Seven Reasons Why Spreadsheets Aren’t Great for Compliance

Spreadsheets are great, but several things make them an imperfect tool for compliance work. A lack of real-time updates, the difficulty of maintaining an audit trail and guarding permissions, information security concerns…all of these make the spreadsheet an imperfect vehicle for maintaining your compliance program. Fortunately, the growth of the regtech industry has seen the introduction of tools designed specially for compliance. These next-generation toolsets provide optimized data import and integrations, customizable workflows, and SAR-filing efficiency improvements.

Introduction

Spreadsheets are great. Just not for compliance.

Let’s make one thing clear: spreadsheets are amazing. The spreadsheet is an incredibly powerful and useful tool. Its ability to catalog, organize, and analyze large amounts of data in a user-friendly format is second-to-none. Frankly, it’s hard to imagine the modern business world without it. 

For compliance work, however, spreadsheets aren’t a perfect fit. True, there’s a significant amount of data collection and analysis involved, but certain other aspects of the compliance professional’s workflow make the use of a spreadsheet feel like a square peg in a round hole. 

Having spent time with the problem ourselves, we’ve put together a list of what we think are seven great reasons to stop using spreadsheets for your compliance work.

Reasons to Avoid Spreadsheets for Compliance Work

1. Spreadsheets are tedious to set up.
   ‍Compliance professionals show their value as investigators, not as data-entry technicians. But if your data still lives exclusively in spreadsheets, chances are your team is doing a lot of manual data entry. And all that time spent copy / pasting is part of the reason why compliance teams find themselves stretched thin, struggling to manage a caseload that requires them to both conduct the investigation and manually execute all inputs, changes, and escalations.
2. They’re always outdated.
   The moment you close a spreadsheet, it’s effectively out-of-date. Why? Because compliance work is an ongoing process, and needs to be done in real time. The spreadsheet is a static environment, unable to absorb new alerts and case updates without that data being imported manually. This means the people doing casework are always working with something less than the complete picture. 
3. The audit trail goes up in smoke.
   This is a big one. What’s the auditor’s motto? If it wasn’t documented, it didn’t happen. Well, try maintaining an accurate record of all of the changes and adjustments made to a spreadsheet in any given year. This red flag waves even harder when you have multiple parties accessing and editing a document. Who made what change, where, and why? Efforts by compliance professionals to track this type of action-history for auditing purposes becomes next to impossible. 
4. You can’t safely protect sensitive information. 
   As with any file that can be downloaded, attached to an email, and distributed, storing sensitive data in spreadsheets poses a significant threat to information security. Sure, you can password-protect a document, but that’s the IT equivalent to an on/off switch. What do you do with the users who need to see some (but not all) of the collected data? With spreadsheets, not only is your data always one step away from public view, your options for controlling what your own internal group can/should see are reduced to an all-or-nothing equation. 
5. Errors are easy to make, hard to spot, and difficult to fix. 
   We’ve all done it. You’ve got several documents and applications open and then – whoops. You’re pretty sure the data you just entered went into the wrong window. But…did it? Depending on the type of input, it can be hard to tell. And if you’ve got multiple parties all making changes to a shared excel doc, finding the error that’s thrown off your results can be as difficult as finding the proverbial needle in a haystack. 
6. Version control is tough, and you can’t run analytics across multiple sheets. 
   There’s simply no good version control solution for spreadsheet-dependent compliance professionals. Working in a cloud environment? Either you break your process out across multiple sheets, or you’re stuck cramming your entire workflow into an ‘all-in-one’ document that can be difficult to manage. Working offline? You’re at-risk of major version-control headaches. And either way, you can’t run analytics across multiple sheets.   
7. Following internal policies becomes a challenge. 
   Compliance and Risk teams depend on self-generated rules and policies to protect the company and the employees themselves. These policies have specific protocols that need to be followed in order to meet internal standards. Without a dedicated CRM or case management system, orchestrating the process for internal policy adherence can be a slow and cumbersome process. Add to that the potential data insecurity of enforcing these rules via email and other data-insecure methods, and you’ve turned your internal policy into its own form of compliance risk. 

Wrap-up

A light at the end of the tunnel.

At this point, you may be ready to throw up your hands in frustration. With so many reasons not to use spreadsheets for compliance work, it’s easy to feel like you’re left without a reasonable alternative.

There is an answer, however. As the field of regtech has developed, more innovative solutions to managing your compliance program have arrived. There are now several regtech companies offering different versions of case management and compliance CRM software. 

(Shameless plug: we think we make a pretty good one.) 

As you embark on your search for a regtech partner, remember that a truly successful case management or CRM solution should be able to offer you the following:

• A thoughtful, clean UI with relevant case information visible at a glance. 
• Alert intelligence and the ability to auto-sort / auto-filter flagged transactions.
• Bulk data import capabilities, with automatic case assignment and automated reporting.
• Simple, direct integration with transaction monitoring, KYC, and other related systems.
• A data-secure work environment with SSO and adjustable permissions profiles.
• Customizable workflows for efficient case escalation and adherence to internal policy.
• Auto-population of SAR fields, as well as direct submission to FinCEN, GoAML, and other FIUs around the world. 

Regtech solutions are designed to give companies something more industry-oriented than a simple spreadsheet – something designed specifically with compliance in mind. Because at the end of the day, compliance is a specialized subject area…meaning your tools should be as well.