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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Why integrating your Field Service Management with IoT Applications makes sense

Your customers want a smooth experience when hiring your services. Whether there are pests that have run amok in their homes and you have been called in to exterminate them, there is a leak in the pipes and your plumbing repair business is the go-to for repairs, you’re in charge of a cleaning business with clients spanning across the residential and commercial niches, or even a locksmith making new installations and providing aftercare for their clients ? it is vital to make the process as hassle-free as possible for your customer. The priority is getting the job done in time, and to quality standards. On the other hand, your mobile workers need access to complete and accurate data to approach the task more proactively, get it done right, and increase the rate of first-time fixes.

When you have multiple clients and a huge workforce, things can get messy with all the paperwork involved. Preparing documents and reports, keying in the data, keeping track of your mobile employees, following up on current jobs and scheduling new appointments ? the workload can put a strain on your staff. Field service scheduling software like FieldElite come in to keep your central office staff abreast with all customer details, sending alerts when new issues arise. These are then relayed to the appropriate technician for the situation to be taken care of at the earliest possible time ? directing the right employee to the customer based on the skill-set availability and location. While field service job management software, by itself, is a powerful solution, you can crank things up a notch by having a system that integrates IoT into its operations.

Powering Field Service Scheduling Software Systems With IoT

FSM gives maintenance firms, distributors, manufacturers and other service businesses an interactive platform that optimises the workflow. From the customers booking maintenance work, office staff tracking operations right from their desk, workers interacting with it while on-ground through the mobile app, to the billing and invoicing ? it is all handled through the same system. IoT applications can boost this becoming a critical tool to show the field managers about the precise locations where attention is needed, for accurate worker and job scheduling and improved customer satisfaction. What if you could also have features like auto-scheduling coming on board? Let’s delve deeper into what it means for your FSM system.

Benefits Of Using Service Management Software With IoT Solutions

Its impact of IoT on field management is seen in the transformation of maintenance data into proactive service actions. Research by Gartner shows that in 2020 there will be over 20 billion connected devices, making the reach of IoT really vast. This will fuel the field management industry, unlocking more potential with the mobile workers interacting in real-time with their equipment and headquarters. This speeds up response time to service requests and transforms interoperability across the different devices.

???????? All-round access

The interaction with IoT benefits the technicians, managers, and customers themselves. For instance, while the worker on ground interacts with the FieldElite mobile app, the office staff at headquarters will be engaging them via browser on their smart devices, and even the client gets access to the system through the customer portal.

???????? Linking your different business operations

It doesn’t stop there. Integrating the mobile service management software to the IoT facilitates inventory management, automobile tracking, and even automates accounting, invoicing, and other internal processes of the business, giving you more visibility over your field assets and operations. Here, the sensors that have been enabled in the network will notify you of damaged equipment, and go further to route and dispatch the technician who is most suited to go on-site and repair it.

???????? Nip things in the bud ? A proactive approach

Updates from sensors on the remote equipment are sent over a dedicated network. This is intelligently interpreted by the IoT platform to decide the next course of action, depending on a predefined set of rules. This course of action can be assigning and dispatching the technician through the FieldElite app to fix the equipment before permanent damage occurs. This whole process is automatic, shifting the company from a reactive mode of operations to a proactive and preventative model, resulting in better utilisation of assets.

???????? Minimise time wastage

Less time is spent going checking for flaws in the systems. Take management at a wastewater treatment plant for instance. Simply place IoT sensors on the different pumps, mortars and valves to give you this data. In case of leaks or damage, the appropriate operator is alerted, taking away the need for manual monitoring. Monitoring is done remotely. Hazardous situations such as in the oil and gas industry where workers are faced with issues like flare stacks are handled better, where the IoT sensors minimise downtime and ensure that only necessary visits to the plat equipment are done.

???????? Interactions at the palm of your hand

The field service workers are also equipped with effective communications through aspects like the chat feature on the mobile app, and reporting abilities where they can make notes, take photos and relay this to the headquarters during the course of the job. Information on the system is readily available to the customer and future technicians who will be handling jobs at the facility.

How does the FSM work with other systems? FieldElite’s core role is to manage the mobile workforce. How do you keep track of the sensors of the different equipment, in order to know when maintenance is needed?

Enter ecoVaro: IoT In Energy Management

The 2018-2025 Global Building Energy Management System Analysis and Forecast showed energy consumption in residential buildings accounts for close to 40% of the world’s energy consumption.? Commercial buildings like shopping malls, hospitals, retail stores and hotels take 30%. IoT tools aid in collecting and analysing the real-time data consumption in these falsities, to improve maintenance and reduce down times. It’s a holistic view that is achieved through a network of smart devices monitoring the ventilation, humidity, air-conditioning and lighting systems.

Home automation tools like smart thermostats and bulbs are already becoming popular. Here, they bring savings to the consumers without them having to use up much effort. For broader energy management, these systems will include units like sensors, controls, meters, data analytics tools, and user-friendly applications that the consumers access all this from. It cuts across the board, from households and commercial establishments, to utility firms and government bodies keen on effectively monitoring and managing their energy resources. Industrial and commercial users need data analytics tools to maximise their productivity and reduce costs, while residents in households want to reduce their monthly bills and take a more proactive role in their energy management.

From Smart Devices To Accurate Loggers

The first step in saving energy is cutting down wastage. Smart light, humidity, temperature and air conditioning controls come in to maintain optimal indoor conditions. Lighting units, smart thermostats, sensor-based HVAC control systems are part of the IoT, taking centre stage in automatically maintaining the perfect indoor environment that will keep the building?s energy use at optimum levels. They have been designed with different sensors that check the humidity, light, motion and even CO2 levels, dynamically adjusting the conditions in the facility. Here, you have situations like smart lights dimming when there is more daylight getting into the room, and then automatically turning off when people leave the room. The smart thermostats can precool the indoor space before the day gets warmer, so that during that scorching midday sun there will be less energy spent by the HVCA to bring down the heat levels.

The whole set up ? from the LED lights adjusting to user preferences and routines, learning thermostats that reduce consumption during peak load times, sensors and data analytics that give the user more control over their consumption, creates a smart energy infrastructure, be it in homes or industrial spaces, from retail stores and factories, to entire cities. This is all geared at cutting down energy costs, with the systems automatically adjusting the building?s lighting, temperature and ventilation, to reduce the energy consumption without compromising the comfort of the building?s occupants. LEED bulbs already record 20% lower maintenance costs than the typical commercial buildings.

Adopting IoT Applications For Your EMS System

How can you take advantage of this? With the EMS loggers, you monitor your facility’s consummation in real-time. Platforms like ecoVaro enable both the utility companies and end-users to access this data. The utility firms will be in a position to tailor the power supply in response to changing demand and also adjust their pricing. The end-users, on the other hand, will be in a position to control their usage at a granular level ? responding to changing environmental conditions, power consumption, and reducing energy waste.

There are also those appliances that come with sensors, from boilers in the household, to heavy production machinery in industries. The EMS systems allow you to continuously monitor the load on the sensor-enabled assets, predict when overheating will occur and pinpoint risks of outages or damage on the line. Maintenance can then be immediately carried out to vent damages to the equipment. That way components like motors are protected from damages that would have ended up costing the firm lots of funds to replace. The data analytics from the EMS platforms enable the energy manager to strike that balance to optimise performance and reduce wear, thus prolonging the life of the equipment.

Even the heavy hitters in the energy sector get to benefit from the IoT. Take power production for instance. When you’re dealing with stations, solar farms and wind fields ? as they provide that much-needed power, they also consume energy and need plenty of maintenance. These are resource-heavy stations and as a manager, you want to keep a close eye on things. This involves a complex approach, from the sensors at the facilities, data analytics, to predictive maintenance. EMS software comes in to continuously monitor the equipment and wiring through the sensors. This enables you to prevent issues like overloads, and ensure that a balanced load is maintained on the line. The EMS goes a step further by enabling you to undertake predictive maintenance, for the timely repair of the equipment on the power grid, minimising accidents, preventing blackouts, and averting the costly down times.

Electricity utilities connecting their power plants and grids to available IoT solution networks get to be more transparent to their consumers, by showing them where the energy they use comes from. This empowers the consumers with the information needed to select the cleanest energy source during that period, which is particularly beneficial for those keen on adopting greener practices. For instance, you can have a system monitoring a network of grids, and dynamically shifting to power sources that have the least amount of emissions at the moment ? what’s gaining popularity as “automated emission reduction”. These lead to utility firms that produce clean energy getting more consumers and growing their revenue base.

Field And Energy Management: How FieldElite and ecoVaro Work Together Through IoT

So, on one hand, you have the energy managers following up on the consumption trends at their facilities, keeping an eye on their equipment.? On the other hand, you have field workers needed to carry out repair and maintenance works at different locations.? How do you join them together to ensure a seamless flow of operations?? The IoT.

This can be seen with ecoVaro and Field Elite interaction. Here, you have two independent systems that are interlinked through the internet and secure cloud systems, bringing more convenience on board for the users.

Picture this: Loggers collecting data from the meters and sensors on-site detect an anomaly, which you will immediately be able to view through the ecoVaro platform. This can be a myriad of issues, from plumbing to electrical systems that need to be worked on, and they are at multiple locations. How do you get them resolved? Dispatch your technicians through FieldElite.

Here’s a snapshot of how this works:

FieldElite and Ecovaro Working Together

This way, you get to optimise your operations and cut down on coasts ? taking advantage of the data analytics tools brought to you by ecoVaro, and streamlining your workflow through FieldElite. IoT powered workforce and energy management systems thus become key in reducing operational expenses, scheduling repairs and maintenance, and planning for peak hours

Accessing real-time data has the welcome benefit of cutting down on the hours spent on energy management processes. Jobs like meter reading that would have taken lots of time are handled by the system. When it comes to field management, operational efficiency is increased by taking away the manual processes involved with all the paperwork.? The sensors monitored via ecoVaro alert the field service manager about equipment that needs to be checked, and FieldElite shows the field manager issues that are on queue to be resolved. In both cases, you get accurate data that will inform the decisions made ? from the maintenance measures required, to scheduling the jobs for the technicians to handle them. It’s a win-win situation.?

Building Blocks For A Brighter Tomorrow

What’s more, this sets you up for the future. Adopting IoT solutions for your field and energy management operations will score you higher ROIs going forward. The global community is working towards enhancing the efficiency of its operations and putting in place sustainable practices in line with their Social Corporate Responsibility (CSR). This is from service providers like plumbing and electrical repair businesses, to utility firms and power generation plants. Lighting systems, homes, office buildings, factories, communities, transportation and whole cites are getting connected through the internet and more control done via smart devices. This is further accelerated by cloud systems enabling real-time, reliable and secure access to the information. By incorporating these setups into your business structure, you will gain a competitive advantage in your niche. After all, we’re still in the early stages of IoT across the industries.

Solutions to Password Overload

If only technologists had their way, passwords and PINs would have long been replaced with more innovative (and admittedly, better) security solutions. But such is not the case. Those alternative solutions, which include biometrics, smart cards, and password fobs, effective as they may be, are just way too expensive to implement.

So although passwords and PINs may not be here to stay, they certainly won’t be going away soon either.

Why keeping passwords in memory is no longer possible

A couple of decades ago, it would have been nearly impossible to crack an eight-character password using brute force. Today, however, advancements in computing power are rendering the typical passwords of the past easily decipherable, forcing us to come up with passwords that are not only much longer, but also much more complex and hence difficult to recall.

For instance, memorable words like your favourite character (e.g. ‘skywalker’) may have been acceptable then, but not anymore. Today?s security systems will encourage you to insert numbers or even other keyboard characters as a means to once again counter brute force. Hence, ‘sk5%ywa936lker@#’ may be more acceptable.

Remembering that one alone can be pretty daunting.

To further complicate matters, the number of applications that require passwords for access is much greater than before even for a single end user. Ordinary end users have to keep track of passwords for their email account, network login, workstation login, online services, and so on.

The burden is even greater for your IT admins, who have to remember a larger collection of passwords that protect business critical systems and applications. Clearly, the team in charge of your IT security will need a way to manage all these passwords.

Password management solutions

Existing password management solutions typically come in the form of software applications that store passwords. Basically, all you need to remember are your login details for the app a.k.a. the ?master password?. Once you’ve gained access inside, you can then retrieve any password you stored there.

Some of these apps are installed in portable devices like Pocket PCs, PDAs, or smartphones, which you would normally take along with you. For as long as the device stays with you, your passwords will be in safe hands. What’s more, you can retrieve them anywhere you go.

But obviously, there’s a problem. What if the device gets misplaced or stolen? Although the person who ends up with your device may not be able to gain access into the app and your passwords, neither will you. A better solution would therefore be an app that can be accessed anywhere but is not susceptible to getting lost.

Web-based password manager

A web-based password manager fits the bill. You don’t have to take it with you, but still you can access it almost anywhere. A typical web-based password manager will have all your passwords stored in a centralised, highly secure location.

If you want, you can even use your mobile password manager along with the web-based one. Ideally, your web-based password manager would have a copy of all the end-user passwords as well as the master passwords of your organisation.

With an easy to access but highly-secure web-based password manager, you no longer have to come up with passwords that (ironically) are supposed to be easy to remember but hard to crack at the the same time.

Furthermore, password managers are ideal for keeping passwords that have to be changed every-now-and-then; a requirement that’s becoming all too common in organisations bent on enforcing more stringent controls.

Transformation to a process based organisation

Today’s global marketplace rewards nimble organisations that learn and reinvent themselves faster than their competition. Employees at all levels of these organisations see themselves as members of teams responsible for specific business processes, with performance measures tied to the success of the enterprise. As team members, they are “owners” of the process (or processes) to which they are assigned. They are responsible for both the day to day functioning of their process(s), and also for continuously seeking sustainable process improvements.

Transforming a traditionally designed “top down control” enterprise to a process-based organisation built around empowered teams actively engaged in business process re-engineering (BPR) has proven more difficult than many corporate leaders have expected. Poorly planned transformation efforts have resulted in both serious impacts to the bottom line, and even more serious damage to the organisation’s fabric of trust and confidence in leadership.

Tomislav Hernaus, in a publication titled “Generic Process Transformation Model: Transition to Process-based Organisation” has presented an overview of existing approaches to organisational transformation. From the sources reviewed, Heraus has synthesised a set of steps that collectively represent a framework for planning a successful organisational change effort. Key elements identified by Hernaus include:

Strategic Analysis:

The essential first step in any transformation effort must be development of a clear and practical vision of a future organisation that will be able to profitably compete under anticipated market conditions. That vision must be expected to flex and adjust as understanding of future market conditions change, but it must always be stated in terms that all organisational members can understand.

Identifying Core Business Processes:

With the strategic vision for the organisation in mind, the next step is to define the core business processes necessary for the future organisation to function. These processes may exist across the legacy organisation’s organisational structures.

Designing around Core Processes:

The next step is development of a schematic representation of the “end state” company, organised around the Core Business Processes defined in the previous step.

Transitional Organisational Forms/ Developing Support Systems:

In his transformation model, Hernaus recognises that information management systems designed for the legacy organisation may not be able to meet the needs of the process management teams in the new organisation. Interim management structures (that can function with currently available IT system outputs) may be required to allow IT professionals time to redesign the organisation’s information management system to be flexible enough to meet changing team needs.

Creating Awareness, Understanding, and Acceptance of the Process-based Organisation:

Starting immediately after the completion of the Strategic Analysis process described above, management must devote sufficient resources to assure that all organisation members, especially key managers, have a full understanding of how a process-based organisation functions. In addition, data based process management skills need to be provided to future process team members. It is not enough to schedule communication and training activities, and check them off the list as they are completed. It is critical that management set behavioural criteria for communication and training efforts that allow objective evaluation of the results of these efforts. Management must commit to continuing essential communication and training efforts until success criteria are achieved. During this effort, it may be determined that some members of the organisation are unlikely to ever accept the new roles they will be required to assume in a process-based organization. Replacement of these individuals should be seen as both an organisational necessity and a kindness to the employees affected.

Implementation of Process Teams:

After the completion of required training AND the completion of required IT system changes, process teams can be formally rolled out in a planned sequence. Providing new teams with part time support by qualified facilitators during the firsts weeks after start-up can pay valuable long term dividends.

Team Skill Development and Continuous Process Improvement:

Providing resources for on-going skill development and for providing timely and meaningful recognition of process team successes are two keys for success in a process-based organisation. Qualified individuals with responsibility for providing training and recognition must be clearly identified and provided with sufficient budgetary resources.

The Hernaus model for transformation to a process based organisation is both well thought out and clear. His paper provides an ample resource of references for further study.

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