Some 80% of chief financial officers (CFOs) and financial directors (FDs) have reported a fault with their planning processes when filling their solvency returns for the first time, according to research.
Finance solution provider Accountagility, which carried out the study, said this was due to over-reliance on the use of internal spreadsheets. It said errors had occurred when data is mined and transferred into reporting templates.
Based on a survey of 200 CFOs and FDs in a range of sectors such as insurance, asset management and banking, the study also found 73% of respondents were concerned about their reliance on the use of spreadsheets.
Problems include collecting, manipulating and the analysis of large amounts of data. Accountagility said changes in the finance functions were not matched by the progress of financial technology, meaning companies were still "heavily dependent" on tools that are over three decades old.
Robert Gothan, the firm's CEO and founder, explained reliance on spreadsheets for Solvency II had two main impacts: errors and process inefficiency.
He added firms were spending "too little time" reviewing the data they had created, leaving "errors potentially undiscovered for months to come".
"Given that the Solvency II framework does not contain allowances for either mechanical error or lack of efficiency, the review stage is the most important, particularly for firms who are required to file solvency returns across the EU," he said.
"Businesses should be wary when relying on spreadsheet tools for their solvency returns, and should consider using automated solutions to streamline these processes in the future."
For pillar III of the Solvency II directive, firms are required to submit quarterly and annual quantitative data to the Prudential Regulation Authority in the form of standardised supervisory reporting templates, known as quarterly or annual solvency returns.