Python, R, Tableau, SAS…and countless sophisticated software and yet no one can end the love story of Financial Services with Excel. So how come this unassuming MS Office application won our hearts to the extent that it is irreplaceable?
Of course, there is the obvious reason: It is freely available for all, no questions asked, no licenses, no training, no adjustment period. However how many of the free tools, software, applications get this much buy-in? It is not fair to say that people love Excel just because it is free.
Excel users really love using it. They even hate it when MS pushes changes and each time user experience is negative and it takes a long time for users to make the most of new functionality. I remember when MS launched Excel 2007 with the ribbon functionality. It was a major change from the classical Excel with simple menu structure: Edit, File, View… to bunch of things lumped into few ribbon categories. It took a lot of time and training to get used to the new look and functionality and even locating common functions took a long time getting used to.
So why are users so resistant to change? Why cannot they even open to a better version of Excel?
Because Excel is a core Financial tool for most. All reporting, data analysis, financial analysis, planning, historical data, balance sheet…you name it is done every single day using Excel. Asking them to use something else is like asking someone to use another tool instead of a phone. It is an integral part of Financial Services and users are extremely comfortable using it. Moving from Excel to something else will require:
1. Extensive training
2. Inventory of all reports saved in shared drives and personal drives
3. Recreation of all financial and ad-hoc reports
4. Mapping and recreation of all processes
5. Conversion of historical data and reports
I want to elaborate on use of Excel for ad-hoc and personalized reports. This is quite important, because individual users often create their own reports using Excel functionality and macros which may or may not be replicated using other tools. Imagine a company with 30,000 users, there is a good chance that there will be at least 30,000 personalized reports that need to be recreated using the alternative tool and imagine the amount it will take to make it happen.
These are user related issues that impact adaption of using more sophisticated software. As they say it: if it is not broken don’t fix it:)
Next set of reasons are corporate related. First of all, Excel is cheap! It is available and does not need any training time, effort or funds. It is available globally and can be shared seamlessly.
Secondly its flexibility helps companies save money by not requiring additional tools. Reports written in Excel can be read by anyone without any special software purchases. Excel is also a solution to many expensive tools. You can use Excel in lieu of many tools to prepare charts, reports, status updates, project plans, analytics… you can pretty much turn to Excel and come up with a creative solution without a cost. It may not be the best solution but it will do the job.
Finally love of Excel comes from the strict regulations of Financial Services regarding data sharing and data security. Data has to be shared only with authorized personnel and access to databases should be restricted. List of all personnel who has access to data has to be provided to Internal and External auditors periodically. Excel gives an opportunity to share data without disclosing sensitive information. Data owners can easily remove sensitive information before sharing Excel files and will not need to grant access to the databases for most end users.
Whatever the reasons may be Excel is a beloved tool for Financial Services and we do not expect it to go anywhere soon. We encourage everyone to become proficient in Excel and be creative in ways it can be used to solve everyday data problems. Once you know how to make the most of it, you may also become a huge fan!