Another day at your SME lending business. Pour the coffee and fire up Microsoft Excel, right?
Although it might be the standard for many lenders, if you are using Excel to manage any part of your digital lending process, you’re making your job much more difficult (and less profitable!) than it should be.
Excel is familiar, easy to learn, and can display information in a digestible format. However, it simply does not have the capability to leverage the power of big data. Once a science fiction dream, big data now impacts our daily lives in most of what we do—especially how we lend and borrow money.
Cloud-based SaaS lending platforms do have the power to examine how data is connected, by cross-referencing and building a cohesive story of data, rather than a snapshot. To be competitive, build revenue, and attract more customers to your SME lending business, you need the right tool—a powerful SaaS lending platform.
Not sure? Here are five reasons why Excel lending spreadsheets need to go the way of the abacus.
1. Your Employees Probably Don’t Like Excel Spreadsheets
If an employee says they love Excel, at the very least you should be suspicious of their declaration.
The truth is, the only person who loves Excel is an Excel master. While many people say they are proficient, the number of true Excel masters is significantly lower than you anticipate. A requisite for most corporate resumes today, many users overestimate their mastery of the complex functions of Excel.
Almost every employee has been tasked with providing a report for stakeholders and then spent hours attempting to reverse-engineer a single spreadsheet to display the requested data using Excel. Creating unique, robust reports intended to address the specific interests of each stakeholder can quickly become a tedious, inefficient, full-time job.
This leads to frustrated, unempowered employees.
2. Difficult to Analyze Data
Yes, Excel can be functional to store and analyze data in small volumes (up to a million rows, in fact). It can also be useful to track payment history or calculate fees.
But using Excel for true data analysis? It was never designed to process data on the scale that SME lenders need. The applications of Excel within today’s business world are pushing the very limitations of the program itself.
Making multi-million dollar business decisions requires looking at data from multiple sources (Excel does not have the functionality to link source data), cross-referencing data points, and providing a great deal of visualization. Without these functions, it is difficult to be confident in decisions that carry such weight.
3. Clumsy for Collaboration
Excel spreadsheets used to be static documents accessible only on one user’s computer. With the evolution of the cloud, Excel spreadsheets can now be live documents, where multiple users collaborate, make edits, and share real-time updates.
This sounds like a positive vote for the program, but there are three reasons why collaboration and Excel just don’t meet the needs of SME lenders.
Increased Human Error
The larger a spreadsheet, the more errors within. It’s not a matter of if there are errors within a large Excel database; it’s a matter of where they are. In 88% of all spreadsheets, there are 1% or more errors, which can be one of three types:
- Mechanical (an incorrect number).
- Logical (an incorrect formula).
- Data omission.
Several famous costly blunders (like the misalignment of Excel rows for TransAlta that cost them a whopping 10% of their entire year’s worth of revenue) were made with just one click or copy/paste function.
Who Changed What?
Because of the nature of Excel, where formulas are extrapolated across rows and rows of data, one change can drastically change an entire spreadsheet.
Without knowing who changed what, or when, it’s terribly difficult to revert an error. Yes, you can track changes in the cloud, but the experience requires a significant effort and leaves a lot to be desired. The more data you have, the more difficult it becomes to figure out what change was made, by whom, and when.
Potential for Data Loss
One simple “cut-and-paste” function carries a weighty consequence.
It’s extremely easy to accidentally select a column or row and delete it, or forget when something has been cut, leading to more costly errors. Even with a proper backup, the high propensity for errors, lack of an audit trail, and the inability to assign roles for individual users means Excel is a risky tool for lenders.
Merging data is another problematic area, because when spreadsheets are consolidated, the end user typically has to summarize and collect data, and properly format it all before ever combining the files.
4. Security, Security, Security!
Excel and…fraud?
Unfortunately, Excel is not known for its security. It’s very easy to sneak in a hidden row or column of code or add a false formula. Sure, Excel allows password protection. As an SME lender who may utilize Excel to store some of your customer’s most sensitive data, relying on this level of protection is like leaving your house key under a large, conspicuous fake rock in plain view on the front porch.
Remember, cybercriminals are savvy.
Your cybersecurity techniques need to be advanced. A SaaS lending platform like Onyx IQ has built-in functionality to anticipate and detect nefarious intentions. These platforms protect your information from loss, unauthorized access, and destruction through firewalls, encryption, access authorization controls, and secure data backups.
5. Requires Manual Labor in an Automated World
Many SME lenders go with Excel because of its low cost. When you consider the risks brought by error and security issues, is the low upfront cost a benefit in the long run? The manual labor, lack of efficiency, and likelihood of errors mean you could be paying more than you think.
If Excel is the only software you’re using to manage your SME lending business, you might feel like you’re doing the responsible thing, by keeping overhead costs low. However, you’re losing potential deals because of the time lost in managing data inefficiently and the lack of cross-referencing—and you’re potentially losing deals due to error.
Will a cloud-based lending platform cost more upfront? Absolutely. However, your lending business will likely realize profit far beyond the initial investment because of gained efficiency, security, and clearer business insights, which lead to more educated large-scale business decisions.
Excel vs. SaaS lending platform? There’s no contest.
There’s a Better Way With Onyx IQ
Excel is not an inherently bad program. It has incredible power when used for a limited purpose.
SME lending operations are different. SME lenders are utilizing Excel and pushing its limits, resulting in financial losses and a substantial waste of time, resources, and revenue.
There’s a better way.
Onyx IQ was built for digital lenders, to help you automate every aspect of your business and get a clear view of your entire workflow with just a few clicks.
Schedule your demo today to see what a powerful SaaS lending platform can do for your lending business.
