Digital Transformation in Financial Services: Impact on Audits and Future Readiness

How Digitalization Impacts Financial Services Companies and Their Audits

Zeynep Deldag EY Global EMEIA Financial Services FSO Assurance Digital and Innovation Leader, EMEIA FSO Financial Accounting Advisory Services Partner at Ernst Young Nederland LLP

5 minute read

January 13, 2020

Introduction: The digital revolution transforming the financial services industry is reshaping not only how companies conduct their business operations but also influencing the audit process of financial institutions.

The financial sector is undergoing substantial digital transformation, fundamentally changing the way traditional banking and insurance businesses operate to meet client expectations while navigating a highly regulated landscape. These changes are empowering established fir enhance service delivery and efficiency through technology, while enabling new competitors like payment services providers to disrupt the market.

Companies across the financial industry, from banks to insurers, are embracing automation in their operations. Technologies such as blockchn, data analytics, the internet of things, and robotic process automation RPA are being leveraged to improve efficiency, streamline processes, and support innovation. Cloud infrastructure is increasingly favored for its cost reduction benefits, enhanced security capabilities, scalability potential, flexibility, and capacity to support big data and analytics initiatives.

Automation plays a pivotal role in financial services companies, allowing administrative tasks to be automated while freeing up resources to focus on value-added activities like analytical assessment of judgements and strategic insights. This is particularly relevant considering the implications for accounting standards.

Preparation for an Audit: CFOs, CTOs, and audit committee members should take proactive steps to ensure their organizations maximize the benefits from a digitalized audit process while achieving transparency. The article by Hermann Sidhu titled Is Connectivity Within the Digitalization of the Audit an Overlooked Opportunity? offers specific recommations on how companies can prepare for such audits.

The Future of Digital Auditing: As financial services evolve, so does the auditing landscape. Auditors are continuously refining their methodologies to align with technological advancements in various sectors and leverage new tools for more insightful insights into company operations, enhancing risk assessment procedures with professional skepticism.

Summary:

Financial services undergo a digital transformation that not only modernizes operational methods but also optimizes audit processes. By utilizing technology effectively, auditors can provide deeper understanding, constructive scrutiny, improved risk management strategies, enhanced efficiency, and greater transparency to financial service organizations.

In :

Zeynep Deldag EY Global EMEIA Financial Services FSO Assurance Digital and Innovation Leader at Ernst Young Nederland LLP

Works with global banking and insurance leaders on their CFO aga, including assurance services and large-scale transformation programs. Passionate about empowering businesses through technological innovation.

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