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Credit Underwriting Spreadsheet Risk

Spreadsheet Risk Within the Credit Organization

April 19, 2021

The humble spreadsheet enables end users to create flexible, easy to use applications that support critical credit underwriting and monitoring processes. However, this ease of use makes them error prone and challenging to maintain. This increases risk for banks using them for independent quantitative assessment. Controlling the use of these spreadsheets within the analytical framework of credit risk is critical in today’s sensitive regulatory environment.

Many individual underwriting units within a bank utilize “home grown” spreadsheets for underwriting. This is true particularly in specialized areas such as real estate, energy, asset based lending and middle market lending. The risk of inconsistencies in the spreadsheet directly impacts the quality of the credit underwriting product.

Unnoticed mistakes in the spreadsheet can migrate throughout the loan portfolio, creating unwanted credit problems. Even the smallest of changes to a key spreadsheet can have lasting impacts that go unnoticed until it is too late. The result is material weakness in the portfolio. As regulators demand increased control and scrutiny of risk, internal monitoring solutions may not be the answer.

An important facet of regulatory compliance is knowing what the risks are within the organization. Tracking and monitoring spreadsheets within a particular group or organization can be a challenge for existing internal examination resources. As regulatory compliance remains an important part of the bank’s overall risk management architecture, Apparity can provide a potential solution.

Risk Management Solution

Apparity addresses this risk in the organization

Apparity is a fully integrated software that enables financial institutions to identify, assess, and control their critical spreadsheet risk. EUC risk is safely managed while ensuring end users focus on their job of properly underwriting and managing credit risk.


How does the product work?

  • Identify all spreadsheets and EUCs in your environment
  • Assess each file to determine complexity, risk, and involvement in critical company processes (e.g., Sarbanes-Oxley)
  • Build a centralized inventory of critical EUCs, providing full visibility and auditability
  • Determine EUC control requirements through configurable questionnaires
  • Apply file-level access, version, and change management controls to spreadsheets supporting critical processes
  • Determine spreadsheet integrity to support best practices and identify & fix potential errors

How has the product been received?

  • Apparity ranked the #1 EUC Governance solution by industry maven Bloor Research
  • Net Promoter Score is 80% than the industry average

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Harlan Hill

Harlan Hill is Founder and CEO of Hill Financial Education, which specializes in bank training programs. Prior to establishing Hill Financial Education in 1997, Harlan was Manager of Bank One Corporation's Commercial Banking Education Development Group, responsible for executive course development and teaching corporate wide credit and marketing education programs to relationship managers and credit underwriters at Bank One, which was subsequently acquired by JP Morgan Chase Bank.

Harlan has delivered comprehensive financial education programs for private clients in the Far East, Europe, Australia, and Africa, as well as numerous domestic programs for major international banks and investment banks.

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