The world of internal audit continues to advance. In recent years, audit teams have increasingly used data analytics and cloud technologies to increase efficiency and improve assurance. Now, emerging technologies like AI and robotic process automation (RPA) are further making their way into internal audit.
It’s still early days, but the trend toward automation is clear. In fact, when asked about emerging technology, 20% participants of a recent Wolters Kluwer survey said they’re already using RPA. In addition to that, 12% said they’re using AI, 3% said they’re using blockchain, and 15% said they’re using more than one type of emerging tech.
These technologies, particularly RPA, have the potential to enhance audit quality. For example, RPA can enable internal audit teams to spend more time collaborating with other departments and sharing results with boards, rather than getting bogged down in repetitive, less strategic tasks.
And in data-centric industries like financial services, these technologies can make a particularly large impact, as we’ll examine in this article.
What is RPA?
Physical robotics can perform motions that automate repetitive tasks, like putting a cap on a bottle or moving a box from one place to another. Similarly, RPA automates repetitive tasks, but the difference is that RPA is centered around software, not hardware.
“Robotic process automation (RPA), also known as software robotics, uses automation technologies to mimic back-office tasks of human workers, such as extracting data, filling in forms, moving files, et cetera. It combines APIs and user interface (UI) interactions to integrate and perform repetitive tasks between enterprise and productivity applications,” explains IBM.
What does RPA mean for internal audit?
One way that RPA can be used for internal audit is to make data-related tasks more efficient.
“If we cut to the chase, the job is straightforward: we download data, analyze it, and use it to discuss processes and controls…The issue is that we waste a lot of time obtaining and formatting data for each audit—the same tables and charts repeatedly,” writes Jean-Marie Bequevor, Expert Practice Leader Internal Audit at consultancy TriFinance, in an article for Internal Audit 360°.
RPA can also help to automate periodic reporting. If you know certain information is needed in every report, then an RPA program could potentially be set up to obtain and fill that information.
That said, RPA can also carry risk, both in terms of the use of RPA in audit programs and the use of RPA across other departments. Internal auditors need to consider RPA internal controls to make sure that RPA is being used appropriately. You wouldn’t want to end up with a misprogrammed bot that creates errors or security holes.
What does RPA mean for financial services?
In addition to being used for auditing, RPA can also play a role in corporate finance and the financial services industry more broadly.
Finance professionals — ranging from corporate treasurers to wealth managers to mortgage lenders — deal with large quantities of data. With RPA, financial services professionals can automate data-related processes like data collection, data cleansing, and analysis.
For example, an investment analyst might use RPA to improve their research process. Instead of manually creating and assembling a clean spreadsheet full of financial data, an RPA tool could automate that, freeing up time for the analyst to engage in more complex, nuanced tasks.
RPA in financial services can also help when it comes to client service and marketing tasks. For example, banks could automate activities like identifying customers that are a good fit for credit card offers or loan products. Rather than sending out these offers to all customers or manually reviewing every client file, an RPA program could be set up to compile a list of customers that meet certain criteria.
These are just a few of the many ways that RPA can be used in financial services and internal audit in general. A repetitive, data-oriented business process tends to be a good candidate for RPA. Many of these types of tasks exist in the financial services industry in areas ranging from compliance to customer onboarding.
With automation, financial services firms can free up time and focus on higher-value work, like building customer relationships and identifying new revenue opportunities. Meanwhile, internal audit professionals can use RPA to efficiently provide assurance.