How Can Digital Audit and Risk Monitoring Tools Improve Financial Services?

digital audit

As more financial services face business risk pressures, there will be an increased need for putting the right digital tools in place to ensure that data is secure and compliant with regulations.

The financial services industry is facing ongoing scrutiny, increasing regulatory pressure, and a need to demonstrate compliance with regulations. To manage the ever-increasing risk and compliance challenges faced by today’s financial services firms, there has been a proliferation of new audit and regulatory compliance tests and risk monitoring requirements.

As a result, there is a proliferation of manual processes, inconsistent access to data, partially documented controls environment, and a lagging reaction to new and/or changing regulations. The traditional approach to address this increased workload has been to hire additional staff – taking on exponentially higher costs. And in this job market, the lack of an adequate, available well-trained talent pool. 

Leveraging Digital Audit and Compliance Tools 

Digital tools are revolutionizing the audit and compliance testing process, making it easier for companies to conduct audits, meet regulatory requirements and reduce risk. Regulations have become more complex, and the penalties for non-compliance have increased. As a result, firms are looking for ways to automate compliance processes and reduce risk. In addition to automation, there are several areas in which today’s firms can utilize digital tools and monitoring. 

  • Audit and Compliance Testing. Firms are increasingly relying on automated auditing and compliance testing to reduce risk, automate processes, and ensure timely completion of the required tests. This includes the ability to test across multiple lines of defense and across a full population of accounts or portfolios.  
  • Risk Monitoring and Surveillance. Risk monitoring is critical to ensuring that an organization remains compliant with current regulations as well as identifying potential non-compliance issues before they become an issue. The key is having the right tools to identify potential risks earlier in the process so that remediation activities can be implemented before any fines or penalties are incurred.
  • Regulatory Intelligence Dashboards. Regulatory Intelligence dashboards provide financial services leaders with real-time access to key regulatory changes and alerts from around the world so they can make informed decisions faster than ever before. 

See also: How to Secure Your Cloud Platform and Be Ready for Your Next Audit

What Leading Firms Are Doing 

Digital audit, compliance, and risk monitoring solutions are being used by leading firms to ensure their data is secure and compliant with regulations. These solutions are also used by firms that have already adopted digital technologies to help them improve their processes and reduce costs. 

Leading firms are implementing: 

  • Automated workflow tools for the development and implementation of enhanced controls and testing. 
  • Robotic process automation tools to automate and accelerate rote testing activities. 
  • Advanced and cognitive analytics to automate complex human reasoning that is consistent and provides better security and governance without getting fatigued. 

With digital tools, firms can quickly move from sample testing to full population review. This results in stakeholders having access to real-time information that provides deeper insights for timely decision-making. In addition, they can automate control testing across multiple systems and reduce manual effort for control testing by up to 80 percent or more. During especially critical or high-risk times, it is critical to cut down time spent on non-value-added activities and eliminate redundancies in process steps.   

The market for digital audit, compliance, and risk monitoring is expanding rapidly. As more financial services face business risk pressures, there will be an increased need for putting the right digital tools in place to ensure that data is secure and compliant with regulations. 

Brian Murrow

About Brian Murrow

Brian Murrow is a Partner and leader of Risk & Accounting Advisory services at Cherry Bekaert. Brian has over 32 years of professional experience and specializes in enterprise risk management, counter-fraud solutions, internal audit analytics, and business intelligence. He received his B.A. in Economics from the University of Maryland and his MBA in Economics from George Washington University.

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