MUFG Securities - ClusterSeven
Mitsubishi UFJ Securities

MUFG Securities reduces spreadsheet risk and improves compliance with ClusterSeven technology.

MUFG Securities recognized the importance of implementing a comprehensive EUC and spreadsheet governance framework to support the rapid expansion of their business. After scanning their network they found a large number of files relied on for critical business processes.

Our solution was implemented within a 5 week period, leaving MUFG with an efficient and repeatable process for the management of their EUCs. This has delivered long term benefit in the total cost of ownership of the technology, with less wasting of time on manual processes.

Case Study

The Challenge

Experiencing rapid expansion, MUFG Securities needed to improve spreadsheet control to assure the safe growth and support of the business. With our technology it implemented an efficient, repeatable process to manage spreadsheets, reduce operational risk and gain practical feedback on potential risk.

“Spreadsheets have been an integral part of business processes for two decades,” outlines Gartner in one of their analyst reports. “Although there have been a number of well-documented multi million-dollar losses related to spreadsheet manipulation and accidents, only recently have user-developed applications been seen as an area that requires higher levels of control.”

Forward-thinking organizations such as MUFG Securities recognize the importance of spreadsheet control and are always looking for ways to implement best practice.

Don Simpson, Managing Director of Operations and Technology, MUFG Securities, says that “spreadsheets are ubiquitous. They’re increasingly a vital part of our fabric and just as important as some of our big ticket, large systems. We just wanted to manage our spreadsheets. Not stop their usage, but facilitate it in a controlled manner.”

Compliance is a major driver for addressing spreadsheet management. “Regulators are very powerful these days. The requirements set by the Financial Services Authority (FSA), together with Sarbanes Oxley (SOX), were a strong source of motivation,” explains Don.

Internally, MUFG Securities undertook analysis to uncover the extent of its problem. “We scanned network servers to find out how many spreadsheets we had – it amounted to thousands across the company. We then focused on the critical ones. It’s surprising how many critical-business processes rely on, or are controlled by, a spreadsheet at some point,” says Don.

In order to successfully manage its spreadsheet environment, MUFG Securities required a demonstrable control framework to support the trading of complex products. In addition, better risk management policies were necessary to comply with best practice as required by the FSA. Having identified and measured the scale of the challenge it faced in taming its spreadsheets, MUFG Securities contacted Microsoft for assistance and was directed to ClusterSeven.

The Solution

The deployment of the technology solution was a smooth process. After 20 days of consultation to identify the critical spreadsheets, it took just five weeks and a team of two to implement the solution. MUFG Securities went live with our software platform in July 2006.

Our software logs all changes at cell level, creating an online picture of spreadsheet evolution. It applies a layer of integrity rules, highlighting errors relevant to a specific user. It can then build the collected data into a ‘movie version’ of the spreadsheet. This creates a validated information source that can be used elsewhere in an organization.

As the primary risk mitigation environment in a trading business, product control was the first concern and formed the initial area of focus for the spreadsheet management project.

Don explained that MUFG Securities “now have our spreadsheets being monitored and managed. We can audit changes, control and check that things that should be altered are altered. Everyone focuses on things that shouldn’t change, but you also have to look carefully at the things that need to be changing.”

By improving the product control process, productivity increases, users know that when disparate spreadsheets are consolidated they will be effectively managed. Knowing that the system will highlight general spreadsheet malpractice, users are more conscious of error – the solution promotes spreadsheet best practice.

The system helps meet SOX requirements by ensuring spreadsheets have adequate controls in place to encompass change control, access rights and basic documentation including user manuals and version control.

The Benefits

ClusterSeven’s technology enables businesses to manage their End User Computing (EUC) applications (spreadsheets, MS Access® databases etc.) for compliance and reduced operational risk by:

  • Locating business critical files.
  • Applying risk assessment criteria.
  • Applying appropriate security to these files.
  • Maintaining a continuous audit check on files.
  • Notifying anomalous activity via alerts and exception reports.
  • Delivering enhanced productivity and new business insight.

MUFG Securities now has an efficient, repeatable process for spreadsheet management. The team is working its way through the organization and is in broader discussions about the implementation of the technology in other parts of the business and international locations, including Japan.

Don concludes, “With ClusterSeven technology, there has been a reduction in risk factors and we see fewer problems and delays. The rationalization and control of spreadsheets shortens the time of long processing chains such as risk and profit and loss calculations for very complex derivative products. We’re beginning to see the long term benefits in total cost of ownership. The focus is less on waste and more on getting things right first time.”

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