We have a special feature for you today from Nick Habgood, Managing Partner of private equity firm, Azini Capital Partners. Nick talks about the benefits of end user computer management being fundamental to reducing operational and compliance risks.
More so than in any other industry, the financial sector has always been subject to an inordinate amount of scrutiny, and over the years, we’ve seen it further increase and broaden with globalisation. Today, there are numerous regulations that organisations have to meticulously adhere to – the European Union’s General Data Protection Regulation, CCAR, DFAST, Sarbanes-Oxley (SOX), Solvency II, BCBS 239 and SR 11‑7. Complying with these is a major issue due to their complex and dynamic nature, and non-compliance poses a substantial operational risk to business.
One of the major contributors to operational and compliance risks in financial organisations are end user computing (EUC) applications such as spreadsheets, databases and financial modelling tools. The vast majority of businesses are dependent on spreadsheets to deliver business critical information into financial accounts, the public markets and to the regulators. Often these EUC applications are interlinked and even a single error or discrepancy in one spreadsheet can change a key trade or proliferate across other models and systems, potentially generating losses that could run into millions of pounds. Despite this, these tools are ignored at the organisational level. Many automated disciplines that are routinely associated with third party, enterprise software such as version controls, testing, verifications and so on are seldom applied to EUC applications. Manually undertaking these controls is of course impossible – for instance, its typical for organisations to have millions of Excel workbooks, each with multiple worksheets with millions of cells.
ClusterSeven offers a proven and powerful solution to help organisations analyse, validate and control these business-critical EUC applications. The company is well-placed to help organisations in the financial sector and indeed many other industries such as healthcare and energy to comply with ever-growing regulation and manage the operational risks inherent with their use. Already, ClusterSeven’s customer list is impressive. Its products are used by some of the world’s biggest financial institutions – the ‘who’s who’ of the global financial industry. Clearly, these organisations have undertaken their own independent, stringent evaluations before deploying the solution – and crucially, they recognise the risks these applications present to the business.
Our own subsequent due diligence on the market revealed that the ClusterSeven product suite was mature and functionally-rich. We were very excited by both the future product roadmap and the calibre of the technology team driving the solutions. The team demonstrated a genuine ambition and an articulate vision to where it wanted to get the product offering to. There was tremendous motivation to continue product development from a customer perspective – to make the offering better, easier to use and more applicable to businesses so that they could keep pace with the every-changing regulatory landscape.
As investors, we saw an opportunity to assist the company in accelerating market development. We have made significant headway. Already, recruitment has been made in key roles including a sales and marketing orientated CEO and a full time marketing director. We are investing in additional sales and support resource in both Europe and North America. From a partnership standpoint, we have put in place dedicated support to help ClusterSeven leverage Azini’s relationships with major professional services and other specialist organisations. A great deal of effort has gone into refreshing the company’s branding as well as better formulating ClusterSeven’s proposition, which is truly competitive and convincing.
The results of these efforts are beginning to show and we are encouraged by the progress ClusterSeven is making. The company is well poised to achieve its goals on all fronts and we are committed to supporting the business for the long term.
It’s hard to foresee a scenario where the use of these EUC applications are eliminated entirely, or their regulatory burden reduces. EUC application management is critical in today’s ever-evolving and ever-growing regulatory environment.
Our thanks to Nick for this contribution today.
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