July 11, 2016

Excel Risk Management: Managing spreadsheet and EUC risk according to financial regulations

By Katya Mironova

Over the last decade there has been a wave of regulations and guidelines which have had a significant effect on companies’ Excel risk management of spreadsheets and other end-user computing applications (EUCs). Spreadsheets and EUCs are not the main focus of these regulations, but their implied use in report generation and risk management requires attention.

For risk managers the primary concern is; how will my company meet the requirements for these rules without reinventing the wheel? Simple. Keep using Excel, but use Excel with the iPushPull platform.

See below how we can help your company with Excel risk management!

Financial model risk management now includes Excel risk management

Excel risk management while meeting financial regulations

The Office of the Comptroller of the Currency (OCC) changed the game when they released their guidance on reporting risk associated with financial models. Their guidelines now extend to Excel risk management – managing the spreadsheets that house data before it is used in financial modelling. Financial institutions create models to help them predict how market moves (e.g. interest rate changes) will affect their – and their clients’ – money. These financial models are created by drawing on various sources of data (e.g. numbers from multiple spreadsheets and other sources) and are dependent on accurate information (i.e. the most up-to-date numbers). There are now at least two layers to risk management: Excel risk management and model risk management. Using information from Excel spreadsheets therefore requires validation when inputting, processing, and reporting data.

 

Risk Reporting is easier, quicker and better controlled with iPushPull’s live Excel data sharing. It doesn’t matter if the source data is housed all over the country, or the world. When you pull the data into the report you’re generating you know you’re getting the latest information and everyone’s using the same version. And every update is monitored and audited.

Companies need a data infrastructure to automate risk reporting

The Basel Committee on Banking Supervision (BCBS) also issued guidelines for effective risk data aggregation and risk reporting. Similar to the OCC’s guidelines, the BCBS’s guidelines relate to risk report generation – in this case the financial risk an institution is exposing itself to. There are risks associated with creating the report on risk – while this seems redundant, it can become a huge problem for a bank’s board and management as they make executive and strategic decisions. An important stipulation of these guidelines states that banks should have an integrated data infrastructure that can operate under times of economic normalcy or distress. One way to meet this requirement is to automate the risk reporting processes to generate reports with the appropriate frequency.

iPushPull allows you to decide how often you want data refreshed, enabling you to automatically update your spreadsheets to ensure timely and accurate results. Once you’re ready to finalise a statement or report, simply pause the live update stream and save the desired version. You can also share any of this content with your team’s mobile devices, tablets, or computers. Keeping you all connected and up to date with the most recent information from your Excel spreadsheets. 

 

Positioning your company to meet financial regulations

There is clearly a need for demonstrable control over spreadsheets and EUC applications to improve a company’s Excel risk management. However, organisations need to add control while retaining employee flexibility and productivity. The ideal product would be systemically integrated and largely automated for the ease of complying with these regulations and risk reporting.

We’ve, but at the core of each of them is the necessity for auditable collaboration and compilation of potentially sensitive data to meet your company’s regulatory and daily work efforts. When using iPushPull live Excel data sharing, you can have peace of mind knowing your company has the framework in place to meet the most important regulatory requirements for your reporting efforts.

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