Heritage Bank, PWC, Deloitte advocate use of tech to tackle fraud, rescind effects of Covid-19

Heritage Bank Plc, Nigeria’s Most Innovative Banking Service provider has called on internal auditors of banks to adopt the various digital technologies to prevent fraud and annul the adverse impact of Covid-19 on the financial ecosystem.

Managing Director/CEO of Heritage Bank, Ifie Sekibo, made the call while speaking at the just concluded 47th Quarterly Meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN), adding that for improved banking operations and safer financial system for stakeholders, internal auditors must be dynamic and quick to adopt various digital measures.

Sekibo raised the alarm on the impact of fraudulent activities in the banking sector, while quoting PricewaterhouseCoopers’ (PWC’s) Global Economic Crime and Fraud Survey 2020, which revealed that the total cost of cybercrimes is worth an eye-watering $42 billion, which was cash taken straight off companies’ bottom line, whilst 13% of those who had experienced fraud said they had lost $50 million-plus.

Sekibo, who spoke on the theme, “Elevating Internal Audit’s Role in the Face of Emerging Risks and Opportunities” organised virtually and hosted by the Heritage Bank, argued that “While it was sufficient for yesterday’s auditor to understand regular and routine banking practices such as credit, treasury, etc in his traditional assurance role, for him to be relevant in harnessing the opportunities in today’s business world, he must become versed in cybersecurity, artificial intelligence, data analytics, fraud management, regulatory pronouncements, forensics etc and having equipped himself, present balanced, objective audit reports to Executive Management while striking the right balance between the assurance and consulting responsibilities.”

In her keynote address, titled, “Elevating Internal Audit Role In The Face Of Emerging Risks and Opportunities,” Ibukun Beecroft, Partner Risk Advisory at Deloitte, stated that the banking industry in Nigeria today has adopted various digital measures to keep the business running and delivering services to the customers but there was need for Internal Audit (IA) positioned to provide the required assurance and consulting services in the face of the changes and attendant risk, particularly increased cyber-risks.

Beecroft, quoting 2018 Financial Stability Report by the Central Bank of Nigeria, noted that Banks recorded 25,029 confirmed cases of fraud and this resulted in a loss of N2.21 billion, while more than 90 per cent of fraud cases in 2018 were perpetrated via technologically driven channels.

“As Internal Auditors, the knowledge of technology would enable us identify gaps in our core banking applications and other applications and provide relevant recommendations to eliminating loopholes that may serve as an avenue for potential fraud.

She therefore advised auditors on the need to focus on advanced technologies and risk management operations as reflected around the Three Lines of Defense (3LOD) churned out by the Institute of Internal Auditors, which create opportunities for IA and its future role.

Beecroft further warned that the ever-changing landscape and evolving risks in the banking industry could render the current internal audit plan obsolete.

She posited that internal auditors should reprioritise the audit plan as soon as possible to provide assurance over the most consequential risks while being cognizant of the impact on operations.

“To take advantage of these changes and disruptions, auditors need to rethink their role by adapting to and embracing change, enabling the IA function to become more agile, nimble, and forward-looking, thus driving change through the 3LOD,” Beecroft added.

Yetunde Oladeji, director Internal Audit Services at PricewaterhouseCoopers Limited (PWC), who spoke on the theme, “Elevating IA’s role to meet today’s emerging risks,” canvassed that the banking sector should be dynamic, prioritse digitization and with flexible workforce strategies as these would determine its ability to adapt to rapidly changing circumstances to survive and thrive.