Spreadsheet Challenges in Banking & Capital Markets
Spreadsheets are powerful and flexible reporting tools used ubiquitously throughout front, middle and back office operations within banks across the globe. In the front office, traders rely on spreadsheets to analyze market data and create accurate credit risk and cash flow models. In the middle office, spreadsheets are used to reconcile trades with ERP systems, for reconciliations, and to report on P&L. In the back office, spreadsheets are often used to prepare financial statements, audit checklists, performance plans and management reports.
Despite this ubiquity, many banks have failed to apply the proper testing and controls to critical spreadsheets, resulting in errors, financial restatements, lost earnings, non-compliance with regulatory mandates, and shattered shareholder confidence. Due to the criticality and inherent complexity of these spreadsheets, banks must effectively mitigate spreadsheet risk while ensuring compliance with ever-changing regulatory mandates, including SOX 404, SEC, OCC, FDICIA, FSA, MiFID, Combined Code and Basel II.
Business Mandates The bottom line: critical spreadsheets should be managed with the highest level of integrity and trust throughout their lifecycle. This requires establishing a spreadsheet control environment that incorporates: spreadsheet security, access control, segregation of duties and responsibilities, documentation, input control, data integrity, logic inspection, analytics, version control, and change control. These are the critical technology requirements recommended by leading tax and audit firms for establishing effective spreadsheet governance - all of which can be automated by the Prodiance Spreadsheet Compliance Edition solution.
Mitigating Spreadsheet Risk With the Prodiance Spreadsheet Compliance Edition solution, banks can:
- Automate spreadsheet discovery, inventory and change management processes
- Improve spreadsheet security and limit access to critical spreadsheets to only authorized personnel
- Automate spreadsheet versioning while providing access to historical data
- Analyze spreadsheets for complexity, risk and structural errors
- Enforce spreadsheet development lifecycle policies and best practices
- Automate spreadsheet review and approval via automated workflows and email notifications
- Established a controlled environment for all critical spreadsheets and associated documentation
- Improve management reporting and visibility for all critical spreadsheets
- Improve compliance with regulatory mandates
- Boost productivity through a seamless, non-invasive end user experience