Old Tech + New Tech = RegTech


By FINTECH Books Contributor, Brendan Bradley

“Excel spreadsheets and End User Computing in a Regulated World”

Such controls include the requirement that banks should be able to identify all the spreadsheets used in critical processes and ensure that all data and calculations used in such processes are adequately policed by internal compliance departments.

Regulators have recognised the risks of End User Computing (EUC) solutions. Regulations including BCBS239 and Dodd Frank require banks and other financial organisations to put effective controls in place around EUC solutions and ensure that they are consistently applied.

If an analyst needs to model a new product pay-off or calculate the risk for a complex portfolio, then Microsoft Excel is the tool of choice. No other product offers the same flexibility, inter-connectivity and rapid time-to-market so no other tool is more widely used across the financial markets.

Financial organisations need to move fast to seize new opportunities and the solution they turn to is often the ubiquitous desktop spreadsheet.

Uncontrolled and unmonitored spreadsheet use, often by self-taught traders and analysts, inevitably leads to mistakes. The manual processes associated with such solutions introduce further risks. But in an era of reduced IT budgets, these temporary ‘quick fixes’ often mutate into permanent solutions.

But this flexibility can also be a weakness. How can technology satisfy the seemingly conflicting needs of the trading desk and the regulator in this space?

In addition, with greater use of cloud technology, how can this be integrated with your existing applications to create powerful solutions while reducing risks, costs and inefficiencies?

Furthermore, given that cloud solutions need to provide end-to-end encryption, to give full control and security, how can compliance be ensured whereby full audit and reporting features are provided to give a complete record of user interactions with the service?