Knowledge & Insight

The latest hot topic in Financial Services - IT Internal Audits

Wed 21 March 2018

Despite the seismic shift in regulatory compliance that has taken place in financial services over the past decade, according to the latest research by Deloitte, it is the IT department that’s keeping senior executives awake at night. Under pressure to deliver greater operational resilience, to combat growing cyber threats and to manage governance of the new General Data Protection Regulation, IT Directors and CIOs are wrestling with diverse challenges. And as firms’ systems, and the demands put upon them, become ever larger and more complex, so the pressure grows on IT Internal Audit to provide assurances that risk management, governance and  control processes are operating effectively. And this is felt differently across different financial services sub-sectors.

Capital Markets

Technological agility remains a core asset for Capital Markets firms, as demonstrated by the different ways organizations coped with the new directives set out in MiFID II. The ability to comply with major regulatory change without jeopardizing data quality or operational efficiency has become a clear competitive differentiator, and this is becoming increasingly evident as firms strive to manage strategic change in the face of an evolving commercial climate, and to design and implement Enterprise Technology Architecture that delivers flexibility, availability, performance and resilience.


The continually evolving regulatory environment features strongly in the list of concerns facing insurance executives, as does the challenge posed by GDPR. Whilst GDPR has been on the agenda for some time, it seems likely that some organisations have failed to fully comprehend the impact it could have on their businesses. The Deloitte research also reveals that insurance firms are keeping a close eye on emerging technologies such as Robotic Process Automation and blockchain-enabled applications. And while some emerging technologies present exciting new opportunities, others promise a level of market disruption that could present a significant threat to established players.

Retail Banking

The Deloitte study revealed that Disaster Recovery and Resilience remain high priorities, while Internal Audit were looking for detailed contingency plans to manage a range of adverse scenarios. Auditors are particularly focuses on mitigating the risk of systems failures and sophisticated cyber attacks, given their potential to cause contagion across the wider financial system. System availability and performance are also key considerations for auditors in this sector, and this challenges firms to optimize availability in the face of an increasingly complicated regulatory framework. While for banks running aged legacy systems, even relatively simple regulatory changes can cause significant upheaval.

Talent development and retention

Technical obstacles aside, one of the main challenges facing financial services organisations lies in the recruitment and retention of suitably skilled Internal Audit professionals. Remuneration for those with sought-after expertise and experience continues to climb, yet many Internal Audit departments face tight budgetary constraints. So the challenge for leaders is always to deliver improved results, but with fewer resources. Effective talent development is therefore a critical success factor, together with the ability to build, develop and retain high-performance teams with the skills to tackle a diverse and evolving web of risks.

Stone Executive has an outstanding track-record of helping clients attract the brightest talent in the Financial Services sector, and our Financial Services and Internal Audit executive headhunters are ideally placed to identify and engage high-calibre candidates for a wide range of senior leadership and board level roles.

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