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Think twice before using spreadsheets for these tasks

Kylee Wooten
Posted by Kylee Wooten
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Financial institutions, small and large, touch numerous data sources every day, which can present problems when each data source speaks a different language, preventing different systems – or even departments – from obtaining the same data. Exacerbating this problem of inconsistent data, many community banks and credit unions are still heavily reliant on their Excel spreadsheets, which are time-consuming, prone to errors and static in nature.

Despite the need for high-quality data, many smaller community institutions are reluctant to replace their legacy core systems due to financial and time restrictions. An estimated 750 million people worldwide use Excel, and while it remains a vital tool, financial institutions may want to consider other options for greater efficiency and speed within their organization.

Document management

The more spreadsheets your financial institution uses, the more “versions of the truth” it must defend to auditors, as each spreadsheet has room for error. Financial institutions should strive for a single version of the truth for greater transparency for customers, as well as more accurate and efficient processes. Implementing a central database allows each department to work seamlessly together. Don’t want to completely give up your Excel files? Consider centralizing data with software like a document library to increase the accessibility of files and include files, like Excel and PDFs, for complete documentation. In addition, imaging systems, in addition to document libraries, can automate the replication of files, which further reduces the risk of overwriting files and eliminates the need for manual downloads and re-uploads. Solely relying on the use of spreadsheets is a static way of gathering data. In order to speed up and execute your processes safely and effectively, it’s time to step away from fully relying on your spreadsheets.

CECL-compliant modeling

The Financial Accounting Standards Board’s deadline for implementing the Current Expected Credit Loss (CECL) is quickly approaching. While regulators have assured that banks can continue using their Excel spreadsheets to comply with the new accounting standard, many banks are finding that third-party providers help speed up the process and grant greater peace of mind. Ethan Heisler, a former Citigroup managing director and writer for Heisler’s Quality Letter and Analysis, explained to American Banker that while banks may continue to use Excel, larger community banks will “likely be scrutinized more closely” if it decided to continue to use the spreadsheet software.

Implementing software specialized for CECL grants financial institutions the ability to take control of larger amounts of data over longer periods of time, which makes it a much more scalable solution than Excel. Furthermore, it decreases the number of human touches and manual calculations that may lead to errors and replaces it with an automatic, defensible calculation to show regulators.

Customer relationship management

While utilizing Excel and other spreadsheets to maintain and manage customer relationships may seem like a simple, affordable solution, there are many disadvantages to doing so. Similar to when institutions use Excel for CECL modeling and document management, an institution puts itself at risk for manual data entry errors and inconsistent data. A full customer relationship manager (CRM) allows institutions to unify and leverage all of its customer information in a centralized location, rather than juggling data across multiple platforms. With a relationship manager tool, an institution can notify lenders of upcoming tasks that are due, keep tabs on email logs and see notes about the customer – no matter who entered the information. Ditching a spreadsheet in favor of a relationship manager system greatly increases consistency and transparency into customer relationships and allows an institution to capitalize on more opportunities to connect with their customers.

While Excel is undoubtedly an important tool for many financial institutions, there are simply some areas that Excel is not equipped to handle as well as other technologies. Financial institutions that are looking to increase their digital footprint and maximize efficiency should look to identify areas in which technology can automate, protect and enhance its data and information.

tags: CECL, CRM, document library, relationship manager, spreadsheet