How Tech Disruptions In Nigerian Banks Changed Auditing Processes – MD Nova Merchant Bank, Nath Ude

2 years ago
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Managing Director of Nova Merchant Bank, Nath Ude, said technology and the pandemic-induced lockdowns have changed the work models of auditors in the financial sectors, and created a new normal that they must embrace to remain relevant.

Ude stated that auditing processes have developed from focus on brick and mortar, as well as paper trails, to expanding into the digital world, which can only be comprehended by auditors upskill their capabilities beyond the old methods of policing operations of banks.

The Nova boss made this known during his presentation at the conference of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN), held on Thursday, at Lagos Oriental Hotel, Victoria Island, Lagos.

He linked the drastic change to the disruption in the financial sector, which has seen banks upgrade from offering services in their branches, to moving office online. Ude highlighted the transition from banking halls to Auto Teller Machines (ATM), then the entry of mobile app banking and agent banking, with the aid of PoS.

The MD said the old audit tools are no longer effective in today’s digital world, where internal business process auditors in banks must now have knowledge of IT (information technology) or IS (information systems) auditors, considering digital data trails and cybercrime threat to banks – even though the role of both auditors were separate in the past.

Ude said the digital innovation of the financial institution has increased the operational risks banks are exposed to, and in order to be able to guide the creditors, help them understand the new threats, and mitigate them, auditors must be skilled in IT or IS auditing models.

“The tools, knowledge and skills of internal auditors must evolve with the evolving times. The tools used to carry out audits; the knowledge – terms, terminologies, applications, options, uses – of digital platforms, outlets, services; and the skills – comfort with basic computer applications and IT (Information Technology) audit software, development of IS (Information Systems) audit skills, (re)learning – must rise to meet the changes in the industry.

“The volume and breadth of transactions, reports, customer service requests, incident reports, regulatory filing and the checks that will need to be done on these items cannot be done effectively with the usual tools and cannot be done effectively using the usual processes.

“Throughout the history of auditing, audit tools have had to be more advanced or at least at par with the tools used by process owners. As of today, there is no audit team that does not use a computer system and one or more software applications to carry out their audits. From the use of various Spreadsheet software applications to the Computer Assisted Audit Techniques (CAATs) i.e. specifically designed auditing software; our current audit teams leverage existing technologies in executing their roles.

Nova Merchant Bank MD, Nath Ude

“Our current audit teams generally are divided – in one way or another – between business process auditors and IT/IS auditors and perhaps Investigation or Forensic teams. While IT/IS auditors specialize in the audit of information technology or information systems, the future demands that business process auditors, who are now dealing with more advanced and more technical business processes, require more advanced and more technical IT and IS audit skills to bring increased value to their audit execution and in proffering recommendations.

“We know from experience that the computer knowledge, expertise and experience of our audit teams has direct impact on their ability to optimize the use of the technology available to them. Likewise, our auditors’ knowledge, expertise, and experience of existing and advancing technologies will have a direct impact on their ability to review and advise management on risks and controls related to technologies adopted by the organization.” Ude said.

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