All startup companies have things in common at the beginning of their lifecycles: There must be at least the founder him/herself, some resources available, and tools to work with. What we all can admit is that those tools are most likely in a form of rows and columns in Excel sheets – especially in the world of finance and investments. Without questioning, this is the most convenient way to start.
However, when the business is growing and practices start demanding consistency, Excel gets more and more complex to maintain and harness for value creation. To assist you in making the decision whether to shift into a full-scale Investment Management System, we have gathered the top 8 reasons why Excel might be limiting your growth opportunities.
#8 Document Storage
In finance, you have loads of different documents which you need to store for a certain period of time. Usually everything goes well to this point, but when you need to fetch information from the past, things get a bit more complicated. With a proper IMS, you can easily find all the relevant documents, which can also be tagged and linked to related customer, portfolio, or transaction – or anything else they relate to.
#7 Importing, exporting and matching data
As an asset manager grows and builds its business, it also establishes more connections and partnerships, such as banks and custodians. However, data between the company and its connections is most likely not in the same format. This can cause a significant amount of manual work to sync the data. A sophisticated IMS can automatically import and export data while converting data into right format.
#6 Usage Support
An Excel sheet can get as advanced as its creator is able to build it. However, personnel and their roles tend to change over time, meaning that the users of Excel change too. This requires a consistent way of maintaining the knowledge, logic and formulas used in Excel. With an IMS you, first of all, don’t need to build everything by yourself from a scratch. Second, you have clear instructions, training and customer support, so the knowledge is always available without you having to take care of the documentation.
#5 Error Sensitivity
The financial industry is about numbers and calculations. Every number in the screen originates from someone’s keyboard, meaning that every number is exposed to human error. Errors are a natural part of human life, but in the investment world they might cause devastating consequences. A software doesn’t remove these errors, but can give notifications and alerts if something seems not right. In Excel, there is no such thing.
Availability-wise there are differences between having a bunch of Excel files and having a complete IMS. Excel allows only a single user to access the sheet at a time, whereas an IMS is accessible for all users anytime. Additionally, the Excel files should be stored somewhere where they are constantly safe but available.
#3 Compatibility and Responsiveness
Excel is broadly compatible with many devices. However, it is not always scalable to various screen sizes and platforms. Software-as-a-Service systems are usually designed to be used with an Internet browser regardless of the operating system, and they tend to fit most of the screen sizes. Desktop, laptop, tablet, mobile… You choose!
#2 Data security and storage
Working in the tightening regulatory environment of financial services, you want to keep your data safe and private while fulfilling the obligation of storing it for a certain period. Hence, you should be careful with local hard drives and mass storage devices as they are prone to interrupts and even breaking down. A full-scale IMS provides you with all the necessary tools for managing security-related issues and lets you define who can access or edit certain information. Additionally, your data is stored with a security-certified hosting partner, where backups and data security services are a normal routine. Instead of worrying data security and storage issues, you can concentrate on your core business.
#1 Audit Trail
Who, when and what? These are the questions to be answered in every regulated financial company in the 21st century. Answering these questions gets difficult if everyone is using the same spreadsheet with equal access rights and without leaving any marks for identification. A sophisticated software works with individual login credentials, which are a base for documenting a full audit trail of the actions made within the system. This way, everything can be traced back to its creator.
When spreadsheets start to feel tight, it’s probably time to consider moving on. Fortunately, this transformation doesn’t need to replace Excel completely: Excel can be a great companion with another system, so you can pick the best from both worlds.
If you wish to hear more about upgrading Excel into a full-scale IMS, please leave your email address below and we will be in touch.