CIBN urges bank auditors to use technology to prevent emerging risks

THE Chartered Institute of Bankers of Nigeria (CIBN) has called on internal auditors of banks to embrace the use of technology in the discharge of their duties with a view to identifying emerging risks and prevent their occurrences.

The CIBN president/chairman of Council, Ken Opara, made the call at the annual conference of the Association of the Chief Audit Executives of Banks in Nigeria (ACAEBIN), according to a statement made available to The ICIR on Sunday, March 26.

Opara noted that the Covid-19 pandemic brought about the need to accelerate and adopt technological innovation in today’s businesses.

The infectious disease, which emerged in the Chinese city of Wuhan in 2019 and spread over the world, affected lives and ground businesses to a halt.

A survey by McKinsey and Company showed that responses to COVID-19 have speeded the adoption of digital technologies by several years.

Given this development, all aspects of businesses were subjected to disruptive innovation, including the internal audit functions, Opara stressed.

“The emergence of new technologies, changing behaviours of bank customers, changing regulatory requirements, and evolving business models mean that the traditional methods of internal audit may no longer be adequate,” he said.

The CIBN president also noted that many factors that have been driving the adoption of technology in internal audit, which include increase in the volume of data, and shift towards automation, as well as change in business models.

“With the increasing use of data analytics, artificial intelligence, and automation tools, internal audit professionals must be able to utilise these tools to identify risks and essentially add value to their respective organisations,” he said.

He noted, however, that the adoption of technology in audit was not without its threats.

    To be effective, internal auditors must have a thorough understanding of their respective organisation’s strategy, operations, and risk landscape, adding, “This means working closely with other functions within the organisation, such as finance, ICT, risk management, compliance and operations to gain a holistic view of the business.

    “With this understanding, internal auditors can identify emerging risks and ensure that they are adequately addressed. This puts them at an advantage, compared to professionals who have not invested time to understand the domain within which they operate.”

    The Nigeria Deposit Insurance Corporation (NDIC), in its 2020 Annual Report, put the total amount that resulted from bank fraud and forgery cases at N120.79 billion in 2020.

    Besides having a continuing presence in a company, internal auditors supplement other staff within the organisation when it comes to fraud detection and prevention, the World Bank said in a report, ‘Public Sector Internal Audit: Focus on Fraud’, released in October 2022.

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