I believe there are three ‘killer applications’ in Capital Markets: Bloomberg, Excel, and Outlook. I’ve talked about Bloomberg/Outlook recently (and the pressure it’s under from industry economics), and of course I’ve shared my views on the evolution of email and Outlook (as the primary application used to interact with email), but I’ve never shared my views on Excel. A recent article in the FT talking about how insurance was trying to solve its ‘addiction to Excel’ spurred me to write something. Move aside insurance, if you really want to know who is addicted to Excel, come visit the capital markets.

Much like insurance, this industry runs on Excel. It’s the original ‘no code’ platform that can do almost anything. I’ve seen it used by the sell side for models, bespoke analysis, contact lists (or a ‘light’ CRM), event registrations, and everything in between. The buy side uses it for all the above, in addition to broker voting, coverage management, and trade reconciliation. Almost every data vendor (including Bloomberg) has a plugin to push data into Excel. From basic formulas to advanced macros, Excel can do it all.

In a very similar theme to Outlook, it’s an application that wasn’t in any way built for the industry, but has become an absolutely essential piece of software in the industry. In the same theme, people aren’t going to stop using Excel any time soon (much like they aren’t going to stop using Outlook or Bloomberg any time soon), but the platform is ripe for evolutionary change. I wanted to spotlight a few ways I’m seeing that change, and some ideas for how it evolves going forward:

• Unlocking data in Excel for analysis: VisibleAlpha (recently bought by S&P) has to be one of the best examples of this, but there are others. Thematically, these firms are focused on ‘unlocking’ the value of data across many disparate (and unconnected/locally stored) Excel files. The use case in VA is unlocking the data in models to build a consensus view that is easily accessible by consumers (especially the buy side). Previously this was only done at a high level across a few metrics (i.e. top line revenue), or manually by anyone interested in doing it themselves. Being able to access all the models meant that VA could provide much more granular insights across various static documents.
• Automating the updating of Excel: there is a new vein of companies that are looking to automatically update your Excel files, taking them from static documents to much more dynamic/connected documents. One of the leaders in this space is Daloopa, with new entrants like Quilt Labs also participating. There are a whole host of other companies in the space, but thematically, these companies are looking to automate the updating of core products like financial models with sophisticated machine learning/AI. The idea is to get smarter about what data is piping into Excel, and removing the manual updating that a lot of teams run into and spend inordinate amounts of time on (especially in research).
• Creating presentations and other outputs from Excel: with the recent acceleration/adoption of LLMs and AI tools, new entrants are emerging that will allow you to easily turn an Excel file into a full visualization and analysis (commentary) presentation. While I won’t mention any specific tools here (many of them are very early), I’ve seen presentations that can take an Excel file, and create both data visualization (i.e charts/graphs) and commentary/analysis of those graphs, by leveraging two different LLMs. A recent article talked about how some firms are building LLMs that can turn Excel and Powerpoint files into S-1’s. Taking raw data (like that managed in Excel) and turning it into the final output is going to be a major theme.

Above are some of the opportunities to make Excel better, but there are also a lot of things done in Excel that likely shouldn’t be. The most obvious of these is where Excel is used to simply manage a collection of data (vs. run any kind of analysis, formulas, or calculations). A great example is any kind of form (such as counterparty data) that is currently an Excel spreadsheet (the term spreadsheet is used very loosely here). These areas represent major opportunities to take workflows out of Excel and move them into purpose built applications. A great example is:

• Making Excel files shareable/accessible: Excel has become an easy way to share data/collect data, in as much as they are a retro ‘form’ a la early 2000’s era. You can send our surveys, collect required information from counterparties, and share team information. A common use case is that many buy side funds share their team contact info and coverage info via an Excel spreadsheet that is updated somewhere between daily and quarterly. When there is a change to the spreadsheet (on the funds end) an updated spreadsheet is sent out to all relevant parties. Unfortunately it turns out that a locally managed Excel spreadsheet isn’t exactly the most secure document (many funds have stopped sending them because they end up in questionable places), as you can’t control access/revoke access. It also turns out to be painful to ingest on the sell side because every Excel file is formatted differently. Full disclosure, we’re working on this.

The above is just an example, and there are a myriad of use cases that will evolve out of Excel into businesses of their own. After all, Excel was the original CRM, but who uses it as one now?

I don’t think Excel is going anywhere any time soon. My view (as shared above), is that we’re going to see a combination of evolutionary and revolutionary changes going forward. Evolutionary changes will make Excel smarter, while revolutionary changes will build new workflows that were traditionally done in Excel in new applications. 

This is in line with what I have been thematically talking about: the coming years in capital markets will continue to see use cases taken out of Excel, Outlook, and (as the sell side is hoping) Bloomberg, and built into specific stand alone applications and new companies. If I were betting on one thing when it comes to workflow changes, it would be that workflows in those two applications specifically (Excel and Outlook) will see a lot of change over the coming years: more tools for the specific job, rather than a hammer for every perceived nail.

But only time will tell – and until then, there’s always Excel.  

Blair Livingston

CEO

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