Financial services - sector challenges series

The third in our fortnightly series of guest blog posts focusing on sector specific challenges from an internal audit perspective.

Take a look through the lens of financial services.

​​Guest blog post by the Banking and Financial Services Sector Advisory Panel

A perfect storm describes an event in which a rare combination of circumstances drastically aggravates the event - is a perfect storm building for financial services? 

Internal auditors in financial service firms face multiple, competing priorities, and sometimes knowing where to focus our time and efforts is a challenge. Key elements currently facing financial service firms include:

So, how might we circumnavigate this storm – without the need for a bigger boat!

Some ideas for you to consider…

  • Focus on what is important to our stakeholders – stay close to the board, the audit committee and understand the expectations of our regulators.
  • Be prepared to adapt and evolve the audit plan – maybe an annual plan will be a thing of the past. Take a look at risk-based internal audit planning in financial services.
  • Make sure you are practicing risk-based auditing – we cannot audit everything; focus on what matters.
  • Traditional approaches to audit may not be appropriate or possible – maybe more deep-dive rather than full-scope audits to get to the heart of what matters. More timely feedback to stakeholders – less formal audit reports.
  • Undertaking an audit will be different now – remote working presents opportunities and challenges. How do we audit virtually - for example, how do we see sufficient evidence when a walkthrough is completed by video call?
  • Think about providing insight – internal audit is in a great position to be able to ‘join-the-dots’ and share these views with their stakeholders which may mean less audit work.
  • Think about coordinated assurance – with second line (and external audit) to make the best use of available resources, are all parties aligned on the new and emerging key risks?

The blog post ‘Help, my crystal ball is broken’ (see related below) provides some great tips on managing uncertainty and continuing to provide assurance.

And above all, please do not forget to look after your own well-being and that of your team. Dealing with a storm is always a challenge and working as a team to use our limited resource to meet those challenges is important right now. As we have recently seen, even a slight gust of wind can send a ship off course and block a global shipping route!

Watch out for our next blog post in this series on local authorities. Coming the w/c 17 May.

Related blog posts

Help! My crystal ball is broken!

Central government - sector challenges | Construction - sector challenges

Content reviewed: 10 January 2022