Banking - Internal Audit

In today’s dynamic regulatory and economic environment, Internal Audit (IA) can play a significant role in helping organisations respond to ever-increasing demands through a robust internal controls environment.

Whether through fully outsourced IA arrangements, or the provision of co-source assistance, we take a collaborative approach to IA, ensuring that IA does not alienate itself from the business, but is instead seen as a trusted advisor for the business and those charged with governance.

Current market Challenges 

In the wake of a global pandemic and Ukraine War the UK regulators have placed significance importance on how organisations are building operational and financial resilience to protect the market and ultimately consumers. This is a common theme throughout the FCA and PRA’s 22/23 objectives and a key area of focus. 

Some other key regulatory changes/areas of focus for 2023 are summarised below: 

  • Consumer Duty – replacing Principles 6 and 7 of the FCA handbook. The new rules will impact any organisation that distributes or manufactures products and/or services to retail customers and are required to be implemented by July 2023 or July 2024 for closed books. 
  • Cyber Security risk is a top priority for financial services organisations given the increased levels of targeted ransomware​, supply chain attacks and the risks associated with the rise of cloud usage. 
  • Financial Crime continues to be a focus for the FCA and in particular how challenger banks are testing their financial crime controls when entering the UK market. 
  • Environmental, Social and Governance (ESG) remains high on the regulatory agenda with the expectation that ESG risks are appropriately identified, assessed and addressed.  

Other areas of focus include: 

  • Conduct & governance  
  • Credit risk  
  • IT resilience  
  • Prudential 
  • Technology and operations 
  • Appointed representative regime 
  • Market abuse 

How we can help

Our team of experienced auditors and specialists provide IA services to a large number of organisations in the Banking and Capital Markets industry and are able to deliver high value insights through outsource and co-source arrangements, secondments and the provision of EQAs.   

Our UK team has specialists in risk management, prudential reporting, regulatory compliance, ESG, financial crime, model risk, cyber and IT. As a result, we are able to add real value to organisations by understanding the risks they face.  

Our current client base consists of: 

  • UK retail and corporate banks 
  • Challenger / start-up banks 
  • UK branches/subsidiaries of international banks 
  • Building societies  
  • Other credit institutions 

In addition to traditional IA techniques, we can also deploy data analytics to gain an overview of a wider population and data set​ and as a means of continuous auditing. 

Case study 

We have experience in applying IA guidance and best practice in a proportionate way to ensure our clients get the maximum benefit from our work. We spend time getting to know our clients in order to develop a comprehensive audit universe, risk assessment and annual audit plan that fully addresses the risks to their organisation.  

 

For one of our banking clients, we developed a three-year plan, performing audits across all key risk areas, including: 

  • GDPR 
  • ICAAP 
  • ILAAP 
  • Recovery Plan 
  • Change Management & Governance (Core Banking Re-platforming) 
  • Outsourcing 
  • Cyber Security 
  • IT Vulnerability Management 
  • Compliance 
  • SMCR 
  • Trade Finance  
  • Treasury  
  • Credit Risk Management  
  • Corporate Governance 
  • Financial Crime 
  • Risk Management 

 

The plan comprised of audits requiring specialist input from our regulatory and technology teams and deeper dives into specific risk areas. We were able to provide a number of value-add recommendations that ultimately improved the overall control environment, ensuring the enhancements were proportionate but also scalable where the target was growth.  

Get in touch 

Please contact us if you require any further information on the internal audit services we provide.

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