ACL Success Story – Banking & Finance – Bank Of India

2011-05-01

Bank of India

“ACL technology has dramatically increased our audit confidence and coverage. The investment has already paid for itself and will continue to provide real value to our business.”

Shri A.K. Mahajan, General Manager, Bank of India

Customer Profile

Founded in 1906, Bank of India offers both retail and corporate services from over 3,200 branches across the country and 24 foreign branches outside national borders. Bank of India is headquartered in Mumbai, with 41,000+ employees and £2.85 billion in annual revenues as of March, 2010.

Objectives

Bank of India recently launched a pilot project to shift from conducting lengthy manual field testing to performing audit analytics from one central location. The company’s traditional, branch-based audits required data sampling and time-consuming transaction reviews. In addition, individual branches would often go 12-18 months without detailed attention from the Internal Audit department. With ACL technology, auditors can quickly access and analyse complete branch data populations before the audit even begins – promoting greater productivity and independence from IT intervention.

Implementation and Planning

In a changing business environment marked by high-volume transactions, rapid corporate growth, significant industry competition and the ongoing threat of fraud and undesirable transactions, Bank of India faces a variety of internal and external challenges. The company chose ACL technology to:

• Mitigate operational risk by identifying potential control gaps
• Minimise errors and omissions
• Ensure data consistency after migrating from legacy systems to a new, company-wide platform
• Strengthen core operations connected to complex business products and new banking channels
• Uncover fraud and control weaknesses
• Ensure compliance with regulatory bodies
• Develop more efficient, cost-effective audit processes

The Internal Audit group implemented ACL audit analytics to move from sample-based testing to complete population analysis with near real-time verification of transactional data. The goal was to replace manual processes with smart, flexible analytics that would meet stringent security and confidentiality requirements. It was equally important to prevent data duplication in a complex IT environment.

Working with ACL channel partner, Auditime, Bank of India implemented a solution that runs independently without affecting system functionality or processing speeds. The team chose ACL technology based on its top performance and outstanding industry reputation, plus its ability to address specific audit requirements. After a series of training sessions, the core team developed both short- and long-term audit goals and rolled out additional ACL workshops to hundreds of auditors working in key operational zones.

The initial phase included a migration audit, where legacy data was verified for accuracy, completeness and logical consistency with core banking system data. This valuable process unearthed critical errors and ensured the new system was populated with accurate data for subsequent analysis. Next, audit analytics were developed to identify transactional exceptions, such as revenue leakage and both regulatory and internal control violations. Armed with accurate, current information, the audit team identified several control areas that require regular monitoring and implemented a series of repeatable analytics.

Results

Bank of India has applied ACL technology to:

• Automate manual audit techniques and boost efficiency
• Recover lost revenue, pinpoint fraud, and achieve regulatory compliance
• Cut on-site audit spending by at least 20%
• Enhance audit workflows, transparency and security
• Standardise data for quick, centralised analysis

The ACL solution has significantly reduced the number of undesirable, incorrect and fraudulent transactions, while recovering lost revenues. Complete population testing has also boosted auditor confidence and eliminates the bias inherent in manual sampling techniques.

With targeted analytics, auditors can generate exception reports that are sent to individual branches and the IT department before scheduled field visits. This standardised process promotes more comprehensive, transparent and efficient audits from start to finish. The data extractions are scheduled during non-peak hours and undergo pre-defined analysis. Auditors are then free to focus on value-added activities and have enhanced their coverage without any corresponding increase in budget or resources.

The ACL-powered solution has enabled Bank of India to develop risk indicators that mitigate ongoing operational business risks. Timely reports alert management of any irregularities so they can control emerging issues and prevent damages.

By performing data extractions and analysis at a central location, the company expects to save over 20% from last year’s audit costs. Quickly identifying data anomalies, funds leakage and errors will also help Bank of India to recover lost revenue and enjoy a strong ROI for its ACL investment.

Next Steps

Bank of India’s audit team will continue to use ACL solutions to strengthen business areas and processes, including audit workflows and compliance monitoring initiatives. ACL analytics offer an invaluable way to enhance internal controls – delivering real assurance and a healthy boost to the company’s bottom line.