Mike Saliter, Global Head of Industry Market Development, Financial Services at QlikTech

Spreadsheets are firmly associated with the finance sector. If you deal in numbers, you work in Excel spreadsheets. While there are plenty of new tools that have emerged in the financial services and banking industries over the past couple of years, spreadsheets continue to remain at the heart of modern businesses, hosting critical business information that, if analysed for value, could provide insight for competitive growth, but also help to minimise risk. As Pacific Crest‘s Jesse Hulsing claimed, the most prevalent method today of sharing insight is disseminating spreadsheets built in Microsoft’s Excel.

Excel can be great for working out equations and formulas and even for storing the most basic information. Yet, vital risk information needs to be easily viewed, so that issues can be highlighted and decisions made as soon as possible. After all, it’s one thing having these vast amounts of data within an organisations, whether spread over multiple spreadsheets or in multiple data sets stored on servers, but it’s quite another to have visibility of a large amount of this data within a platform that allows for business discoveries, unearthing anomalies or business opportunities that would otherwise have remained hidden. The issue with Excel spreadsheets is that information is contained in silos – making it hard to analyse information across the business, or even across different projects.

For this reason, and in these tightened economic times, banks and financial services companies need to be looking to data analysis, beyond spreadsheets, for business opportunities and to mitigate risk. And, in fact, although their reputation for using spreadsheets might say otherwise, we’ve seen a number of innovative banks making the first steps away from Excel and instead turning to analytics to sharpen risk assessment and drive revenue.

One such example comes from one of the top ten investment banks, which was able to consolidate over 50 Excel data sources into a single Business Discovery application for a common database for compliance and operations. Another bank empowered its senior executives to monitor issues and eliminate manual or error-prone Excel with a Risk Control Room based on a dashboard view of all relevant information. Clearly moving away from Excel not only works, but provides great opportunities for those who are willing to take themselves away from a process they have become so accustomed to. McKinsey puts it well. The management consulting company notes that IT systems transformed all banking processes in the 1980s and 1990s. Now, banks have the same rare opportunity to reinvent themselves, but this time with data and analytics.

Now more than ever, banks and financial services organisations need software platforms that can help them accurately analyse their data in real-time, to get true insights around what is happening in their industry, so they can react accordingly. Ultimately, those banks and financial services organisations that embrace data analytics and move beyond the spreadsheets will have less risk, along with a differentiator and competitive advantage. While we’ll likely never completely eliminate Excel, there are solutions that can augment the spreadsheet-based technology to reduce reliance on it and its associated high risks and errors.