When technology makes a leap, people often struggle to navigate the shift. Spreadsheets are a perfect example of this phenomenon.
For 45 years digital spreadsheets have dominated everyday business tasks – from bookkeeping and inventory management to advanced data analysis.
The technology was so good and accessible that people continued to apply it to tasks that it was never designed to tackle, like credit risk management.
However, the overuse of Excel leads many community banks and commercial lending teams to embrace terrible tradeoffs. Let’s explore why and what to do about it.
Two Kinds of Chess
Outside of Generation Z and Gen Alpha, nearly everyone who knows how to play chess learned to play on a physical board with pieces they moved by hand.
Most likely, an experienced adult player taught you the rules. When you accidentally jumped over a pawn with a bishop instead of a knight, they rerouted and reminded you of the movement rules for bishops.
That’s culturally true for nearly all games in history, up to the age of computers. We teach each other how to play and mutually enforce the rules. In reality, you can move chess pieces any way you want, but you aren’t playing chess unless you follow the rules.
The same dynamic applies when managing complex business tasks using a digital spreadsheet like Excel or Google Sheets: The board is open to any move, including unforced errors and unauthorized changes.
Learning to play chess on a computer is a stark contrast. The software knows and enforces the rules. You can’t make an illegal move because that’s a feature of the program. This automated referee system is a blessing – nobody is worried about cheating by illegal moves.
Playing chess on a computer doesn’t make you less of a player. It opens up incredible possibilities that can actually make you better, like playing an opponent in another country. And it allows you to focus on refining your strategy instead of watching for illegal moves.
Like playing chess, the work of a commercial lending officer is highly specialized. Just because you’re using spreadsheets to manage your credit portfolio, it doesn’t mean you’re making costly mistakes today. But when you’re managing billion-dollar portfolios, the risk of human errors can be catastrophic and are unnecessary.
Even though there are platforms that are purpose-built for commercial lending workflows, many teams still rely on Excel because they’ve invested so much time and effort into templates and processes that seem to work. Until they don’t.
Research has shown that 90% of spreadsheets contain errors. This isn’t a failure of skill, intent, or professionalism. When you ask humans to manage a spreadsheet, you’re using an outdated practice that crumbles under the weight of modern business needs.
The best part about the next generation of data management tools (that’s what a spreadsheet is, after all) is that they simplify and automate the tedious aspects. They free you to focus on higher-value tasks like advanced analysis and relationship management, all while lowering the risk of an unexpected ‘Check mate’.
