Banking Information System
Audit & Compliance in IS
Lecture VII: Financial services vs. Production and retail businesses. Retail banking and insurance: core business processes. Banking information system.
1
Session objectives
Upon the end of the session students should be able to: Discuss financial services and typical business processes Describe the value chain in a retail banking and an insurance client List the key sub-processes in financial business processes Understand the activities and financial risks in the FS industry
2
Recap
Explain the links
3
Question:
What is the distinctive feature of financial services industry?
4
5
6
7
Deposits
Account opening Deposits Withdrawals Interest calculation & payment Standing data
Account Opening
◦ Money laundering, proceeds of crime and fraud are a risk to any bank ◦ At the account opening stage identity verification is vital ◦ Many laws and regulations so there’s likely to be a large compliance element to the account opening process ◦ Need to think about sales channels branch/postal/internet etc
Deposits
Customer deposits money Bank records deposit
How much? Which account?
Bank holds money
Telephone ATM Mail
THEFT LOSS
Internet
MONEY LAUNDERING
Withdrawals
Request for withdrawal Verify identity Check funds & Terms & Condition s Withdraw money & update accounts
Telephone ATM Mail
THEFT LOSS
Internet
MONEY LAUNDERING
Interest
Calculate interest Apply interest to accounts
Incorrect calculation and recording of interest
= Incorrect financial statements & reputational damage
Restricted Access Change controls
Loans
Operating processes Customer deposits 4 1 2 Perform Design planning & products management & services 3 Market & sell 6 Manage assets & investments
5 Loans to customers
Loans – sub-processes subApplication Arrangement and disbursement Collections Arrears Interest Standing data
Loans - Risks
What are the risks to
Lecture VII: Financial services vs. Production and retail businesses. Retail banking and insurance: core business processes. Banking information system.
1
Session objectives
Upon the end of the session students should be able to: Discuss financial services and typical business processes Describe the value chain in a retail banking and an insurance client List the key sub-processes in financial business processes Understand the activities and financial risks in the FS industry
2
Recap
Explain the links
3
Question:
What is the distinctive feature of financial services industry?
4
5
6
7
Deposits
Account opening Deposits Withdrawals Interest calculation & payment Standing data
Account Opening
◦ Money laundering, proceeds of crime and fraud are a risk to any bank ◦ At the account opening stage identity verification is vital ◦ Many laws and regulations so there’s likely to be a large compliance element to the account opening process ◦ Need to think about sales channels branch/postal/internet etc
Deposits
Customer deposits money Bank records deposit
How much? Which account?
Bank holds money
Telephone ATM Mail
THEFT LOSS
Internet
MONEY LAUNDERING
Withdrawals
Request for withdrawal Verify identity Check funds & Terms & Condition s Withdraw money & update accounts
Telephone ATM Mail
THEFT LOSS
Internet
MONEY LAUNDERING
Interest
Calculate interest Apply interest to accounts
Incorrect calculation and recording of interest
= Incorrect financial statements & reputational damage
Restricted Access Change controls
Loans
Operating processes Customer deposits 4 1 2 Perform Design planning & products management & services 3 Market & sell 6 Manage assets & investments
5 Loans to customers
Loans – sub-processes subApplication Arrangement and disbursement Collections Arrears Interest Standing data
Loans - Risks
What are the risks to