Excel: The Window to Banking Today
Written By Jennifer Woodward
Blinn College
May 5, 1999
Computers and their user-friendly Windows environment have changed the world of banking. Gone are the days of long paper trails and stale information. Banks are now among the frontrunners of technology. Since banking is completely about accounting practices, with the use of software such as Excel transactions are completed swiftly and efficiently. This report it intended to inform readers of advances in the banking industry, specifically in the mortgage division. It should also make the reader aware of past procedures, and techniques of mortgage accounting practices.
EXECUTIVE SUMMARY
The scope of this report is about the impact that Excel software and the Windows environment has had in the banking industry. Many people are unaware of how transactions were handled in the past that is, before windows operating systems, Excel software and computers. Interviews and research about procedures, advantages, disadvantages, and overall impacts will be presented. Also, a prediction about the future of banking will be discussed as I see it. Excel software is truly the window to the banking industry.
B.Storage / Access of information
A. Summary of changes / advances
B. Summary of advantages / disadvantages
Webster’s Dictionary defines a bank as "an establishment that performs financial transactions." Most of us, if not all, have used a bank at some time in their lives for one reason or another. For example when you bought your home or your car you were involved in an accounting operation. An account was debited and another was credited; however this process was one you may not have even been aware of. You were aware of the fact you wanted your transaction completed accurately and quickly and the computer makes this possible. There was a time when computers did not do accounting transactions, they were done completely by hand or by what we refer to as manually.
My report will inform you of how these transactions were done in the past, and how they are being done today. Banks are among businesses that must continue to set the pace for accounting transactions as we approach a cash-less society.
Most computers accomplish the task of calculation and the compiling of information in a form known as a Windows environment. A Window is really just a work area. A computer that uses this operating system is associated with a "user friendly format". This means that the common person should be able to use the computer and navigate fields without knowing program languages or complicated keystrokes. With a simple click of the mouse, fields are formatted and information can be accessed. It is in this work area that applications such as Excel software can be seen in action to help in mortgage accounting. Due to popularity of this operating system most, if not all computers today are running this program.
Before the Windows applications and Excel software there was a world of ledger paper and pencils. I myself recall doing complex calculations using only an adding machine. Needless to say performing operations in this manner left room for a tremendous pile of mistakes. If indeed you did make a mistake, there was the tedious task of locating and correcting your error. This process was not an easy one, if you found the error, you surely had a mountain of corrections to complete because of this one mistake. Correcting mistakes on paper did not allow for calculations to adjust themselves accordingly, as the Excel software does. You had to unravel the work, adjusting and recalculating the end results. Obviously this old way of moving money around to different accounts left not only room for errors, it was downright slow. Information in the banking industry must always be current. Interest rates can change daily, and calculations are not always performed in the same manner from day to day. With ledger paper and pencils there was also the lack of being able to share information quickly. Also, it was difficult for two people to work on the same accounts at the same time. It is here that you can run into the stale information problems, because the day to day numbers game is very important in banking.
When the Excel software was introduced to the banking industry there was a night and day difference in the way we handled transactions. When referring to the introduction of the Excel, I do not mean in the sense of merely putting your check in the bank. I am referencing the behind the scenes of banking, the mortgage departments, student loan departments, consumer loans, etc. These are the transactions that were impacted by the implementation of this software. The user-friendly environment of Excel was a great advance from ledger paper or even the first on the scene, Lotus 1-2-3. In a survey I completed, only 1 out of 5 of my colleagues even remember how to perform manual transactions. Excel has made complex calculations a thing of the past. The software does all the work for you. There are minimal mistakes, and correcting the ones you do encounter is as simple as a few keystrokes. In an industry where time sensitive documents are very important, Excel put us on the way to becoming a front runner in accounting practices.
Speed and Accuracy
The speed of calculations done by the Excel software is almost instantaneous. By the time you type your figures and hit the enter key, the numbers total, add, divide, or change to your specification before you even realize they have. This saves a tremendous amount of time over the paper method. When using an adding machine you must, for accuracy’s sake calculate twice. This can be very time consuming with large batches of figures. By using the Excel software your are assured a correct calculation the first time. The only stipulation to the accuracy of your calculations is whether you entered the correct information. The correctness of the numbers can easily be verified simply by looking at your screen, it is all listed there for you. Furthermore all updates are done in real time, right away so you can share accurate information at the time of input. By remembering that banks are indeed in the service business, they must be able to provide the most up to date, accurate information quickly to their customers.
Everyone can agree that we should conserve paper these days. By using your computer and the Excel software, information is stored on your computer, not in boxes. This way information is easily retrieved by a simple look through a file, not digging through piles of paper. Also, if need be, information can be stored in disk, which is much more easy to look through than any large ledger book. Access to a particular ledger, or spreadsheet as referred to by Excel software, can be done by more than one person at one time. Research is obviously more easily done using Excel software because most files are saved in the order they are entered. Also you can quickly access the last page you worked on by using a shortcut menu rather than flipping through bulky ledgers.
Summary of changes and advances
From paper logs to computer disks we truly have advanced in the accounting aspect of business. Quick is the way we live our lives, and the way we want to do our banking. Software programs have replaced paper as the accounting tool of choice. Keyboards have replaced pencils. All traces of the way we did transaction in the past are almost completely forgotten. Information is relayed instantly and corrections are no more a mess to unravel. Banking has stepped into the 20th century with its head held high.
Summary of advantages and disadvantages
All good things come at a price, in particular the price of a computer system, which is the major disadvantage of Excel software. Banks must spend large sums of money installing a computer system to run their programs on. Also, sharing information with others can be tricky if coworkers do not have similar versions of Excel software on their system. We do, in fact run into this problem quite often at our bank. Not all systems can be updated as timely as need because of the cost. If someone is working in one version it is almost impossible to share information with someone of a different version. However, we can not forget that the advantages completely outweigh this disadvantage. The speed at which information can be accessed, manipulated, and presented is almost without price. Paper is a trouble of the past. Employees can do so much more in such a shorter amount of time that you do not need such a large staff. Employees themselves enjoy keystrokes over pencil pushing, which can even help lower you employee turnover.
As we approach the 21st century there are many indicators of a cash-less society on the horizon. The extinction of the paper dollar is nearing as check cards, ATMs, and credit cards become the preferred choice of exchange. A need for a system to handle these transactions is undeniable. I believe that Excel software is only the first of such operations, as our computer systems become more and more advanced. However, it is undeniable that Excel software has made the path for the next wave of accounting software. Banks will continue to stay a frontrunner on the accounting aspects because their livelihood depends on it.
WORKS CITED
Fabreo, Dennis. Personal interview. 13 April 1999.
Garza, Rolando. Personal interview. 17 April 1999.
Microsoft Excel: User’s Guide 1. Seattle: Microsoft Corp., 1992.
Phelps, Missy. Personal interview. 19 April 1999.
Schumacher, Nora. Personal interview. 20 April 1999.
Wingfield, Terri. Personal interview. 20 April 1999.