Stress testing with Excel? Use Schematiq for greater control and faster results!
Many financial services firms rely on Excel for Stress Testing as it provides a simple, convenient way to run models and consolidate results across the organisation for flexible report configuration.
However, there are several challenges that banks face when using Excel for stress testing, which can all be alleviated using Excel with Schematiq. These are:
Data management: Excel is not designed to handle large amounts of data meaning it can be challenging to manage and manipulate data in an organized manner. When using Excel with Schematiq data can be easily accessed from all of an enterprise’s data sources without memory or range limitations and no VBA.
Model complexity: Excel models can become complex and difficult to understand and maintain, leading to errors and an increased risk of model failure. Schematiq allows user-defined functions so models can be componentized. The Schematiq table functions allow functions to be applied to tables of millions of rows without having to copy the formula millions of times, massively reducing sheet size and complexity.
Model transparency: It can be difficult to understand the underlying logic and assumptions of Excel models, which can lead to a lack of transparency and difficulty in regulatory oversight. Schematiq design patterns and table functions reduce complexity making worksheets easy to document and audit.
Model limitations: Excel has limitations in terms of computational capabilities and speed, making it difficult to perform complex and comprehensive stress-testing scenarios. Schematiq takes all the heavy lifting away from Excel on the desktop by allowing models to automatically be converted to C# code that will run in the elastic cloud 1000 x faster than on the desktop and 40 x faster than python. The cloud also allows organisations to scale, with concurrent processing for faster answers.
Model replication: Excel models are often built and maintained by individual users, making it difficult to replicate and validate results across teams and departments. Schematiq design patterns allow Excel functions to be defined and shared in a controlled manner as API or stored functions making it easy to componentize spreadsheets and reuse logic.
Model governance: A lack of standardization in Excel model building results in inconsistent model governance and risk management practices. Schematiq introduces version control testing and governance for an organisation’s spreadsheets. User access rights can be set at a project workbook or function level and all of the cloud assets produce a full audit trail when run.
Data security: Excel spreadsheets are vulnerable to data breaches and there is a lack of built-in security features to protect sensitive financial data. Schematiq design patterns for Excel using Schematiq data -links, push data from worksheets to databases which allows a banks enterprise data policy to be applied, greatly reducing the opportunity for data corruption.
Turbocharge your stress testing today with Schematiq.