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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9 Cloud Security Questions you need to ask Service Providers

Companies in Ireland and the UK who are considering cloud adoption might already have a general idea of the security risks inherent in cloud computing. However, since different providers may not offer the same levels of risk mitigation, it is important to know which providers can give sufficient assurance on cloud security.

Here are 10 cloud security questions to ask service providers vying for your attention.

1. Where will my data be located?

There are a variety of reasons why you will want to ask this question. One big reason is that there are certain countries that don’t have strict legislation (or any legislation at all) pertaining to cloud computing. In that case, the provider won’t be as motivated to apply high levels of risk mitigation.

So if your data is hosted off shore, then you might want to reconsider or at least conduct a deeper study regarding the security conditions there.

2. Do you have provisions for regulatory compliance?

Certain standards and regulations (e.g. PCI DSS and possibly the EU Data Protection Directive) have specific guidelines pertaining to data stored in the cloud. If your organisation is covered by any of these legislation, then you need to know whether your provider can help you meet requirements for compliance.

3. Who will have access to my data?

In a cloud environment, where your data is going to be managed by people who aren’t under your direct supervision, you’ll have to worry as much about internal threats as you would with external threats.

Therefore, you need to know how many individuals will have access to your data. You also need to know relevant information such as how admins and technicians with data access rights are screened prior to getting hired. You also need to determine what access controls are being implemented.

4. How is data segregated?

Since there will be other clients, you will want to know how your data is going to be segregated from theirs. Is there any possibility of an accidental or intentional data breach due to poor data segregation? Find out if your data is going to be encrypted and how strong the encryption algorithm is.

5. How will you support investigative activities?

Sometimes, even if strong cloud security measures are in place, a data breach can still happen. If it does happen, the provider should have ways to track each user/administrator’s activity that can sufficiently support a detailed data forensics investigation.

Find out whether logs are being kept and how detailed they are.

6. Are we protected by a Disaster Recovery/Business Continuity plan? How?

Don’t be fooled by sales talk of 100% up-time. Even the most robust cloud infrastructures can suffer outages too. But the important thing is that, when they do fail, they should be able to get up and running in the soonest time possible.

Don’t just ask about their guaranteed RPOs and RTOs. Find out whether your data and applications will be replicated across multiple sites. Unless the provider says they will be, you need to find a provider with a better infrastructure.

7. Can I get copies of my VMs?

In a cloud infrastructure, your servers are actually in the form of files known as virtual machines (VMs). Because VMs are just files, they should be easily copied. There may be issues though, like the VMs might be stored in a not-so-popular proprietary format. Another possible issue is that the provider may simply not allow copying.

Having copies of your VMs can be useful should you later on decide to transfer to another provider or even duplicate your cloud infrastructure on your own.

8. What will happen to my data when I scale down?

One outstanding benefit of cloud computing is that when your business demands drop, you can easily scale down computing resources and reduce your cloud spending. ?But what will happen to your data when you decommission virtual servers? Will they be discarded?

You might want your data to be retained up to a certain period. On the other hand, you might also want them to be deleted immediately. Ask about the provider’s data deletion/data retention policies and see if they are in line with yours.

9. What will happen to my data if I decide to close my account?

There might come a time when you’ll want to terminate your contract with your cloud provider. Just like in issue #8, you’ll want to find out more about data deletion/data retention policies.

Although some providers can give you detailed answers, many of these answers can include a lot of technical jargon that can leave you totally confused. If you want someone you can trust to:

  • simplify those answers;
  • help you pick the right cloud service provider, and
  • even make sure cloud security is really upheld once your cloud engagement is ?under way

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Symbion Pharmacy Services? Definition of Responsibility

A ?symbion? is an organism in a symbiotic (i.e. mutually beneficial) relationship with another one. In the case of Australia?s giant Symbion Pharmacy Services, this means supplying and delivering over-counter Chemmart medicines to more than 3,000 hospital and retail pharmacies, while remaining mindful of its carbon footprint.

In 1999, the company with the tagline ?life matters? and a desire to be seen as ?a good corporate citizen? decided it was time to measure exactly what it was pumping out from 12 facilities and over 200 vehicles. This was a voluntary decision as even now there is still no carbon emissions law in Australia (although no doubt being a ?first mover? will put the company in a competitive position when this inevitably comes).

Symbion decided to install emission detection devices and connect these to a central monitoring system with the intention of managing what these measured. There were two stages to this process. First, Symbion determined its reporting requirements based on one of its larger warehouses. Following that, it established a carbon footprint for each of its wholly owned and managed facilities. This put it in a position to:

  • Analyse total emissions down to a level of detail where it understood the contribution of each source
  • Use big data management tools to identify carbon hotspots for priority remedial action
  • Inform the affected workforce, explain the monitoring system and keep them in the loop
  • Separately manage energy abatement programs such as lighting and delivery routes

The program also had productivity spin-offs in that it focused management attention on the processes behind the emissions that were ripe for material and system improvements. It also provided marketing leverage. Symbion?s customers are in the wellness business, ahead of the curve when it comes to how emissions contribute to chronic illness, and aware of the cost of this in terms of human capital.

EcoVaro could help you manage your throughputs by analysing your data on our cloud-based system. This includes trending your metrics, comparing them to your industry seasonal average, and providing you with a business-like view of how well you are doing.

Our service reduces your reliance on (and the cost of) third party audits, and simplifies the reporting process to your controlling authority. It simply makes more sense to contract your software out this way, and only pay for it when you need it.

How AI Helps Improve Field Service

Its seems that with the current rate of technological innovation that these is something new every single day.  Therefore, you’re always looking forward to a new technological innovation that’s going to help you make your business operations more efficient and automated.

One of the most fascinating milestones in the field of technology is the integration of Artificial Intelligence (AI) in business. In one way or the other, AI gives a glimpse of machine supremacy that allows computers to perform tasks that were initially performed by humans. 

Are machines going to completely replace people in the workplace?

Of course, not.  Technologies like AI and Machine Learning are designed and meant to support employees in doing their tasks too boost their productivity.

AI is predominantly used to eliminate jobs and tasks that humans find boring, demotivating or monotonous. In some cases AI is also used to do jobs that are considered dangerous for humans to preform.

Previously the most common implementations for AI were all about gaming, entertainment, and advanced science,  now it’s spreading into a number of industries including the field service industry.

FieldElite – Field Service Software , can help you optimise the day-to-day operations of your business.

AI in field service management will enhance you business capabilities with:

  • Information Sharing
  • Real Time Updates
  • Automated Workflows
  • Digital Form Data Collection
  • Data Analysis

Improved Customer Service

For Service Based companies, customer retention is vital. Primarily because It can be 5-25 times more costly to acquire a new customer than it is to retain an existing ones.

Therefore customer retention should be a primary focus.? The good news is that by making use of AI you can implement services It can be 5-25 times more costly to acquire a new customer than it is to retain an existing one.

Staying on top of and ensuring you satisfactorily address and meet you customer demands and expectations can be a daunting task.? It can also be an expensive one,? especially for small field service based businesses like :

  • Heating & Plumbing Engineers
  • Electrical Contractors
  • Fire Safety Inspectors
  • HVAC Engineers
  • Facility Management
  • Building, Construction & Trade

Implementing Artificial Intelligence and Machine Learning to automate mundane and repetitive customer administration tasks will enable your staff to be free to provide additional value added tasks for your customers. Making your customers happier.

?Think about the active Chatbots. You can always get complaints directly from customers and address them right away.??

If at any point the customer is unhappy with your services, they can always raise the issue via the Chatbots. Since the bots contain necessary customer information, you can always get back to them and fix the issue at hand.?

With AI in field service, you can solve problems before they arise, or what is otherwise known as predictive maintenance,? In that way, you’ll have better customer relations because you’ll be able to address your customer concerns before they even become aware of them.

Improved Productivity

Scheduling tasks and managing the workforce isn’t a walk in the park. It goes beyond assigning tasks to your team members in the field and giving them deadlines to meet. Whether it’s a small firm or a big organisation, it’s quite difficult to organise the workforce.?

However, adopting Artificial Intelligence can iron out the difficulties most field organisations face in scheduling and managing tasks. Some years back, most firms relied on human intelligence to dispatch jobs to the right people based on given conditions. This was quite difficult, especially that it wasn’t always successful. But thanks to AI. With field service apps like FieldElite scheduling tasks and managing workforce is only a few clicks away.?

What’s more? There?s no room for error. Therefore, you’ll always match the right people for the job. Again, your team will always get tasks on time. That means, the job completion rate will go up, and hence the workforce becomes more productive.?

Predictive Maintenance

Usually, most business operations are based on ?solve the problem as it occurs?, which is just OK. However, it’s not always safe to wait until a problem occurs so that you solve it. Prevention is better than cure, and that’s why Artificial Intelligence comes handy in Field Service.

Using FieldElite Workforce Management Software , you don’t have to wait until something breaks.? Utilizing AI in field service enables you to proactively address field service needs and prevent unforeseen failures and interruptions.?

The ability to predict field service needs through field service apps like FieldElite enables you to make more accurate forecasts. In this way, resource planning is made easier, and as such, you’ll have smoothly running workflows. Again, by taking care of unforeseen circumstances in advance, you’re flexible enough to take care of the unexpected. And that means the overall productivity of your business will go up.

Job Management

Most field service jobs involve multiple stages that can take several days to complete. In addition to this, more often than not, you have to coordinate lots of equipment and contractors at the same time. All these can’t be achieved solely by human efforts. For more successful outcomes, it’s important to incorporate Artificial Intelligence in your field service operations.?

FieldElite is the field service solution that can help you manage sophisticated tasks. The app is packed with field service management tools that enable you to assign complicated tasks and keep track of your field techs. For long-cycle jobs, FieldElite app enables you to follow up on the activities going on the field to ensure they’re completed.?

With AI, there?s no room for error even when the jobs become more sophisticated.

Data Analysis

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Field service industry involves lots of data. Some years back, organisations depended on human intelligence to analyse big data. Well, things still worked out, but as a human is to err, the outcome wasn’t always perfect. However, with Artificial Intelligence data analysis, 100% accuracy in data analysis is achievable. Field service solutions like FieldElite provide sophisticated data analytic tools that enable you to crack massive data and offer accurate solutions.?

FieldElite data analytics capabilities give you an insight into what’s not working and what needs to be improved. In that way, you can always address matters arising and take care of the loopholes.?

It’s time to go paperless with field management software like FieldElite if you?d like to make your business more profitable. Apart from improving the productivity of your workforce, incorporating AI in your business increases profitability. If you’re still doing your usual field rounds with a clipboard, it’s time to simplify your task with FieldElite app.?

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