisfaction. You want to reach more clients and boost your brand image, growing your market share and generating more revenue. Field Service Management (FSM) software comes in optimise the operations of your mobile workforce, cut down resource wastage, and enhance your productivity as a firm, by actually enabling your field staff to get more done, thus achieving their individual goals. In fact, according to a report published by Fortune Business Insights?, the global FSM market- which stood at $2.29 billion as recently as 2018, will have expanded to $7.27 billion by 2026. What does this mean for your employees, and how do they benefit from FieldElite?

  • Skipping the paperwork with end-to-end automation

Filing reports, keeping track of equipment used, working on the Excel sheets for multiple jobs on a daily basis, all through to the routing and billing- it can be a logistical nightmare. It’s not just about the hours spent poring through documents and typing away at calculators. Manual work exposes you to the risks of human error. Missing records, inaccurate assessments of the situation on the ground due to the overwhelming data streaming in, putting the head office staff under strain- it all hampers the productivity of the company. 

Take scheduling for instance. You have different employees, and various jobs that need their attention, at different locations. It can be a plumbing company whose clients have water filters that need to be repaired, gas boilers inspected, leaking pipes fixed, and others who need new installations to be set up. Assigning your personnel to the different situations will need to take into account the type of job, and the amount of time that it will require, aspects such as the location and the crew that is closest to it. At the head office you will want to keep tabs on the jobs that are in progress, pending, complete, those on hold, and even those that have been cancelled. Running all these through traditional manual processes is enough to drive you to the edge. What’s more, tasks that slip through your fingers amidst the confusion will result in negative feedback from your customers- which you don’t want hitting your brand.

With a field service job management software like FieldELite, you get to handle it all from one dashboard. Optimise your service delivery using the accurate scheduler, that allows you to account for the location of your employees, the status of the job- from the urgent ones like emergency tasks, to the normal duties such as routine maintenance, and low-priority tasks. The field service scheduling software comes with a real-time location feature that allows you to determine the employees closest to the client’s premises who will be appropriate for the job, map out the service areas and give you a birds-eye view of all the operations on the ground, while being updated with the progress of each specific task. Less time is spent travelling to- and from the central office, and more on actually tending to your client’s needs. You can even have situations where you can assign end-of-day tasks to employees who will be passing on that route on their way home.

  • Enhanced resource utilisation that promotes personal and professional development

Skill is key across the industries- from electrical services, solar panel installation, landscaping, home remodelling, pest control, plumbing, HVAC system maintenance, to construction and property management. For the job to be done appropriately and make your clients happy, you want to assign the task to an employee who is particularly proficient at it. This tends to be glimpsed over during manual scheduling since the personnel at the head office will be swamped with so many files, and will pick the first one that comes close to fitting the job description, leading to overlapping of roles. Sure, they may get it done, having seen their colleagues do it and even helping them out when they worked together before on similar projects- but will it be up to the required standard? On the other hand, the FSM allows you to ensure that you get the right technician for the task- who will be more motivated, boosting their performance.

What about accidents? Your employees want to feel safe as they go about their mandate. Many of the field service jobs are hazardous- such as electrical repair jobs, window cleaning tasks at high rise buildings, to elevator repair jobs where a slight glitch can lead to severe ramifications. Field service management software also comes in handy here, where the head office can be notified of any emergency the moment it occurs, and arrange for the necessary action to be taken immediately. That way, your employees will not feel neglected while they are out in the field, showing them that their safety is a priority to your business- which in turn increases their morale. 

  • Readily available knowledgebase and feedback system

When the employees have been assigned a specific job, they will require certain information about it. This includes the scope of the task, history of previous repairs or maintenance that was carried out, accompanying images if needed, risk assessment, any hazards or contaminants that they will need to prepare for, to notes left by technicians who had handled it. Having to keep checking their email, or picking up documents at the office for the day’s job and walking around with them all day as they tend to one customer after another, will slow things down, and not to mention frustrate them. However, the FSM system is directly accessible by the employees via app on their phones. The information needed for each specific task will thus be at their fingertips, speeding up the process and ensuring that they will be ready for each project being handled. 

While carrying out the job itself, the employees will use the very same app to update the system on how it is progressing, chat with the staff at the head office, update the inventory and even place orders for extra parts if necessary. Since mobile service management software apps like FieldElite also work in offline mode, the photos, reports and other entries that are made are collected by the app and saved on the device. Once a network connection is established, they are then updated to the central database- thus ensuring that the job can proceed regardless of the location. 

Once the job is completed, the customer input is also taken, registered in the system through their e-signature. A signoff comment included gives the customer the opportunity to indicate their experience with the job, and the feedback that they would like to provide. In case the job has not been completed, then the scheduling software kicks in, putting it in queue for another appointment to take care of the task, or resolve the issue that had caused it not to be completed the first time. The completed tasks head right to invoicing, which is also handled within the field service management platform, making it a seamless task for the head office staff.

Risk Assessment

Risk assessment is a vital component in BC (Business Continuity) planning. Through risk assessment, your company may determine what vulnerabilities your assets possess. Not only that, you’ll also be able to quantify the loss of value of each asset against a specific threat. That way, you can rank them so that assets that are most likely to cripple your business when say a specific disaster strikes can be given top priority.

However, a poorly implemented risk assessment may also cost you unnecessary expenditures. Many risk assessors are too enthusiastic in pointing out risks that, at the end of the assessment, they tend to over-appraise even those having practically zero probability of ever occurring.

We can assure you of a realistic assessment of your assets’ risks and propose cost-effective countermeasures. These are the things we can do:

  • Identify your unsafe practices and propose the best alternatives.
  • Perform qualitative risk assessment if you want fast results and lesser interruptions on your operations.
  • Perform quantitative risk assessment if you want the most accurate depiction of your risks and the corresponding justifiable costs of each.
  • Conduct frequency and consequence analysis to identify unforeseen harmful events and determine their effects to various components of your organisation and its surroundings.

We can also assist you with the following:

Project Management

In a cutthroat market, where the competition is constantly on the attack to break into your market share, implementing a project-based system can give your organisation the necessary tools to be more efficient and agile.

However, rapidly changing consumer demands, technologies and other factors make it ever more difficult to generate a strategic advantage from projects, let alone develop one. Also since a large organisation can easily end up having to manage multiple projects at the same time, the new management paradigm can appear too complex.

What your company really needs is the expertise that can guide you starting from conception and planning, down through procurement and execution in order to maximise whatever resources you have. Each move must be well thought out so that there are clear goals and objectives as well as methods to achieve them.

Programme Management

Are you running multiple projects pointing to an overall strategic direction? Then you’ll need more than just a “scaled-up” version of project management to make sure every component’s work effort is well coordinated to achieve your enterprise’s desired outcomes.

Through our expertise in programme management, we’ll work with your stakeholders, executives and clients to achieve the following:

  • Design a well-articulated management structure and clearly define decision-making roles & responsibilities – This will ensure decisions are made rapidly with zero to minimal overlapping issues and to promote a unified, well-synchronised advance towards the common objective.
  • Set objectives then make sure they are met by guiding your key personnel in coordinating activities across projects.
  • Design or utilise existing financial models such that they adhere to your enterprise’s financial policies.
  • Develop procedures for reporting expenditures specific to the programme.
  • Establish the programme infrastructure, including
    • The appropriate technical environment and tools (e.g. hardware, software, communication, and other IT-related items)
    • IT staff and administrators
  • Evaluate your enterprise’s current IT architecture to determine whether it will suffice to achieve your objectives. If it doesn’t, propose options you can take to meet what is required.
  • Plan out activities that should take place in different levels in the organisation.
  • Implement a periodic review of the programme progress as well as of interim results to ensure everything is aligned with the strategic outcome.

Programme and Project Reviews

Whether we’ve helped you set up your programme or you did it on your own, time will come when you’ll need to know whether everything is going as planned. If it appears like the entire programme is going smoothly, chances are, something’s going awfully wrong somewhere. Remember, even the most well-planned projects and programmes are still under the mercy of unforeseen variables.

We’ve got highly specialised reviews for either projects or an entire programme. We’ll be able to provide you answers to questions like:

  • Are all projects aligned with the programme’s intended direction?
  • Are the people working on your projects as focused with the business rationale as they have been with meeting deadlines and utilising resources?
  • Where are your risks and exposures? How can they be remedied?
  • Is the project viable at all?

We understand how your staff would want to function normally as quickly as possible. Rest assured, our programme and project reviews are conducted swiftly and efficiently so that both interruptions and oversights are brought to a minimum.

After we’re done, you can expect a detailed quantitative assessment of your programme and/or projects’ status.

Basically, we’re not here to find mistakes; we’re here to help you find ways to correct them. If a project rescue is required, we’ll be the first to lend a hand.

Project Rescue

Believe it or not, many of our clients approached us not before or during their project’s planning stages. But rather, after having gone through sloppy execution, when they end up losing control. In other words, we’re usually at the receiving end of the distress signal, after they’ve punched the panic button.

While obviously this isn’t the ideal time to seek the aid of any expert because it means you’ve incurred unnecessary losses already, all is not yet lost. If the appropriate remedial actions are taken in a timely manner, you can still achieve highly acceptable end results.

In fact, in most of our experiences with project rescue operations, we’ve been able to put projects back on track – just the way the planners wanted them to be. We’ll also help you devise airtight strategies to prevent your project from going astray again.

At the end of our project rescue,

  • You’ll regain complete control
  • Milestones will be reached as planned
  • Requirements will be accomplished, and
  • The project will be realigned with ideal business directions

Project Governance Processes

Constructing a firm underlying structure is essential in any organisation. So before we’ll institute project management, we’ll do the following first.

  • Set up a PMO or Project Management Office to ensure, among others, that
    • Utilisation of facilities, budgets, technical support and other resources will be well coordinated
    • Work products can be tracked and reviewed
    • Issues regarding methodology and processes will be given appropriate attention
    • Training can be organised
    • Project management discipline be instilled in the IT department
  • Establish a steering committee to oversee the implementation of IT and business strategies
  • Fill up slots for a project manager, IT executive and a business sponsor and define the roles of each
  • Infuse project management practices to all affected units of the enterprise

Establishing PMOs, steering committees and other management structures is the easy part. Many organisations spend so much in order to create the structures related to project management, only to find out later that the effort has been all for naught. That’s why we won’t end there. Our objectives will therefore include the following:

  • To plant and cultivate an environment appreciative of project governance i.e. one that does not project it as just a bunch of bureaucratic processes and protocols.
  • To establish an organisational culture that starts at the top.
  • To make everyone involved understand that the power of project governance still lies in the hands of those who will ultimately implement it.

A project-driven enterprise is never propelled by a single project. Since multiple projects require a more complex governing structure, you’ll need to understand the intricacies of programme management.

Ready to work with Denizon?

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