“ACL has no trouble processing over 16 gigabytes of information in a single table. Our auditors can now analyse every account in our organisation – not just a narrow client sample from a specific branch.”
Bennie Smit, Data Extraction Specialist, FirstRand Banking Group
A division of the FirstRand Banking Group, First National Bank manages more than four million customer accounts across South Africa, Botswana, Swaziland, and Namibia. The Internal Audit department reviews each of the company’s more than 1,000 branches annually, but needed a more efficient, inclusive, and less costly method to obtain account data. Led by Bennie Smit, the Finance, Risk and Audit Services department turned to ACL technology to access complete branch data in just minutes – without minimum exceptions or limits on the size of data extractions. Auditors can now pinpoint high-risk branches and schedule timely follow-up reviews. With streamlined data access, First National has extended its audit coverage, to minimise business risks and strengthen its position in the highly competitive financial services industry.
FirstRand was created in April 1998 through a merger of the financial services interests of the Anglo American Corporation of South Africa Limited and RMB Holdings Limited. The FirstRand Banking Group is now one of the largest financial institutions in South Africa, with total assets of £42 billion, and ranks as one of the top 10 listed companies on the JSE Securities Exchange. The FirstRand Banking Group employs 35,800 people and has over 1,000 branches and a network of 2,200 ATMs and 1,200 mini ATMs. FirstRand’s vision is “to passionately build and nurture the most compelling and innovative range of financial service brands in the business”.
FirstRand Banking Group uses ACL data analytics technology for flexible access to a broad spectrum of data to conduct its audit and risk reviews.
First National Bank uses a Demand Deposit Accounts system to manage the chequing account information for its four million clients. Each account is administered at the branch where the account was originally opened. There are approximately 1,000 First National branches located throughout South Africa, Botswana, Swaziland, and Namibia, and the internal audit team reviews each branch at least once every calendar year.
In the past, internal auditors relied on branch printouts generated by the Analytics and Data department, a cost centre within First National Bank. These printouts carried a cost of £9,200 per year, but more important, each branch printout took two days to generate – and presented a considerable delaying factor, given the extensive network of branches that the audit team must review.
In addition, the printouts were delivered to the internal audit team as hard copies and included a sample of just 20 accounts per branch. Analysis could only be performed within the context of individual branches – preventing the audit team from achieving a comprehensive view of the entire branch network that would allow identification of branches with weaker controls representing potentially greater business risk. Finally, the process allowed only a narrow extraction field, limiting the auditors ability to gain clear visibility and insight into the company’s overall financial activities, challenges, and successes.
To automate the data extraction process, eliminate the need for hard-copy printouts, and to provide branch auditors with usable, comprehensive, and up-to-date information, Bennie Smit, a data extraction specialist with FirstRand Banking Group, used ACL audit analytics software to join a series of required data tables. Each of these tables contains the information required for comprehensive branch reviews, totaling more than 16 gigabytes of data.
With ACL technology, internal auditors now can analyse all customer accounts from every First National Bank branch, not just 20 accounts from a single location. This comprehensive, unified view into the bank’s account information enables the audit team to identify high-risk branches and, if necessary, schedule follow-up reviews that fall outside the annual audit review cycle.
Auditors also can identify any necessary exceptions, and there are no limits on size of data extractions. This information provides a more complete view of the branch activities, increasing the depth of audit coverage. With ACL technology, Smit also eliminated the average two-day waiting period for audit data – creating greater efficiencies. It now takes just 15 minutes to get the necessary branch information, which is exported for use in the review auditors’ working paper package.
FirstRand Banking Group uses ACL technology to enhance and strengthen First National Bank’s branch audit process and: