Fintech has been and will continue to be disruptive. It is a risk to be managed. The digital age is changing all aspects of financing. Internal auditors need to be tech savvy to provide the level of assurance that audit committees are, or should be, asking for. Are you ready?
Take a little time with us to think about the risks relevant to your organisation, questions for internal audit and where the trends are taking this new sub-sector. All organisations are either customers of or part of the financial services sector so this should be of interest to all audit leaders.
The importance of fintech
Fintech or financial technology is the generic term for computer programs and other technology used to support or enable banking and financial services. We focus on third-party fintech within this article, recognising that in-house developments will be within the control and governance of the organisation.
It has changed the way the money game is played. People and organisations have welcomed disruption of the traditional approach, particularly wanting access 24/7 on a variety of devices. It is as much an opportunity as it as threat to existing business models.
Prior to 2008, the financial sector was, for many, like a respected member’s only club. The financial crisis eroded that respect and trust. In the years that followed, technology hit an exponential trajectory and a new generation of digital natives (people growing up with smartphones and tablets) entered the marketplace.
This combination of factors led to new companies challenging the establishment with new technologies like blockchain and artificial intelligence changing the way people and organisations interact financially; key areas being payments, insurance, planning, trading and investments, lending/crowdfunding, data analytics, and security.
Like all technology, the innovation is fast paced.
Research by EY shows the adoption rate…