JPMorgan lost $6 billion last year in part due to poor spreadsheet practices, illustrating why financial institutes need better document management programs. ClusterSeven CEO Ralph Baxter told Infosecurity Magazine that for years companies have been telling financial organizations to use solutions that are more secure than spreadsheets, but the warnings have not been heeded thus far.
“I liken it to a transport analogy,” he continued. “Despite all the advice that we should use public transport for the sake of the environment, we still tend to prefer the private car because of the greater flexibility and immediacy it offers.”
He said the same argument can apply to the spreadsheet. Although users find it to be more flexible than the company database, but this is not the case because external pressures such as the rise of enterprise mobility mean companies need to become more efficient, secure and productive.
According to the Financial Times, JPMorgan’s losses were caused in part because spreadsheets were not able to properly calculate risks. According to a report by Vision Critical, more than half of the financial service groups in the U.K. have little to no control over their spreadsheets.