Due to the COVID-19 pandemic, many of us are facing different kinds of challenges and started new ways to deal with them. Starting from February, we will have different alumni from East Asia region to share their insights and stories in the newsletter and monthly What's On in 2021.
Digital Transformation in Banking and Auditing
Mr. Ronnie Ip
COVID couldn’t have come at a better time. Out of context, this may seem like a strange or even downright bizarre statement, but what I’m referring to is the opportunity for rapid change it has provided me and my organisation. As the head of Greater China Internal Audit at DBS Bank Ltd., adopting digitisation and data analytics has been in the very forefront of our mission for many years. From upskilling our existing staff with analytics knowledge to seeking out data scientists through our new digital hiring programme, we have begun to shape our team to best suit the needs of the future of auditing. Amidst our transformation, we were suddenly no longer allowed the luxury of gradual change, but instead found ourselves facing down the ultimate challenge.
Traditionally, auditing has been a very ‘physical’ occupation, often requiring many hours of travel to reach the auditee’s office before setting up camp in their meeting room and pouring over messy paperwork for months at a time (I myself have done audit fieldwork from Sao Paulo to Kathmandu). With our movement restricted, auditors could not move from branch to branch, and we were left stuck with a dilemma - how do we audit something remotely?
As a result of our prior years of preparation and transformation, I believe there were three key elements that ultimately came into play: our robust digital infrastructure, our flexible Agile mindset, and our use of data analytics to identify risk areas.
Our bank first began to build up our digital infrastructure by issuing each of our staff with their own personal laptops, then later with VPNs and monitors. By the time COVID struck, all our staff were well armed with the necessary equipment to seamlessly transition from the office to the dining room table. Along with this came more flexible working hours and more efficient communication between colleagues through Teams and Webex. Much quicker to strike up an ad-hoc video call rather than schedule a 30-minute meeting only to ask a question or two!
During this time, we also began to introduce our Agile auditing methodology. Prior to this, auditing used to be a non-stop flow of requests for information, whereupon the auditor mill over the provided documentation for months on end before finally delivering a big stack of issues to the audit. We wanted to break away from this policing mindset; rather than us resembling a punctilious parent ‘helicoptering’ over our child’s every move, we would instead encourage our auditees to cooperate with us in finding issues together. We believed that this culture of openness and transparency would eventually lead to a bank-wide enhancement of risk awareness and control effectiveness.
Of course, the purpose of this article isn’t just for us to pat ourselves on the back (however much this may seem to be the case). We must thank our auditees heartily for taking a leap of faith with us when we first trial ran the Agile auditing system. There were many concerned and sceptical stakeholders in the beginning, especially when they were told we required unconditional transparency and frequent contact for this system to work (being completely open with the guy rummaging through your paperwork - could you imagine?) Nevertheless, both our auditors and auditees persevered; currently over 95% of our audits are conducted using the Agile methodology.
On the data analytics front, relying on the business knowledge of our auditors and technical expertise of our data scientists, our team has created a dashboard application to remotely review all branches across our region before the audit began. This allowed for a more efficient and comprehensive assessment of our bank’s controls than ever before. In future, we plan to continue the enhancement and expansion of these tools to eventually cover all of the bank’s processes, with the ultimate goal of pre-empting issues before they even appear.
Naturally, living and working during a global pandemic isn’t all sunshine and rainbows. With many of our staff remotely working and away from their teammates, it was easy to let team morale slip. Even our annual dinners were cancelled for two years in a row. To remedy this, we ordered pizza delivery to the doorstep of all our staff working remotely during our Townhalls, and together we shared many slices of happiness and team spirit through our Webex video chat screens.
There are countless examples I could use to explain how COVID has changed the way we work, and indeed there have been changes both for good and for bad. What I can definitely attest to, is that our preparation and our flexibility has allowed us to overcome these challenges and emerge with a working model more robust and efficient than ever.
*The views and opinions expressed in this section are those of the authors and do not necessarily reflect the editorial positions of UoM East Asia Centre.
Manchester Global MBA Alumnus: Mr. Roonie Ip
Ex-Head of Audit
DBS Bank Ltd (Hong Kong)
Ronnie is the Head of Audit for DBS Bank Ltd (Hong Kong) and recently retired from his post. In DBS, Ronnie responsible for all digital, retail, corporate and investment banking businesses for all Greater China. Have over 25 years of internal audit, compliance, risk management, and governance experience from fast growing Asian, European, and US banks. Specific skills include control assurance, corporate governance, change management, regulators management, enterprise risk management, and business compliance. Market leader in driving the adoption of advanced data analytics, risk culture assessment, and Agile methodology.