When it comes to business achieving compliance isn’t just about meeting regulatory requirements—it’s about building a robust framework that ensures long-term success.
At KYC3 company, we’ve empowered numerous organizations to reach new heights by leveraging our cutting-edge technology. In this article, we delve into a crucial aspect of any successful compliance program: auditing.
Specifically, we’ll explore the fifth pillar of compliance, shedding light on how a well-structured auditing process can safeguard your operations and drive outstanding results. If you would like to know which are the other four pillars of compliance, Get the Whitepaper: Setting Up a Robust and Automated Risk & Compliance Management Program.
There are several considerations for your audit and reporting capabilities.
Why do you need a full audit trail?
You need to show a full trail across all your systems and processes.
Gaps between systems and error-prone manual steps make this difficult to do.
You need reliable audit records. These are records that are captured systematically and accurately. Manual capturing of such records is error-prone, and it’s also hard to do.
And you need accurate and detailed data. You need accurate and detailed data so that you can quickly answer management, audit, and regulatory questions about business activities.
If you have to trawl through old data and assemble spreadsheets to answer questions, the auditing process and reporting process are slowed down tremendously.
Whereas, if that data is on tap, ready to go, you can simply pull it, process it, and answer the question.
The bottom line is that audits are costly and time-consuming, and you need to have all the answers automatically collected and then available on tap if you want to scale reliably.
The first step in your audit and reporting process
So the first step in your audit and reporting process is checking your internal dossiers, your dossiers for internal compliance.
So occasionally a specific dossier will require a full review, such as a trigger event or a transaction or an activity change, and you’ll need to review that dossier in detail and conduct an internal audit on it.
The dossier is then reviewed. Documents and assessments are taken into account and checked to confirm the potential change in risk level.
The better way to do this, the new way, is to have smart dossiers that basically tell you when they need to be reviewed because they know that a document has changed or that there’s new external data that has an impact upon the dossier.
The new result is that the client risk levels can be quickly reviewed and confirmed whenever a trigger event occurs, and digitalization means the trigger events may even be signalled using automated API calls.
You don’t even need to manually enter any data into your system, by using an integrated digital compliance platform with smart dossiers, you can fulfil the client request 10 times faster while maintaining the proper risk and compliance controls.
The second step in your audit and reporting process
The second step in your audit and reporting process is reporting to your board.
The board of directors requires risk updates and needs concise information to approve any exceptional cases.
The compliance team must prepare these reports using data from various systems and processes.
Periodically the client’s team will review and update their overview statistics and then generate reports and details with a time-consuming process that can be included in a board pack.
The new way to do this is to keep all your data in an integrated system with full audit trails and detailed statistics that are available on tap.
Reports are available in real-time all the time, and the new result is that reports can be generated in minutes rather than hours with standardised formats and consistent data directly from the system.
Data is also accessible by API to automatically feed complex business intelligence and decision support systems should you have those.
By using an integrated digital compliance platform, you can get a 360-degree view of reports that are standardised and available all the time. This saves many man-days of work per year provides professional assurance and consists of consistent and unbiased reporting.
The third step in your audit and reporting process
The third step is conducting your external audits.
Each year the auditors will want to review the process procedures and results of your risk management program.
The auditors will come in, they will review the printed documents, and the procedures, confirm that the risk management program is performing as expected, note deficiencies that may exist due to regulatory or best practice changes since the last audit, and then provide recommendations on changes and updates to procedures.
The new way of doing this is the auditors can be given read-only access directly to the system and they can review the configuration rules and results in place, directly on the system along with the audit log, showing exactly how the system was used.
They can make quick empirical observations of the entire process and result in a single system. As a result, the analyst can address deficiencies on the spot and get auditors to sign off for the configuration changes very quickly.
Having a digitally integrated compliance platform, audits and their remediation become much faster, much cheaper, and 10 times more efficient.
The fourth step in your audit and reporting process
The fourth step is reporting to the regulator.
Periodically regulatory authorities will want to review your process procedures and results of your risk management program and they’ll review the documents provided.
Sometimes they’ll provide a template or a questionnaire that needs to be filled out and then this information needs to be collected and provided in the format that the regulator has asked for.
The new way is that the analysts using an integrated digital system can produce detailed records including the documents, assessments, and audit notes all in a single zip file for the regulator in standard formats with the push of a button.
The regulators can verify that the risk management program is effective and working without having doubts as to the manual process steps and any undocumented decisions.
Furthermore, when they do provide templates that need to be filled out, the data can be quickly exported from the system and transformed into the answers in the template that the regulatory authority would like to see.
With the integrated digital platform, the compliance process becomes holistic, transparent, and simplified so that fines for deficiencies or errors should never happen.
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Looking forward to meeting you.
