ClusterSeven provided Shawbrook with a centrally deployed platform for the management of business-critical spreadsheets, a key element of bank’s strategy to build and strengthen its model risk management capabilities.
By reducing the burden on the bank’s operational risk management team, the solution has enabled Shawbrook to gain oversight and automate controls over their spreadsheet models, meeting regulatory demands.
Shawbrook extensively uses spreadsheets and other EUC applications to develop business-critical processes and models used in the day-to-day operation of the business. Their operational risk team required central, automated oversight of all of these major spreadsheets and EUC model in order to meet the various demands of regulators.
The bank found that their current model risk management capabilities, relying on manually checking and approving their EUCs, spreadsheets and models was time consuming, inefficient and did not mitigate risk effectively.
The challenge was therefore to find a way of automating & streamlining the process of checking these files, whilst providing the necessary detailed audit trails to satisfy the needs of regulators.
Head of Operational Risk at Shawbrook Bank Limited, Donna Bradley, comments that “many of our business-critical models are user-developed applications in Excel, which fall outside of the scope of IT and other enterprise systems. Excel offers tremendous benefits for collating, reconciling, manipulating and summarizing key data, but due to a lack of controls, there is a risk of critical structural changes to macros and links going undetected and passed into production.”
“Manually monitoring changes in these complex models is impossible, and spreadsheet errors can potentially be extremely costly to our organization, both financially and reputation wise,” Donna elaborated. “With the pressure of regulation and demands for auditable model governance, automating spreadsheet management is the only conceivable way that we can comply and mitigate spreadsheet risk.”
Our solution non-intrusively manages Shawbrook’s most business-critical spreadsheets to minimize operational and reputational risk, by providing a central, non-invasive management platform.
It provides the bank with automated audit trails that highlight when and what changes have been made by individuals in their high risk applications. This allows the operational risk team, whether owners reviewers or senior managers, oversight of every detail of their spreadsheet files – right down to specific cell or formula changes.
Hosted within the bank’s infrastructure, the platform is a key element of Shawbrook Bank’s strategy to build and strengthen its model risk management capabilities.
- Reduced the burden of manual model validation on the bank’s operational risk team. Due to the availability of the history of changes to models with our solution, the team is undertaking less frequent validation of the models to demonstrate compliance to regulators.
- Enabled strict enforcement of spreadsheet and EUC policy among users. Each spreadsheet is risk checked against a configurable set of rules to ensure that none have been broken, ensuring consistency, accuracy and integrity of all spreadsheet-based models.
- Mitigated the regulatory and operational risk of uncontrolled spreadsheets and EUC applications, whilst enabling the efficient compliance with regulations.
“Shawbrook Bank is realistic about the fact that user-built spreadsheet applications will always be a key tool in business operation,” Henry Umney, CEO of ClusterSeven commented.
“Rather than trying to limit its use in favor of other enterprise systems – an exercise that often fails – Shawbrook have taken a strategic approach to spreadsheet management for the benefit of users who need the flexible functionality of Excel to perform their day-to-day activities. In doing so, this delivers against the needs of users without putting the bank at operational, regulatory, financial or reputational risk. In fact, most regulations today are demanding that financial institutions adopt demonstrable spreadsheet management in recognition of how widely Excel is used in business.”