How long does Excel have left in finance?

Prospect in Other

Been applying for internship positions and still notice that Excel skills are required. However, I am also noticing many positions asking for programming experience in Python. My question is pretty simple. How long do you all think Excel has left in this industry?

Comments (62)

Sep 30, 2019

Excel = spreadsheets = data in tables = data analysis = insights = value

Based on the above, I think Excel has a pretty strong foothold in the way financial and accountinginformation is organized, analyzed and presented. Maybe Tableau is better for some use cases, maybe Python is better for other use cases, but Excel is overall a generally useful jack-of-all-trades program.

EDIT:

Practically speaking, the difference in computation speed for most use cases is totally de minimus as compared to the time spent by humans analyzing and interpreting the data. (Caveat: other than quantitative data mining where you will have hundreds/thousands of worksheets or gigabytes of data)

A normal office computer can handle a 10 MB Excel file and crunch a bunch of figures in a few seconds, Python wouldn't make a dent in productivity of the average front office banker, corporate banker, accountant, or consultan. As I mentioned, HFT or algorithms are different but they have already moved way past Excel.

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  • Prospect in Other
Sep 30, 2019

Right but excel sheets can be imported into Python and the computation speed is much faster. Then the computations can be re-exported back. So practically, Excel is only useful for seeing the final data which is why I'm questioning how long it will last.

Funniest
Sep 30, 2019

TLDR forever sandlot

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Oct 2, 2019

Faster computation speed is a solution looking for a problem.

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Oct 2, 2019

No, excel has a lifespan of about 5 years or so. The problem is data scale. We are rapidly approaching a data volume that excel can not handle. Excel will likely always have a place in the industry as a data presentation tool, but it doesn't seem like there will be much longer for it being used as an actual analysis tool.

I can run an excel model with a several hundred interlocking formulas and a data table that has 50000 rows and 100 columns and it takes 15 min to update.

I can run a python based model with thousands of interlocking corelation points and an underlying data structure that has 10,000,000 rows and 1,000 data attributes. Not to mention I can write scripts to infer missing data points. All of this can be done in about a second.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

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Most Helpful
Oct 2, 2019

If you need to present sensitivities via a data table with thousands of rows and columns you don't have a good enough grasp on the company / industry / business case / investment to be able to provide ANY sort of insight.

I agree there can be issues with data tables in excel, but that isn't really a function of excel being the problem. Most firms use VPN's to remote into a server. This is the true bottleneck. If I ran the same sensitivities on my PC at home it would be done in a fraction of the time.

Teaching people how to translate their excel models into python, writing the code, running it, analyzing it, exporting it back into excel will never be more time efficient (short of there being a complete shift in education / industry). And education won't shift as long as it isn't applicable to real-world situations. Chicken or the egg problem, the shift won't happen.

Sure there will be niche fields requiring more in-depth manipulation of massive data sets that will benefit from Python. But in terms of changing FO finance? No shot.

Even Tableau, which currently has quite a considerable amount of traction in the Fin Services space, is borderline useless for most of what I do...

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Oct 3, 2019

In what world are bog standard professionals working with bog stand financial statements ever going to need to analyse data sets with 1000s of different data points? Please do tell.. because I'm really not picturing this at all.

I'd agree if you want to run correlations or look at alternative data but how many people in corporate finance related roles are really ever going to need to do that?

Sep 30, 2019

The thing about programming is that it requires clean data in, otherwise you have to rewrite your script every time to fit the data going in. Which would be fine, but have you ever seen a dataset from a company?

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  • Prospect in Other
Sep 30, 2019

Lol fair point I've seen people have to clean the data up manually and it is no fun at alll.

Sep 30, 2019

Hi. Some 2 cents on my experience. I have experience in coding with MatLab (specifically portfolio mgmt) and Python 2, but my skills are not utilised at all, while my colleague who can work around VBA is praised for his "impressive work". I think although demand for programming languages is increasing, Excel will always be the basis to all sorts of work and databases. The industry is moving fast, but not that fast. Note that the more senior the person is, the more likely they are willing to stick it out with Excel instead of migrating to another programme.

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Oct 2, 2019

Excel is king

Oct 2, 2019

python is more built for data that's unstructured or just quite large in volume.. neither of those things is true for the information that people in financial roles deal with (at least on the company side).

also excel's just extremely mature now - hard to move away from an application that is so ubiquitous with white collar work.

Oct 2, 2019

Python is for large data sets. Sometimes you just need to produce a quick and dirty analysis from multiple sources. Excel will always be the software to make it happen

Oct 2, 2019

python doesn't have the same user interface as excel for manually inputting, organizing and manipulating data.

sometimes, it is faster to do this stuff with data manually. if it will take you 2-3 days to write python code to figure something out (but it will be reusable)....or 2-3 hours in excel...and your boss is waiting for an answer NOW....which path will you take?

right now, the answer is obviously excel.

if somebody integrates python with excel, to either replace, or sit side by side with VBA...that would be cool. Or, create an excel equivalent for python.

just google it...you're welcome

Oct 2, 2019

Excel will never go away... Honestly. It does it's purpose. The funny part is when I went to go JP Morgan's credit trading desk in NYC, the traders were still using excel for pricing, just like my prop trading firm and yes, this is in 2019.

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Oct 2, 2019

That's because the pricing models developed by the quants have historically been built in excel over the past 20-30 years. Excel in trading is bloated with multiple custom plugins/add-ons. It would probably make sense to re-write everything in Python but that would be a massive undertaking. I think the big banks even resisted upgrading to the latest version of Windows/Excel for the longest time because it would interfere with the plugins, but were forced to when Microsoft said they wouldn't support any more security updates in XP/legacy Excel

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Oct 2, 2019

You hit it spot on.

Oct 2, 2019

The transitioning is happening Goldman for example has put a ML dev on many of their trading desks whose sole job is to write new models in Goldmans own language. I am pretty sure it is some fork of python but has highly customized toolkits and other bundles of scripts that make it damn near impossible for a dev to move to another shop and take the GS advantages. However this might be too little too late for GS, rumors are spreading that they have a really toxic ballance sheet right now.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Oct 2, 2019

You two are talking about two separate topics, just an FYI, to avoid the debate.

Oct 2, 2019

In real estate, I could see Argus continuing to grow for office and retail and perhaps cut Excel out entirely, but multifamily development modeling is so easy that I couldn't imagine the need for advanced coding. There are some extraordinary excel models in real estate that are already way too advanced for what they're used for.

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Oct 2, 2019

AI and ML are coming for CRE models. It is comming fast as well.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Oct 2, 2019

I'm fine with that. I also know that there are high flying executives that still can't use Excel, much less will be comfortable with AI telling them if they should invest their own net worth in a deal or not.

You don't particularly need advanced machine learning to do real estate math either. I'm happy for a machine to do my underwriting for me, but me checking that machine's work will be no different than me checking an analyst's work other than perhaps the assumption of correctness.

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Oct 2, 2019

i built excel models in 2011 at a BB...based on an excel model i built in 2006...and they are still being used today.

just google it...you're welcome

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Oct 2, 2019

Excel has been around long since before you were even born and in this industry it's not going to be replaced by anything. Why? Because IB is a client service business, and as long as clients aka the world is on Excel, tough luck dreaming about Python.

Oct 2, 2019

Not going to be replaced by anything you say? Funny, that's what the pen and paper guys said in the 70's. People have a really interesting confirmation biasis.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Oct 3, 2019

It's generational. Had MDs in banking who used paper then Lotus 123 then Excel. If a more efficient product comes out that a reputable bank (this def matters) adopts and word spreads (it will), then some kind of migration will inevitably happen.

On another note, if MSFT ceo Nadella continues to innovate and move forward the office suite, maybe not who knows.

Oct 3, 2019

Not sure about finance but as for accounting, Excel will never go away. I've worked in small, medium, and F500 companies and all of them used excel extensively.

For accountants, it is how we show our work and report information.

Oct 3, 2019

I think more front office jobs will be more math and coding focused, or at least more companies will have "tech guys" who know how to use Python et.al.

What you will see and I have seen is that industries which were more creative, such as advertising and print media, use excel more. My wife recently switched from print to digital and even content creators have to use excel now, where as Don Draper never had to do this, today's Don Draper or content company will.

Also, all these folks with high autistic traits generally aren't the best with people skills, a sector that is here to stay. Although anyone rare enough with both is going to do very well.

Oct 3, 2019

I'm in ER and I can tell you with a high degree of certainty that Excel will remain prevalent for the foreseeable future. Python is becoming increasingly relevant but the two aren't mutually exclusive. In fact, they are complementary to one another esp. when it comes to scalability of analytics on large datasets. But modeling is a cellular exercise and python is object based so it'll never be just one or the other, in my view.

  • $billy
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Oct 6, 2019
Comment

just google it...you're welcome