Nothing seemed to challenge the reign of Excel for quite a long time. Every financial institution hailed Microsoft Excel as the most efficient tool for many banking processes such as financial analysis, data management, and decision-making. However, that reign hasn’t lasted for long.
It has been stated that approximately 90% of spreadsheets include errors, with half of the errors being introduced by humans.
Despite this concern, most financial institutions still prefer Excel for accounting teams. However, problems develop when spreadsheet is used in more financial-critical activities where it’s unable to scale.
Microsoft Excel has Been Widely used in the Financial Services Sector
Excel transformed data processing and analysis when it originally came out. It has remained a mainstay in finance departments ever since. However, in today’s corporate world, it is being surpassed by better-than-Excel competitors. These are new sorts of software applications that handle and analyze financial data far more effectively.
5 Hidden Business Challenges Beneath Those Neat Rows and Columns
Spreadsheet challenges are significant concerns for many financial institutions. Spreadsheets are not built to handle the volume and complexity of data created in today’s digitally linked world.
While you may still believe that Excel is a valuable tool to your banking processes, one thing reigns — Excel has limited applications today. Today’s customer demands will force you to adapt to every banking innovative idea, lest your customers leave for better services elsewhere.
Excel cannot effectively perform activities like accounting without errors. Money is key to your financial institution’s survival. And any slight error in the figures could make your institution go under at any given time.
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The 5 Challenges Brought By Excel
1. Data Overload and Inefficiency
- You may realize that Excel is your worst enemy when dealing with large datasets. The more data you or your team throws at the spreadsheet, the slower it responds. This slowness frustrates your team, leading to precious time lost.
2. Excel Has Error-Prone Formulas
- Formula errors strike when you least expect them. One misplaced cell reference or a tiny typo, and your entire dataset is useless. It’s beautiful but not very useful.
3. Spreadsheets Have Scalability Issues
- Excel challenges multiply as your financial institution grows. Managing complex banking processes and handling an expanding team with Excel alone is tiresome.
4. Many Security Concerns
- Are your customers’ sensitive data safe on an Excel spreadsheet? While Excel is convenient, you don’t get the safest data storage in any way. Excel cannot shield critical information from prying eyes or accidental deletions. It lacks robust security features.
5. Time-Consuming Manual Tasks
- Excel is time-sucking, especially when your manual tasks start piling up. You have to copy-paste, sort, and filter. Every second you spend on repetitive actions is a second stolen from strategic decision-making.
With Excel Dethroned, Who is the New Ruler?
Times have changed. The industry is continually evolving, demanding greater efficiency, precision, and security. Automation is the new king, casting Excel aside in almost every aspect of banking operations.
Automation is a new way to solve the banking problems caused by Excel. You can now handle repetitive tasks like data entry, reconciliation, transaction processing, and credit scoring by intelligent automated systems. That leaves your team with more time to focus on strategic decision-making.
Benefits of Automation in Banking
1. Automation streamlines routine tasks
- Automation completes in minutes, processes that once took you or your team hours or days, boosting your institution’s overall operational efficiency.
2. Cost Savings
- You can significantly reduce labor costs by automating repetitive tasks. Reducing errors enhances efficiency, lowers operational costs, and improves resource allocation.
3. Accuracy and Error Reduction
- Automation eliminates the risk of human error in data entry and other repetitive tasks. This enhanced accuracy helps you improve compliance and manage risks.
4. Faster Decision-Making
- Think of a scenario where your credit department is still relying on manual processes for evaluating loan applications. For each application, they must collect, review, and verify documents. The next thing is that they manually input data into the spreadsheet, analyze credit scores, and assess risk.
In this non-automated environment:
- The manual data entry is prone to errors ( i.e., typos or miscalculations).
- The process is time-consuming. (Loan applicants experience delays in receiving decisions).
- Your loan officers struggle to manage a growing number of applications, leading to a backlog.
- Market conditions may change while decisions are pending. This delay affects the relevance of the initial assessment.
5. Enhanced Compliance
- Automation ensures you consistently adhere to industry and compliance standards.
6. Improved Customer Experience
- Like automation, the customer is king. When you automate your banking processes, you enable quicker transaction processing. Automation reduces the amount of time your customer waits, improving satisfaction.
7. Risk Management
- Early detection allows you to proactively address and mitigate risks. That’s only possible when you use automated risk assessment tools. Such tools analyze on your behalf, vast amounts of data in real-time, identifying potential risks promptly.
8. Fraud Prevention
- Has your financial institution ever experienced unusual patterns and anomalies indicating fraudulent activities? Automation introduces real-time monitoring and automated alerts that enable you to promptly respond to potential security threats.
9. Competitive Advantage
- Automation positions your financial institution as an industry leader. This enables you to quickly adapt to changes in the digital landscape.
Ideally, your financial institution cannot respond swiftly to customer needs without automation. Meanwhile, your competitors, on the other hand, utilize automated systems and a wide range of applications that fit their needs.
Embrace a Fully Automated Ecosystem
Excel’s reign as the ultimate tool is gone. Automation is streamlining every banking process. Talk of enhancing data analysis capabilities, and improving risk management, and financial decision-making.
Avoid Costly Mistakes Brought by Excel
Although people rarely acknowledge many Excel mistakes, the few examples documented demonstrate one thing: human error has devastating implications. And it’s not just money; such scenarios can result in reputational harm, which is significantly more damaging to your financial brand.