Introduction
In the world of finance, risk, and compliance there is an uncomfortable truth: most regulatory and operational reports are still produced in complex spreadsheets. Although spreadsheets are flexible and easy to use, their potential for errors and lack of transparency have turned them into a major source of compliance “fires.” Forbes estimates that 88 % of spreadsheets contain errors, and half of the spreadsheets used by large companies have material defects. When regulatory deadlines approach, teams enter “firefighting mode,” hunting for mis‑typed formulas, hidden sheets and outdated versions. This way of working not only increases the risk of fines, it also drains energy from experts who should be focused on strategic analysis and adding business value.
This blog explores how organisations can move from ad hoc spreadsheets to a modern “audit‑ready” reporting approach by harnessing automation, centralised data sources and principles such as BCBS 239. The focus is on regulatory and operational reporting: how to meet the requirements of various authorities while giving management clear insight into operational performance.
Why are spreadsheets dangerous for regulatory and operational reporting?
Despite their popularity, spreadsheets harbour many dangers. Technology consultants warn that in practice they see four types of errors: mechanical errors (mis‑typed data), logic errors (badly written formulas), data omission errors (forgotten rows/columns) and appearance errors (copying data from multiple versions without control). Because of this, the probability that a spreadsheet contains a serious error is about 88 %. In addition:
- There is no real audit trail: changes to cells are not tracked, making it difficult to prove who entered what or why.
- Not scalable: as an organisation grows, the number of sheets and their inter‑dependencies explode.
- Versions spiral out of control: teams often copy files for different requirements (internal reports, regulators, different currencies). The result is discrepancies and multiple versions of the “truth.”
- Security is minimal: sensitive data such as portfolio figures, transactions or client information is often stored in unprotected files.
In operational reporting, spreadsheets are particularly problematic. Operations managers need near real‑time information on inventory, shipments or sales performance to optimise resources. Spreadsheets are not designed for continuous refresh and often arrive too late for decision‑making.
What do regulatory and operational reporting involve?
Regulatory reporting means systematic collection, validation and submission of financial and operational data to regulatory bodies. According to Abacum, reporting covers periodic filings such as reports for the Securities and Exchange Commission (SEC), the UK’s FCA, the US FINRA or the European ESMA. Companies must pull data from ERP, treasury, accounting and risk management systems, consolidate it, verify it and send it in formats specified by regulators. The purpose is to increase transparency, protect the financial system and prevent fraud. Non‑compliance can lead to penalties, bans or reputational damage.
Operational reporting, on the other hand, refers to collecting and analysing data in real or near real time for daily decision‑making. Domo defines it as a process that gives managers timely insights about orders, inventory or work orders so that they can react quickly. Unlike financial reporting, operational reports are often more detailed and focused on efficiency, resource utilisation and tracking KPIs. Benefits include faster decision‑making, better accountability and transparent resource management.
Therefore a “Regulatory & Operational Reporting” solution must address both requirements: fulfilling legal obligations and providing rapid analytics for executives. This entails integrating various systems, standardising data and establishing a clear validation process.
Common challenges in regulatory reporting
The regulatory landscape is complex and constantly changing. Financial institutions and corporations must adapt to different jurisdictions, formats and deadlines. Abacum lists several common problems
| Challenge | Description |
|---|---|
| Data silos and fragmentation | Data sits in different ERPs, treasury systems and spreadsheets. Manual consolidation leads to errors and delays. |
| Manual reconciliations and audit trail | Because the process is manual there is no clear record of changes. Preparing evidence for audit can take weeks and consume entire teams. |
| Global regulatory complexity | Regulators such as the SEC, FCA and ESMA have different formats, reporting frequencies and classifications. |
| High costs and resource constraints | Errors can result in fines, while manual processes consume man‑hours. Teams often suffer from lack of capacity or expertise. |
| Tight deadlines and version control issues | Regulators require ever faster reporting; manual spreadsheets cannot keep pace. Versioned files confuse teams. |
These challenges explain why many financial institutions lose control: instead of strategic assessments, experts are “firefighters” fixing spreadsheets just before deadlines.
BCBS 239: Risk data quality principles and the role of automation
The Basel Committee on Banking Supervision (BCBS) issued principle 239 to improve the banking sector’s ability to aggregate risk data and deliver accurate reports. Principle 3 emphasises that risk data aggregation should be “largely automated” in order to minimise manual errors. Principle 4 requires accuracy and integrity—banks must implement data definitions and controls and minimise errors in transmitting information. Principle 5 stresses completeness—capturing all material risk data at a group level, including different business lines, legal entities and risk types. Principle 6 calls for timeliness, i.e., the ability to generate up‑to‑date reports quickly enough to support decision‑making.
BCBS 239 was originally intended for banks, but its guidelines reflect broader industry trends: regulatory reports must not depend on manual spreadsheets. Automation of aggregation, validation and report generation is becoming the standard without which staying compliant is difficult.
Benefits of automated regulatory reporting
Modern regulatory and operational reporting systems replace spreadsheets with centralised platforms that integrate data from multiple sources, perform calculations automatically and generate reports in the prescribed format. 8020 Consulting notes that automation can reduce report preparation time by 60–80 % and allow teams to focus on analysis rather than manual data entry. One mid‑sized financial firm reduced its quarterly reporting cycle from three weeks to just three days through automation.
Key benefits include:
- Time savings and efficiency – Automated systems pull data from ERP, treasury, portfolios and other sources, validate it and automatically populate regulatory forms. This can reduce manual labour by about 70 % and give teams time for strategic analysis.
- Reduced error risk – Centralised calculation engines apply standard formulas while automated checks identify anomalies before submission. This reduces fines from inaccurate reporting.
- Timely compliance insight – Automation enables real‑time monitoring of compliance; a Deloitte survey cited by 8020 Consulting found that companies with real‑time monitoring detect issues weeks earlier than before.
- Scalability and flexibility – Automated platforms can handle ever‑growing volumes of data without a proportionate increase in staff, enabling firms to respond to growth and new regulations.
- Security and audit trail – Advanced systems offer role‑based access, encryption and detailed activity logs to ensure data confidentiality and integrity. This creates a clear audit trail, greatly facilitating review.
- Integration with operational reporting – Since platforms connect transactional, risk and KPI data, management gains a unified source of truth for strategic and operational decisions.
What does “audit‑ready” mean?
“Audit‑ready” is not just about having a tidy folder; it is the ability to provide complete, accurate and comparable data immediately, with evidence of who entered each piece of information and when. Skematic describes the stress of preparing for regulatory exams, during which teams scour emails, meetings and handwritten notes. Their platform instead automatically captures the details of compliance programmes as activities happen, archives policies, maps requirements and creates a record of tests and exceptions. Most firms on such systems can satisfy auditors’ requests within a few hours, whereas manual reconstruction can take weeks.
Audit‑ready reporting therefore requires:
- Documented process – clearly defined procedures and responsibilities.
- Continuous evidence capture – automated recording of actions, changes and approvals.
- Transparency and accessibility – all relevant data available through roles and permissions, without unnecessary copies.
- Responsiveness to change – a system that tracks regulatory changes and quickly adapts reports.
Adopting an audit‑ready approach protects organisations from fines and reputational hits and gives management confidence that processes are under control.
Designing reports that hold up under scrutiny
Creating reports that will withstand regulatory and audit scrutiny requires a holistic approach. The following suggestions serve as a framework for designing a Regulatory & Operational Reporting solution:
- Adopt a single source of truth – Instead of spreadsheets scattered across locations, establish a centralised data warehouse or data lake where all relevant systems are integrated. This eliminates duplicates and ensures data consistency.
- Automate the entire workflow – Follow BCBS 239 guidelines and implement end‑to‑end automation: from data extraction and validation (rule checks) through calculation engines to the generation and submission of regulatory forms. Introduce automated controls that flag anomalies before submission.
- Establish data governance – Define data owners, quality standards and approval processes. Clear definitions of metadata and terminology reduce misunderstandings and errors.
- Maintain an audit trail and version control – Every change should be recorded: who entered the data, when and why. Use technologies that automatically create audit logs and allow returning to previous versions of reports.
- Integrate controls and security – Build in role‑based access, encryption at rest and in transit and regular access reviews. These controls should align with standards such as ISO 27001 and local regulatory requirements.
- Provide flexibility for multiple jurisdictions – The system should support different report formats (XBRL, XML, PDF), multiple languages and currencies, and allow quick updates to adapt to new rules and requirements.
- Train and empower users – Technology succeeds only when people know how to use it. Provide continuous training, workshops and audit simulations to prepare teams for changes.
Manual versus automated reporting
The following table shows the difference between the traditional spreadsheet‑based approach and a modern automated solution:
| Feature | Manual reporting (spreadsheets) | Automated reporting |
|---|---|---|
| Data management | Multiple isolated files, manual consolidation, no change tracking | Centralised data warehouse; integration of ERP, treasury and other systems; standardised data |
| Preparation time | Weeks of manual entry and reconciliation | Reports generated in hours or minutes thanks to automation |
| Accuracy and integrity | High risk of errors (88 % of sheets have errors) | Built‑in integrity checks, validation and calculation engines reduce the risk of errors |
| Scalability | Every new obligation requires additional sheets and resources | Platforms adapt to increased data volumes without proportionate staff growth |
| Security and audit trail | Limited access controls and documentation | Role‑based access, encryption, detailed logs and versioning |
| Operational insight | Delayed data complicates decision‑making | Real‑time dashboards and analytics enable quick actions |
| Compliance and audit readiness | Hard to prove data provenance; intense pressure before audits | Automatically preserved evidence trails; documents ready for audit in a short time |
As the table shows, transitioning to automated reporting brings multiple benefits, from reducing errors to faster decision‑making.
Best practices for transition
Transitioning from spreadsheets to a modern platform may seem daunting, but the right methodology and partners make it achievable. Here are a few recommendations:
- Assess the current process – Document which spreadsheets you use, which reports you prepare and how much time you spend. Identify bottlenecks and risks.
- Identify priority areas for automation – Start with reports that consume the most time and carry the greatest regulatory risk.
- Choose technology and partners – Explore Regulatory & Operational Reporting solutions that support integration with your systems, meet local and international regulations and offer flexibility. According to Abacum, technologies that provide a single version of the truth and generate an audit trail can reduce manual work by up to 70 %.
- Collaborate with compliance and IT experts – A successful project requires involvement from legal, finance, IT and risk management to define needs and control points.
- Provide training and cultural change – A new platform changes the way people work; it is essential to train users, communicate benefits clearly and reward adoption.
- Establish continuous monitoring – Introduce success indicators (KPIs) to track improvements in data quality, speed of report preparation and reduction of errors. Regularly update systems and processes in line with new regulations.
Conclusion: From firefighting to a culture of compliance
For decades spreadsheets were an improvisational reporting tool. However, the complicated regulatory landscape, demand for real‑time insights and increasing fines for non‑compliance mean that “firefighting” is no longer a sustainable strategy. Data show that most spreadsheets contain critical errors, while automation can reduce report preparation time by up to 80 % and enable firms to detect issues earlier.
By adopting Regulatory & Operational Reporting solutions that integrate data, automate calculations and generate an audit trail, organisations not only meet regulatory requirements but also gain a competitive advantage. Management obtains a real‑time overview, compliance teams work proactively and auditors can easily verify records. Instead of putting out fires, companies can develop a culture of transparency, trust and accountability.
The future is clear: supervisory authorities increasingly favour digital submissions, continuous reporting and integrated platforms. Now is the right time to leave the manual era behind and design reporting that can withstand any scrutiny—today and in the years to come.
