The hidden fragility of spreadsheets and the mounting risk of relying on tools never designed for audit, governance or complexity
Introduction: The global dependency no one wants to admit
For decades, spreadsheets have been (and in many cases still are) the backbone of financial crime risk assessments. They are familiar, flexible, widely accessible and easy to modify. They have become so deeply embedded in risk culture that many organisations struggle to imagine life without them.
But spreadsheets were never designed to support the level of complexity, scrutiny and governance that modern ML/TF/PF risk management requires. As institutions scale, diversify, digitise and globalise, spreadsheets quietly become a growing source of operational fragility and regulatory concern.
The problem is not that spreadsheets exist. The problem is that they now carry responsibilities they were never meant to shoulder. Complex organisations that rely on spreadsheets to manage their financial crime risk and control assessments are simply asking for trouble.
Spreadsheets cannot support modern financial crime risk assessments
A financial crime risk assessment can only function effectively when it is built on a foundation of strong governance. It requires disciplined methodology enforcement, proper version control, integrated evidence management, structured workflow approvals, complete audit trails, clear data lineage and carefully controlled, role-based access.
It must deliver consistency across business units, reliability across jurisdictions, transparency for Boards and defensibility for regulators. While spreadsheets can perform calculations, they cannot perform governance. They cannot enforce a methodology, ensure consistent scoring, prevent unauthorised changes, maintain traceability, support multi-entity consolidation or adapt dynamically to evolving risk environments. Yet many organisations still expect spreadsheets to achieve all of this and are inevitably surprised when the process fails under pressure. It is long overdue for organisations to rethink their tooling for financial crime risk management.
The fragility everyone pretends not to see
Spreadsheets are deceptively fragile. A single overwritten formula or accidental keystroke can undermine an entire financial crime risk assessment without anyone notice. Multiple versions circulate via email. Contributors unknowingly work from outdated spreadsheet templates. Formatting breaks during copy/paste. Links reference old files. Evidence sits in someone’s inbox instead of the control record.
This fragility is often invisible until a critical moment: an audit, a regulatory review, a Board query, or an internal investigation. At that moment, the organisation realises that its risk assessment is not structured – it is precarious.
Governance fails quietly in a spreadsheet-driven world
One of the greatest weaknesses of spreadsheets is that they cannot enforce governance. Approvals occur through email. Challenges happen offline. Methodology changes go undocumented. Scoring decisions lack a clear explanation and rationale. Auditors find themselves reconstructing decisions from fragments of information. Governance becomes a matter of trust rather than evidence.
In today’s regulatory environment, trust is not enough. Organisations must be able to show how each decision was made, by whom, when and based on what evidence. Spreadsheets simply cannot provide this level of accountability.
The cost of manual processes grows year after year
While the licence cost of spreadsheets appears low, the operational cost can be enormous. Risk teams spend hundreds or even thousands of hours per year chasing contributors, reconciling versions, fixing formulas and assembling reports manually. Entire months are consumed by repetitive tasks that add no insight and create significant fatigue. In short, more time is spent administering the process than managing risks.
As businesses grow – more customers, more products, more channels, more jurisdictions – the spreadsheet model collapses under its own weight. What worked with two business units becomes unmanageable with eight (or eighty). What worked in one country becomes impossible in five. The organisation becomes trapped in manual complexity of its own making.
Technology changes the conversation entirely
Modern financial crime risk assessment platforms solve these problems not by adding new features, but by fundamentally rethinking how financial crime risk assessments should operate. They enforce methodology. They maintain an audit trail of every change. They manage evidence in context. They support multiple entities. They automate calculations. They provide dashboards. They show trends. They reduce human error.
Most importantly, they transform the financial crime risk assessment from a static spreadsheet into a dynamic risk intelligence system. The difference is not incremental. It is transformative.
Conclusion: The longer you rely on spreadsheets, the greater the risk becomes
Spreadsheets are undeniably useful analytical tools, but they are fundamentally misaligned with the requirements of modern financial crime risk management. Their weaknesses are subtle, cumulative and often invisible until they surface in the form of a serious incident or regulatory concern.
Leading organisations recognise these limitations early and transition to financial crime risk and control platforms purpose-built for governance, auditability, scalability and meaningful risk insight. Those that delay modernisation become increasingly exposed – not because their teams lack capability, but because they are constrained by tools that cannot meet today’s complexity or scrutiny. The spreadsheet environment feels familiar and comfortable, but it is also dangerously fragile. The time has come for organisations to step out of that comfort zone and adopt systems that can truly support their financial crime risk responsibilities.
