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The Top 5 Reasons Why Top-Tier Investment Managers Are Using Interactive Dashboards to Leverage Microsoft Excel

By Hardeep

August 6, 2022
CIO Dashboard

The way investment managers consume data has changed drastically in the past few years. There has been an exponential growth1 in the acceptance of technology by financial firms. One of the biggest changes for these firms is the visualization of data and its utility to end users like investment managers. The article will discuss why interactive dashboards using Power BI are gaining popularity within top-tier investment firms.

#1 Better Visualization and Improvement in Decision Making

For years, Microsoft Excel has been the go-to platform for generating reports and dashboards. Most of the critical reports used Microsoft Excel but the tool was more effective as a repository for data. Even though new features have been included, the dashboard created is static in nature. For example, if a manager needs to filter out options, he will have to manually apply these filters every time such a requirement comes up. With the help of interactive dashboards created using Power BI, not only is the visualization better, but it also allows managers to conduct a deeper analysis easily.

Another feature of Power BI is that the dashboards created are suitable for data exploration. This feature gives the manager a better insight into the data instead of just representing the data in a more compact form. Through charts that are interactive, investment managers can make a comparison using the same interactive dashboard. As a simple example, by clicking on a relevant asset class, the return generated for each region can be shown in the dashboard. There is no need to filter by region or by asset class separately which can be cumbersome for the presenter.

#2 Accuracy in Aggregating Information and enhanced Efficiency

In most cases, the data on Microsoft Excel is available across multiple workbooks. To construct a dashboard, the data must be carefully aggregated each time. Given the volume of data that can be available, it can be overwhelming for the investment team to integrate it into a single dashboard using Microsoft Excel. Using Power BI, multiple workbooks (and other data sources) can be easily consolidated into a single interactive dashboard. Power BI automatically detects the fields and displays them on its interface. The manager only must select the relevant fields necessary for creating graphs and tables. This reduces the scope for errors and allows for better customization by focussing on the visualization aspect instead of spending effort on eliminating errors. This results in a more efficient and accurate process of investment analysis and visualization.

#3 Centralization of Information, Automation, and Easy Distribution

One of the biggest challenges that managers face while handling Microsoft Excel workbooks is how to integrate the data into a standard dashboard. Creating dashboards in Excel may not be suitable for managers looking to distribute it to a wider audience. The manager may have to distribute the underlying base file containing multiple worksheets along with the dashboard. Using interactive dashboards powered by Power BI gives more flexibility to the manager when distributing these dashboards. These interactive elements can be integrated into web-based platforms, allowing users to directly access the information using a web browser.

In terms of automation, the flexibility offered by Power BI is also noteworthy. The scope for automation using only Microsoft Excel is limited but Power BI enhances the features that can be made available to end-users. The dashboards can be automatically generated and saved in cloud storage platforms using Power BI.

These dashboards can be made available to several users simultaneously. The end users can also play around with the features of the interactive dashboard without making changes to the actual data. The availability of such information in a centralized repository also allows users to have continuous  access to the information.

The integration of Power BI to support mobile platforms allows investment managers to access these visualization tools using their mobile phones. While mobile phones also support Microsoft Excel, the ease of interpreting the dashboard using a dedicated mobile tool is higher.

CIO Dashboard

Source: Cognivo

Diverse ways to access Interactive Dashboards generated using Power BI

It is also possible for managers to configure the timing for generating these interactive dashboards using Power BI. Through scheduling, the Power BI tool would automatically extract the information from a specified Microsoft Excel file and create the required report. This feature eliminates the intervention of the manager and can be a handy feature if multiple dashboards need to be created at frequent intervals. The investment manager can focus on interpreting the output instead of dedicating his time to the creation of a report. Since the final output is available at a centralized location, alerts can also be configured to inform users whenever a new report is generated. There are also options to create workflows that trigger a new report on the dashboard when a certain task is completed.

The investment manager can also access historical dashboards with relative ease if Power BI is used. Managing time series data is also convenient using interactive dashboards and allows managers to select the appropriate timeframe for the dashboard. This would not be easily managed using only Excel files because it would require managing multiple sheets or files and filtering out the required period.

#4 Enhancing Analysis and Visualization by Leveraging Artificial Intelligence (AI) and Machine Learning (ML)

The integration of AI into interactive dashboards adds more functionality to these platforms. Investment managers can integrate models by leveraging AI to predict an outcome under various scenarios. AI also supports features that allow managers to customize the dashboard without having to write complex code.

Machine Learning is another area that enhances the cognitive abilities of the output. Key phrase extraction is an example of how machine learning is used to create interactive dashboards. Using this feature, managers can easily build the dashboard by simply selecting the fields. The cognitive aspect of the tool automatically recommends the type of chart based on the field selected. The manager does not have to remember every chart element of the Power BI tool. Nowadays, it is not necessary for English to be the language of choice. The machine learning feature is capable of handling over 120 languages. It does not stop here. There is also an option to include features like image tagging and sentiment analysis that could enhance the analytical capabilities of the manager.

These interactive dashboards also enable the manager to perform a deep dive into the information that is being displayed. The Fund Performance and Risk Metrics Visual is one such feature that automatically provides TWR/IRR returns, and risk measures over 7-day, 15-day, MTD, YTD time periods.

CIO Dashboard 2

Source: Cognivo

It also allows managers to determine how their fund as well as individual strategies are performing over the key time-periods. Using this feature, investment managers can easily pinpoint the best and wort performers and can influence future outcomes under different scenarios. This can be critical for managers who are looking to understand the performance and risks within the portfolio by analyzing the sensitivity of the returns to each investment (stock, option, future, etc). The feature could also help the manager respond appropriately to mitigate risks arising from these factors.

#5 Easy to Use for Investment Managers

Microsoft Excel is certainly not the easiest of interfaces for investment managers. The use of formulae, along with limited and less  user-friendly charting features can hamper the productivity level of an investment manager. In contrast, interactive dashboards are search-based or button-based tools in which the outcome can be generated by typing simple texts or clicking on a specific selection. Even though standard templates are available for both, the complexity of the process to create a dashboard in Microsoft Excel is highlighted by the number of steps required. Manually selecting the data, adjusting filters, or refreshing the data are some of the commonly observed drawbacks in Microsoft Excel that are easily eliminated using interactive dashboards created using Power BI.

Even while accessing the final output, the analytics provided using Microsoft Excel are certainly not as detailed as those provided by interactive dashboard. For understanding the drivers of a metric in Microsoft Excel, managers would have to create new charts or pivot tables using the base data that is present in a tabular form. On the other hand, Power BI dashboards have rich content embedded in them. Managers can easily drill down the analysis to a level that they deem fit for the audience. The visualization aspect is also not compromised when the analysis gets more thorough.

Key Takeaway

Interactive dashboards can be a remarkably effective tool for investment managers looking for enhanced analytical capabilities. They offer an easy-to-use interface that combines powerful computing capabilities like AI and Machine Learning. For an investment manager looking to focus on managing the investments, it is certainly a worthwhile investment to leverage the capabilities of Power BI by integrating it with the data stored in Microsoft Excel.

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