Continuous Monitoring
the challenge
Our Client, a financial services provider, was experiencing rapid growth in their customer base and loan portfolio. With an increased number of branches, agencies and merchant outlets, the internal audit department was overwhelmed. A solution was proposed to automate and “outsource” all of the recurrent audit queries to Arbutus Analyzer.
The requirement was for the solution to examine 100% of the data population across the organizations entire audit plan. The solution should also be completely independent of manual intervention and should continuously monitor all transactions on the core banking system under various schedules (i.e., daily, weekly, monthly)
Solution
For this project, we used Arbutus Analyzers’ Workflow features. Workflows are a visual no-code way of building analytic scripts. We built more than 50 different audits tests and exception reporting workflows for internal audit and the finance department.
Our first task was configuring a secure integration with the organizations’ core banking system. Once this was done and we had completed the mapping of business procedures to data, we then began building the audit tests. The tests were based on internal audit department procedures and the risks associated by the audit area.
Some of the audit reports and tests included
M-pesa reversals and double entries
Cash evacuated from vault events
Teller-to-Teller cash exchanges
Loan principle increase reversals
Journal entries adjustments
Rebate on locked deposits
Loans issued without collateral
Loans with shared collateral
Any exceptions reported were shared to specific auditors via email for follow up and remediation.
Results
With nearly all audit procedures having been continuously scheduled on Arbutus, the internal audit department are now free to pursue remediation and addressing exceptions raised. Previously, most of their time would be spent testing sampled data to uncover any exceptions
100% of the data is now examined and tested. This allows for greater assurance in their audit reports and a much higher likelihood that exceptions in the transactions will be detected and flagged.
The organization has also experienced better loan repayment performance – there is closer follow up on outstanding loan repayments as a daily report of all unpaid loan installments is sent to the credit department from the system and a summary of the same copied to higher management.
Since the tests were built on workflows, maintenance is simplified. As is common with many organizations, once it is known that some degree of monitoring and automated testing is being performed on the system, the routes and methods used to commit fraud keep changing. Workflows allow the auditors to quickly keep pace, close any newly opened loopholes and tighten controls by making live adjustments to active analytic workflows.
Start by doing what’s necessary; then do what’s possible; and suddenly you will have solved the problem and doing the impossible.
Seeing is believing.
Get in touch with us today for a demonstration (using your own data) of what our analysis can do for you.