Breaking the Excel Barrier: Why Banks Need a Proactive NFR Strategy

The world of banking is a high-stakes game of risk management, and yet, some of the biggest risks don’t come from cyber criminals or market crashes. They come from something far more mundane: Excel spreadsheets.

Risk professionals spend their days tackling threats, but many struggle to fully address the silent vulnerabilities hidden within spreadsheets – off-system calculations, manual data entry errors, and disconnected workflows. These issues are well understood, but without effective governance, they remain persistent contributors to non-financial risk (NFR) – a top priority for regulators and boards today.

Take CPS 230 in Australia and PS6/23 in the UK as recent examples where regulators are no longer giving banks the luxury of reacting after the fact. They want risk managed before problems arise. And that means spreadsheets need to come under the microscope as part of a broader NFR strategy.

Why Excel is a Silent Risk Multiplier

Excel is the financial industry’s best-kept worst secret. It’s fast, flexible, and familiar – but that same flexibility makes it a breeding ground for operational risk. Consider:

• Hidden Errors: A single unnoticed formula change can alter financial models, corrupt data integrity or impact regulatory reporting without a trace.
• Lack of Governance: Banks may use asset registers and platforms like SharePoint, but these methods lack the granular control needed to detect and prevent hidden risks effectively.
• Scalability Challenges: What works for a small team collapses at enterprise scale.

These issues extend beyond Excel itself to how it's managed. Like any powerful tool, Excel requires guardrails. Banks need a more efficient approach to oversee its use, implement controls, and gain real-time insights for effective risk mitigation.

The High Cost of Waiting

While banks recognize the Excel risk problem clearly, most will adopt a “fix it when it breaks” approach – opting for limited or fragmented solutions in the interim and only investing fully when the risk becomes too costly to ignore. Historically, this seemed like the more cost-effective (and less disruptive) route. But in today’s dynamic regulatory and technological landscape, that assumption no longer holds.  

Here’s why a proactive approach to NFR is becoming the smarter, more strategic choice for banks:

• Operational risk losses are substantial: ORX reports that operational risk losses account for billions annually, with spreadsheet failures contributing to significant incidents.
• Shareholder trust is at stake: McKinsey research highlights that NFR incidents have a greater impact on total shareholder return (TSR) for financial services firms compared to non-financial services firms.
• Regulations are becoming more stringent: Recent mandates like CPS 230 (Australia), PS6/23 (UK), and DORA (Europe) require systematic controls over spreadsheet-based processes and fragmented data management.
• Technology is transforming risk management: AI and automation are enabling banks to shift from reactive controls to proactive, real-time risk oversight – helping them manage compliance head-on without sacrificing efficiency.

Why Traditional Fixes Fail

Not all solutions set banks up for long-term resilience. Faced with growing Excel-based risks, many banks will turn to traditional approaches to get their spreadsheets under control.

From manual frameworks to complete system overhauls, these solutions promise compliance and control. Yet they consistently fall short of delivering real NFR management, leaving banks still exposed to risk.

The common thread among these approaches?

They either try to control Excel through manual oversight or attempt to eliminate it entirely. Neither works because Excel isn't going away - it's too embedded in how banks operate, and manual controls simply aren't effective. What's needed is a way to make Excel-based processes more controlled and transparent while preserving the flexibility that makes Excel valuable.

How Coherent Spark Enables Modern NFR Management

Banks don't need to choose between Excel flexibility and risk control. With the right technology, they can have both. That's where Coherent Spark comes in.

Coherent Spark transforms Excel from a liability into a controlled, strategic asset.  

Fast to deploy and cost-effective, our platform is a scalable, AI-driven alternative that integrates seamlessly into existing workflows so institutions can finally monitor, mitigate, and manage spreadsheet-based risk in real time – making NFR strategies more practical and achievable.

How Coherent Spark Works

Coherent Spark enables banks to move beyond outdated frameworks by enforcing governance, automating risk controls, and providing an auditable compliance trail for Excel-based processes.

Our platform enables real-time, continuous monitoring while ensuring spreadsheet risks are proactively identified and controlled. Here’s how:

• Automated Scanning: Identifies and groups spreadsheets across the organization.
• Detailed Risk Analysis: Highlights potential high-risk spreadsheets, uncovers VBA and security vulnerabilities, duplicated models, and shared data usage.
• Embedded Controls: Banks can apply and enforce policies within spreadsheets – locking down inputs, applying access controls, building enforceable process flows and preventing unauthorized modifications.
• Automated Audit Trails: Every change is tracked, ensuring full transparency and compliance evidence.
• Proactive Alerts & Reporting: Instant notifications built from the embedded control framework ensure risk teams can intervene before issues escalate. Periodic scans also allow identification of any new risk areas and gap assessments against any new policy or regulatory requirements.  

By embedding Coherent Spark into their NFR strategy, banks gain the first truly scalable way to govern spreadsheet-based processes without sacrificing agility. And because Coherent Spark builds on existing Excel investments rather than replacing them, it delivers immediate value and maximizes returns over existing sunk costs.

From Compliance Burden to Strategic Advantage

Banks that take a proactive, technology-driven approach to managing Excel-based risks will gain a competitive edge – reducing penalties, improving operational efficiency, and reinforcing stakeholder confidence.

The choice is simple:

• Wait for the next spreadsheet-driven regulatory fine – or fix the problem now.
• Keep using band-aid solutions – or adopt a scalable risk management system.
• Spend millions on a replatforming project that takes years – or deploy Coherent Spark for a fraction of the price in only a few months.

The winners in banking aren’t waiting for a compliance crisis to force change.

They’re taking action today.