Since its inception more than twenty years ago, the spreadsheet has become somewhat of a mainstay in corporate finance. In an increasingly security-conscious digital age, however, the old school spreadsheet is no longer fit for purpose. To find out why, we joined Manchester fintech innovators, AccessPay, for an exclusive Q&A with Lloyds Register, ITV, NSG Group, and Evershed; four companies that have called time on the spreadsheet and made the switch to automation.
AccessPay recently released a report on research they conducted into the role of spreadsheets in the financial industry. The study focussed on two groups traditionally reliant on spreadsheets; financial professionals and global treasurers. Findings revealed that aside from their continued use in balance statement data compilation and forecasting, overall dependency on spreadsheets is in decline. Instead, users are moving towards emerging automation technologies, of which the fastest growing are online banking portals and Enterprise Resource Planning systems.
Speed was the main advantage of automation cited by all four companies at last week’s Q&A. According to a representative from the law firm, Evershed, processes that originally took hours to complete have been reduced to mere minutes. Lloyds Register agreed, adding that automation increased efficiency as it allowed professional to concentrate on more critical tasks. Global media network, ITN, found that access to real-time cash data visibility saved them not only hours but a staggering number of weeks. Their experience is supported by the research, as ‘over half of the respondents from each group claimed legacy systems were slowing down progress’.
Global glass manufacturer, NSG Group, raised the issue of security. Within modern organisations, risk assessment is no longer the job of a single department but the responsibility of all. It must, therefore, be integrated at every stage of data handling processes. By reducing the number of stages at which data can be hacked, automation eliminates the threat that manual handling poses to data security.
Challenges facing automation
Advantages notwithstanding, uptake of automation is slow. Many companies continue to face resistance from clients who question the transparency of automated transactions and express suspicion of digitalisation.
Their trepidation is shared by employees of financial companies whose jobs rely on the continued existence of this legacy system. Many are worried that implementation of new digital systems would mean being reallocated to new departments or losing their jobs.
The research commissioned by AccessPay concludes that while the move towards digitalisation is slow, it is looking optimistic with over 86.1% of respondents reporting to believe that digital transformation can be achieved as a phased approach in finance. In order to speed up this process, AccessPay CEO Anish Kapoor suggest that the key lies in education and working to change attitudes. He says, “many Global Treasurers are not even aware these alternatives exist. It is up to the fintech community to educate businesses, not just to the existence of these technologies, but to their affordability and ease of use.”
The research reveals that it is only a matter of time before the spreadsheet is replaced across all financial operations. The question that remains now is: just how long will it take for the spreadsheet finally die?