Internal Audit in Banking

What our future may look like…

Alessio Miranda – General Manager, Corporate Audit Services (CAS) - ING
AGENDA
1. Zoom-out and Fast-forward

2. Banking beyond 2025

3. The future of Internal Audit

4. Today’s actions
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1. Zoom-out and Fast-forward
… the long term/macro perspective
• In a banking industry which is likely to be significantly disrupted,
• the need for independent “diagnostic” services will still be there

However:

Content and service delivery expectations will be

significantly different

The tools and skill sets to provide such services will also
have changed

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2. Banking beyond 2025
Although Fintechs have failed to disrupt the competitive landscape, they have laid a
foundation for future disruption. Eight forces that have the potential to shift the
competitive landscape of the financial
ecosystem:

1. Cost Commoditisation
2. Profit Redistribution
3. Experience Ownership
4. Platforms Rising
5. Data Monetisation
6. Bionic Workforce
7. Systemically Important Techs
Beyond Fintech :
A Pragmatic Assessment of Disruptive Potentia in Financial Services 8. Financial Regionalisation

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Trends already emerging…

Data (multiple sources and real time) and decision models

Differentiating customer experience via new Platforms and Eco-Systems

Pressure to reduce cost base calls for intensified automation/robotisation

which mean ….

.… Shift from traditional organisational structures to more agile

structures

…. Increased focus on culture and behaviour

…. Uncertainties around the regulatory landscape:

• Effectiveness and competitive impact of regulations on banks
• Quasi-banking services by non-regulated providers

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3. The future of Internal Audit
…… “Diagnostic services” must evolve to meet clients’ needs

We need to address new:

• Technologies
• Data architecture and structure
• Service provisions (including suitability)
• Customer interaction (channels)
• Boundaries with partners in the ecosystem
• Robotisation/decision models

All of these within an increasingly demanding regulatory environment!

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…… change is the new constant!

In a highly innovative and dynamically changing environment:

• Technology auditors will be the business auditors
• The shelf-live of audit reports will be significantly reduced
• Data becomes an indispensable part of every audit
• The concept of audit planning cycle will become inadequate

• Knowledge of regulations will remain a key priority

• Behaviour and culture will be the ultimate safeguard of a sustainable control
environment

If we don’t innovate our services NOW, we will fall behind!

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4. Today’s actions
…… which immediate priorities am I focussing on?

1. Embedding of Data Analytics capabilities (resources and tools)

across all staff
2. Experiment alternative assurance products to assess innovations
and milestones that allow quicker time to market

3. Introduce automated information sources as factors underlying

risk based audit planning
4. Invest now on specialist skills (e.g. technology, models).

5. Explore and empower self-steering teams (e.g. Agile way of

working) and adapt methodology accordingly

6. Develop assessments of behaviours/culture in each audit and

behavioural skills in auditors.

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THANK YOU!
THANK YOU!