# Three challenges of using Excel for regulatory reporting Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2019-01-16 Category: TECHNOLOGY Category URL: https://financedigest.com/category/technology Meta Title: Financial Institutions Must Overcome Excel Limitations for Meta Description: Learn why financial institutions need to move away from Excel and towards intelligent data preparation platforms to meet compliance demands efficiently and URL: https://financedigest.com/three-challenges-using-excel-regulatory-reporting-2html ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/three-challenges-of-using-excel-for-regulatory-reporting-1736840137121-compressed.jpg) By **William Davis**, Senior Director, [Trifacta](https://www.trifacta.com/) The financial services sector is constantly adapting to shifting regulatory requirements. As markets face increasing scrutiny in the wake of a tumultuous macro-economic context, so too is regulation growing ever more granular and nuanced. Research from Thomson Reuters Regulatory Intelligence service estimates that financial institutions track and address an average of 200 new international regulatory revisions every day. To field compliance queries, financial institutions are managing a vast volume and variety of transaction [data](https://www.financedigest.com/how-to-drive-a-data-culture-in-the-finance-industry.html "How to drive a data culture in the finance industry"). Ensuring that this data doesn’t have any quality issues is imperative, otherwise it can severely skew downstream [reporting and put millions of dollars at stake](https://www.financedigest.com/itv-shares-jump-on-reports-it-could-sell-stake-in-production-arm.html "ITV shares jump on reports it could sell stake in production arm"). As such, financial institutions must meticulously prepare data, which can account for up to 80 percent of the time required to [meet compliance demands](https://www.financedigest.com/how-can-businesses-digitalise-supply-chains-to-meet-demand.html "How can businesses digitalise supply chains to meet demand?"). Traditionally, financial institutions have relied  on common spreadsheets like Excel – a technology first introduced nearly 40 years ago – to complete regulatory reporting, which is dependable, yet reaching its limits as the speed of regulatory reporting accelerates and [demands faster and more robust](https://www.financedigest.com/lego-posts-strong-growth-on-robust-demand-new-store-openings.html "Lego posts strong growth on robust demand, new store openings") data preparation. Below, we review some of the core challenges of using Excel for regulatory reporting, which has led to the increasing [adoption of intelligent and automated data preparation platforms among](https://www.financedigest.com/epi-how-to-build-trust-and-adoption-among-consumers-and-merchants.html "EPI: How to build trust and adoption among consumers and merchants") financial institutions. **Excel has** [data lineage limitations](https://www.financedigest.com/omicron-poses-very-high-risk-but-data-on-severity-limited.html "Omicron poses ‘very high’ risk but data on severity limited") When performing regulatory reporting, data lineage is of the [utmost importance](https://www.financedigest.com/quality-control-measures-for-drug-development-are-of-utmost-importance-as-inadvertent-presence-of-unknown-pharmaceutical-ingredients-can-further-complicate-health-conditions-of-the-patients.html "Quality control measures for drug development are of utmost importance as inadvertent presence of unknown pharmaceutical ingredients can further complicate health conditions of the patients."). Both internal and external stakeholders need visibility into understanding exactly how [data has been transformed](https://www.financedigest.com/is-the-road-to-data-transformation-slowing-digital-transformation.html "Is the road to data transformation slowing digital transformation?") prior to being submitted to a regulator. Excel has data lineage limitations, which makes it difficult for data analysts to demonstrate the work they’ve done. Often, they will have to go back through their work and manually demonstrate each step they took with a variety of stakeholders in order to ensure accuracy. Instead, financial institutions need to look for data preparation solutions that record all of the data [transformation steps](https://www.financedigest.com/open-finance-the-next-step-for-global-digital-transformation.html "Open finance – the next step for global digital transformation") taken, allowing analysts to easily demonstrate how they’ve arrived at any particular answer and sign off on work. **Excel is manual** Every transformation in Excel must be done manually—there is no embedded intelligence that guides the data preparation process, nor many shortcuts that allow users to skip certain segments. Instead, nearly every transformation must be built from scratch and remembered for each new dataset. Not only does this leave analysts more prone to errors, but it doesn’t allow for easy [collaboration among team](https://www.financedigest.com/a-winning-team-how-corporate-champions-can-drive-successful-collaborations.html "A winning team: how ‘corporate champions’ can drive successful collaborations  ") members. Completing regulatory reporting, as is the case with most initiatives, is best [executed as a team](https://www.financedigest.com/adnami-strengthens-executive-team-with-jorgen-gosvig-appointed-as-cfo.html "Adnami strengthens executive team with Jørgen Gosvig appointed as CFO"), where different members can contribute their unique knowledge about the data sets at hand and how they should be transformed. By operating in a siloed fashion with Excel, there is more opportunity for mistakes to go unnoticed or be repeated. **Excel doesn’t offer visual guidance** Completing regulatory reporting often requires [leveraging a number of different data](https://www.financedigest.com/how-payment-institutions-can-leverage-data-to-support-merchant-customers.html "How payment institutions can leverage data to support merchant customers") sets, both from within the organisation, as well as externally. Remodifying quality issues is the [top priority](https://www.financedigest.com/why-intelligent-automation-should-be-a-top-priority-for-enterprises-in-2022.html "Why Intelligent Automation should be a top priority for enterprises in 2022"), which abound from misspellings and inconsistencies to anomalies. Certainly, analysts can find and address these data quality issues with Excel, but without visual guidance, it can require lots time spent scrolling and searching. Instead, financial institutions should look for a tool that automatically and visually surfaces quality [issues so that they are easy to identify and correct early on in the preparation process—instead of after the reporting](https://www.financedigest.com/tesla-investors-to-focus-on-demand-issues-in-earnings-report.html "Tesla investors to focus on demand issues in earnings report") has been completed. This [saves untold hours in redoing previous work and accelerates time](https://www.financedigest.com/modernisation-of-insurance-technology-saves-invaluable-time-and-money.html "Modernisation of insurance technology saves invaluable time and money") spent sifting through datasets to find these data quality issues. **Excel can’t [handle](https://www.financedigest.com/crowdsourcing-of-data-to-drive-the-patient-handling-equipments-market.html "Crowdsourcing of data to drive the Patient Handling Equipments Market") large data volume or data complexity** As regulatory [reporting grows](https://www.financedigest.com/car-rental-service-market-is-forecasted-to-grow-at-a-7-2-cagr-by-2031-comprehensive-research-report-by-fmi.html "Car Rental Service Market is forecasted to grow at a 7.2% CAGR By 2031- Comprehensive Research Report by FMI") increasingly nuanced—demanding more and more types of data at higher volumes—Excel is hitting its limits. Excel was (and continues to be) a great tool for preparing small amounts of structured data, but slows down considerably with [big data](https://www.financedigest.com/marine-big-data-market-to-expand-at-cagr-of-21-5-during-forecast-period-tmr-insights.html "Marine Big Data Market to Expand at CAGR of 21.5% During Forecast Period – TMR Insights"), and often can’t handle the complexity of modern semi-structured data sources. It’s important for analysts to be able to [work with all of their data within one technology](https://www.financedigest.com/what-is-5g-technology-and-how-it-works.html "What is 5G technology and how it works") (instead of breaking it into different segments for different analysts to prepare) to remain consistent and get the full view of their data. **The** [bottom line](https://www.financedigest.com/business-leaders-flexibility-for-everyone-contributes-to-gender-equality-in-the-workplace-without-affecting-your-bottom-line.html "Business leaders: flexibility for everyone contributes to gender equality in the workplace, without affecting your bottom line") While Excel is still a reliable and useful tool to prepare data at a [small scale](https://www.financedigest.com/evolving-trends-in-small-scale-single-and-multi-rotor-wind-turbine-market.html "Evolving Trends in Small Scale Single and Multi-rotor Wind Turbine Market"), entrusting it with your regulatory reporting—the accuracy of which can be worth millions of dollars—isn’t ideal. You need a powerful, agile [data preparation platform to enhance the power of your regulatory](https://www.financedigest.com/how-to-navigate-multiple-data-privacy-regulatory-frameworks.html "How to navigate multiple data privacy regulatory frameworks") reporting department.  This platform must provide intelligent suggestions, an intuitive interface, and collaboration [capabilities that will help accurately streamline data](https://www.financedigest.com/optable-announces-new-data-clean-room-capabilities.html "Optable Announces New Data Clean Room Capabilities") preparation processes across the department. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---