In the world of cybersecurity and third-party risk management, spreadsheets have become a popular tool. Institutions often use them for tasks such as tracking exceptions from audits, managing access rights, and conducting risk assessments. Despite their frequency of use, spreadsheets pose significant risks when used for these critical processes. In this blog, we’ll explore the inherent risks of spreadsheets and why transitioning to automated workflows is a smarter choice for managing cybersecurity and risk.
The Widespread Use of Spreadsheets
It’s clear why spreadsheets are so common in financial institutions. They are readily available, easy to use, and require minimal training to implement. For many banks, spreadsheets provide a quick and cost-effective way to organize information. Tasks like creating a checklist for an upcoming audit or tracking employee system access permissions feel like they can be managed within a spreadsheet. However, as processes and data needs grow more complex, the limitations of spreadsheets become glaringly apparent.
The Risks of Using Spreadsheets
While spreadsheets may be convenient, their use in managing critical processes introduces several challenges and risks:
- Manual Processes and Human Error
Spreadsheets require manual data entry and updates. This reliance on human intervention increases the likelihood of errors. For example, if one spreadsheet is updated to reflect changes in access rights, others linked to it must also be manually synchronized. A missed update can result in discrepancies that compromise decision-making or regulatory compliance.
Manual updates also introduce a risk of oversight. If someone forgets to adjust a specific cell or tab, critical data may become outdated or inaccurate, potentially leading to compliance violations or operational inefficiencies. - Inefficiency and Labor Intensity
Managing information with spreadsheets is labor-intensive. Teams spend countless hours updating, cross-referencing, and validating data. This time could be better utilized on strategic initiatives that drive value for the institution. Additionally, the reliance on individual team members to maintain these spreadsheets makes processes vulnerable to delays if key personnel are unavailable. - Increased Risk Exposure
Every additional spreadsheet adds to an institution’s risk profile. For example, introducing a new process, such as conducting a Personally Identifiable Information (PII) assessment, often means creating yet another spreadsheet. As the number of spreadsheets grows, so does the complexity of managing them, increasing the likelihood of errors and oversight. Moreover, sensitive information stored in spreadsheets is often less secure, making it vulnerable to breaches. - Lack of Automation
Spreadsheets lack automation; meaning updates in one area don’t automatically communicate to others. This creates inefficiencies and increases the risk of data inconsistencies. For example, if regulators introduce a new requirement, institutions must manually update all relevant spreadsheets to incorporate the new process. This not only takes time but also leaves room for error.
Real-World Scenarios Highlighting Spreadsheet Risks
Consider the following scenarios that illustrate the risks associated with spreadsheet use:
- Access Management: Your team uses a spreadsheet to track which employees have access to specific systems. A team member updates one spreadsheet but forgets to update another. As a result, outdated access rights remain active, creating a potential security vulnerability. And, as we highlighted in a previous blog, as application risk, system sprawl, and interconnectedness have evolved, this manual format has become increasingly impractical.
- Regulatory Compliance: Regulators introduce a new requirement for conducting PII assessments. The institution creates a new spreadsheet to track compliance but struggles to integrate it with existing workflows. This leads to delays in meeting regulatory expectations.
- Audit Preparation: As teams begin preparing for an audit, they must consolidate data from multiple spreadsheets. While manually consolidating information, they inadvertently leave out critical information; leading to unfavorable audit outcomes.
The Case for Workflow Automation
To address these challenges, institutions must transition away from spreadsheets and adopt workflow automation tools. These platforms offer several advantages:
- Streamlined Processes
Workflow automation eliminates the need for manual updates by centralizing data management. Streamlined processes, ensure consistency and reduce the risk of human error. - Single Source of Truth
With workflow automation, data lives in one place. Updates made in the system automatically propagate across all relevant areas, eliminating discrepancies and ensuring accuracy. - Time and Cost Savings
Automation reduces the time and labor required to manage processes, freeing up resources for higher-value activities. This can lead to significant cost savings over time. - Enhanced Security
Automated platforms often include built-in security features, such as access controls and encryption, to protect sensitive data. This reduces the risk of breaches and ensures compliance with regulatory requirements. - Scalability
Unlike spreadsheets, workflow automation tools can scale to meet the growing needs of an institution. Whether it’s integrating new regulatory requirements or expanding operations, these tools provide the flexibility to adapt without introducing additional complexity.
How Workflow Automation Works
Workflow automation platforms are designed to handle tasks related to information security, cybersecurity, governance, and third-party risk management. These tools:
- Centralize Data: All data resides in a single platform, ensuring consistency and accuracy.
- Automate Updates: Changes made in one area are automatically reflected across the system, reducing manual intervention.
- Simplify Reporting: Automated reporting features make it easy to generate insights for audits, risk assessments, and compliance checks.
- Improve Accountability: Built-in workflows ensure tasks are assigned and completed on time, reducing reliance on memory and individual effort.
Moving Beyond Spreadsheets
Transitioning from spreadsheets to workflow automation requires an initial investment of time and resources, but the long-term benefits far outweigh the costs. Institutions that embrace automation can:
- Improve efficiency by eliminating redundant processes.
- Enhance data accuracy and security.
- Reduce labor costs and free up resources for strategic initiatives.
- Mitigate risks associated with human error and data inconsistencies.
Make this year the year you delete the spreadsheet
If you and your team are ready to move away from spreadsheets, we’d like to show you our Governance 360 solution. Contact us today.
