Spreadsheets, they are agile but fragile

Regulatory obligations do not consider the level of investment a business puts towards technology or teams to meet those obligations. Every organisation, regardless of its resources, is expected to comply. As a result, many teams must find innovative ways to deliver on these requirements.

Without a dedicated technology platform, organisations often meet AUSTRAC reporting obligations by extracting data from CRMs and transaction platforms, processing it using spreadsheets with VLOOKUPs, macros, and filters.

While there's technically nothing wrong with using spreadsheets, they come with several challenges. Let's explore them.

Agile and Fragile

Spreadsheets are widely used to support business processes, analysis requirements, and decision-making globally. They are flexible and agile tools that can be adjusted to meet new data demands or decisions with relative ease. Need to add a column, more rows of data, another VLOOKUP, or a new datasheet? Spreadsheets can handle it all, helping you solve the next analysis need.

However, agility can quickly become a liability. A simple reference mistake in a formula or a missed reconciliation can result in inaccurate results. The bigger the spreadsheets get, and the more links between sheets, the greater the opportunity for mistakes or leaks. They often become fragile ecosystems susceptible to file corruption, save overwrites, or unidentified errors. This fragility can jeopardise analysis and, in the context of regulatory obligations, lead to inaccurate reporting.

Manual Efforts and Single Points of Failure

A common side-effect of using spreadsheets for business processing is the significant manual effort required to manage, maintain, and use them. There’s a constant stream of tasks: opening a report, downloading data, filtering and formatting it, copying and pasting into the spreadsheet ecosystem, and then performing the next set of tasks to deliver the final product.

Typically, the author of the spreadsheets becomes the master and single point of failure, being the only one who knows how everything works. This complexity only increases as the ecosystem expands to accommodate more requirements.

Performance: The Hidden Cost

The most significant struggle for spreadsheet ecosystems is performance, especially when dealing with complex, non-functional requirements. Running a filter through a dataset once is simple, but this becomes very complex when running batches, managing delta files, and performing anniversary checks. The more complex the rule sets and data, the less likely spreadsheets can handle the load. Running batches, managing delta files, or processing repeat data at key milestones becomes increasingly difficult, if not impossible. While scanning a single record in real-time is feasible, handling millions of transactions or a client database is not.

We call this a hidden cost because it’s less obvious. Consider a simple sanction screening scenario: relying on annual client scans might be feasible in spreadsheets, but without sophisticated performance capabilities, a change in client status on a watch list could go unreported for up to a year. The potential fines and reputation damage from such oversights can be substantial.

About INGENNI-FIN

An Australian-founded and owned company, INGENNI-FIN specialises in compliance solutions that provide businesses with the capabilities to meet AML/CTF and sanctioning regulations. As a market disruptor, INGENNI-FIN targets affordable solutions, focusing on ensuring regulatory needs are met as efficiently as possible.