Cases illustrate risk that banks' own employees can pose | EU-US standoff continues over banks' risk models | Banco Popular collapse shakes small Spanish banks
June 20, 2017
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Internal Audit Watch
Commentary: Tech must drive banks' internal audit function
Bank regulations are becoming stricter in places such as the Gulf Cooperation Council region, and technology -- including IT monitoring and big data analytics -- must be a crucial part of internal auditing, writes Biju Nair, head of internal audit at Noor Bank.
Gulf News (United Arab Emirates) (6/18) 
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Cases illustrate risk that banks' own employees can pose
Insider threats in the form of banks' employees are becoming a major threat to the institutions, with robberies and fraud cases attributed to workers and vulnerability emerging from lapses in controls. "While the banking system is stringent on 'know-your-customer' norms, knowing your employees has also become equally important at present," says Yubaraj Khatiwada, former governor of Nepal Rastra Bank.
Republica (Nepal) (6/6) 
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eBook: Your guide to balancing risk and performance
As a finance leader, you've got heavy responsibilities. You bear the burden of managing financial risk, cash flow, strategic investment, and compliance. This balancing act, while also improving productivity is no easy feat. Learn what appropriate actions to take so you can focus on maximizing performance. Download your eBook here >>
Risk Management
EU-US standoff continues over banks' risk models
Officials from the US and the EU concluded talks in Sweden without agreeing on global rules for banks' risk modeling. The Basel Committee on Banking Supervision will continue to work toward a consensus on the extent to which banks can rely on proprietary risk models to calculate capital requirements, a committee official said.
Reuters (6/16),  MLex (subscription required) (6/16) 
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Banco Popular collapse shakes small Spanish banks
Smaller Spanish banks such as Liberbank and Cajamar have seen their tier-two bonds plunge after Banco Popular's failure this month, with Spain's stock market regulator banning Liberbank short selling.
Financial Times (tiered subscription model) (6/12) 
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BoE tells banks to push on with ring fencing
James Proudman, the Bank of England's executive director of deposit takers supervision, told UK banks they must proceed with the requirement to ring-fence deposit activities by 2019, despite the uncertainty of Brexit and other regulatory changes. The requirement aims to protect taxpayers from having to rescue banks.
The Telegraph (London) (tiered subscription model) (6/16),  MLex (subscription required) (6/16),  Reuters (6/16) 
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Five disruptive technologies driving opportunities
To take advantage of these emerging technologies and to be able to innovate, companies must move towards establishing alliances with key partners. Read moreā€¦
Regulation & Compliance
Experts discuss how "regtech" can best aid banks' compliance
Regulatory technology is not a blanket compliance solution for banks, because human regulators' discretion is a key part of the mix. Banks, however, can apply technology to certain aspects of regulatory oversight, such as consumer complaints, to improve compliance, experts say.
Banking Exchange (6/13) 
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Mnuchin: Legislation unneeded for 80% of Treasury proposals
Eighty percent of "critical" Dodd-Frank Act changes the Treasury Department has proposed can be accomplished without congressional approval, says Treasury Secretary Steven Mnuchin. Among them are revised calculation of leverage ratios and less frequent stress testing of banks.
Bloomberg (6/14) 
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SEC enforcement chiefs prioritize cybercrime
The Securities and Exchange Commission has appointed two enforcement chiefs, Stephanie Avakian and Steven Peikin. In a joint interview, the pair said that cybercrime poses the greatest threat to the industry and that they intend to take particular action to curb it.
Reuters (6/9) 
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Financial Services Exchange, Washington, D.C.
As the regulatory environment becomes more complex, the Financial Services Exchange is the event for internal auditors to learn and share leading practices to navigate through the associated risks. Earn CPE credits, gain expertise, and leave better prepared to meet heightened regulatory standards and stakeholder expectations. Sept. 18-19. Register early!
Fraud & Ethics
Goldman, Citigroup execs fall victim to email deception
Goldman Sachs CEO Lloyd Blankfein and Citigroup CEO Michael Corbat have been deceived in an email hoax, following a similar campaign that targeted Barclays CEO Jes Staley and Bank of England Governor Mark Carney. No sensitive information was revealed in the hoax.
Reuters (6/12) 
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IIA Webinar: Financial Services Perspective from D.C.
The 2017 regulatory environment in the financial services industry continues to evolve. Policies are being put in motion to challenge the Dodd-Frank Act. Representatives from Arnold & Porter Kaye Scholer in Washington, D.C. will lead an insightful discussion on the potential impact of the events in Washington D.C. July 13. Earn 1 CPE credit. Register now!
AI, machine learning changing the game for financial sector
Powerhouse financial firms are leveraging the capabilities of machine learning and artificial intelligence. These technologies have implications for everything from fraud prevention to trading strategies.
The Economist (tiered subscription model) (5/25) 
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Trust Your Quality to the Experts
Build confidence with your stakeholders through a solid Quality Assurance and Improvement Program (QAIP). IIA Quality Services, LLC provides the tools, expertise, and services to support your QAIP. Learn more.
IIA News
Knowledge Brief: Value of data analytics
Continuous auditing and data analytics can provide a broad spectrum of benefits to internal audit. But internal auditors should look at data first and use it to drive creation of the internal audit program, rather than the other way around. Read more.
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Emerging risks survey results
Continuous monitoring, "as needed" updates to audit plans and collaboration with other control partners help to identify emerging risks. But fewer than half of FSAC webinar attendees have adopted these practices. Download the infographic.
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With ordinary talent and extraordinary perseverance, all things are attainable.
Thomas Fowell Buxton,
politician and abolitionist
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About the IIA Financial Services Audit Center (FSAC)
FSAC is an IIA specialty center for audit professionals in the banking, asset management, and insurance sectors. FSAC advances the professional practice of auditing in the financial services industry through thought leadership, education and training events, professional guidance, and advocacy. Learn more about FSAC and how you can add the center to your IIA membership.
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