Data automation and role of Internals Control

In my previous article (read here) I discussed about the need for automation in companies and why this change is inevitable.

With this change also comes the change in the outlook and role of the risk and internal controls team, who takes care of the data management.

Primarily, internals control establishes a process for how your business handles the receiving and reporting of money and other administrative tasks. The IC team, looks after setting up of the controls to handle the data input and flow of funds. They generally handle the protocols to prevent frauds and mistakes involving misappropriation of funds and data. Thus, they play a role of establish-er and executor of the controls in the company.

With this introduction of automation in the controls, the roles and responsibilities of the Internal Controls team has taken a paradigm shift. When traditionally they used to set procedures, overlook the process and application of systems, the team now has to do much more than that.

To have a better access to risk controls, and handling of the new possible risks, they need to become strategists. Calling them data scientist, they need to analyze reports and testing methods regularly to come up with innovative ways of applying the protocols and processes. They become the compliance officer, who have to be careful in setting up the processes so that none of the compliance are left over. With ever changing laws and technologies both, their creative thinking and application comes in play, so that a small change in the system is only required for small amendments to law, without affecting the whole data.

Let us look at few skills of the Internal Controls team, that they need to take care of –

1)     Constant Up-skilling – With rapid introduction and change in technologies, the team need to be fully updated with the changes, so they can make amendments in the system to incorporate those deviations. Here, they need to be technically upgraded as well.

2)     Software Knowledge – The team needs to be trained regularly with introduction of new software and also be equipped with proper support of usage of the software. The market is getting flooded with innovative software, that can change the working of the controls department, but the company needs to support the team with constantly upgrading their knowledge.

3)     Scope of Work – With the change in the scenario, the scope of work and the roles and responsibilities of the team also increases. From simple executor, they have turned into strategist and hold high responsibility for the compliance as well.  

4)     Proactive – 1 small change can disrupt the whole data management. And this results in the team acting proactively in applying the small changes in the protocols, and setting up creative settings to handle the amendments in the compliance. The team needs to show more diligence and awareness towards the laws and compliance needed, with upgradation of the technologies as well.

5)     Tools of Testing – Automation also introduces and results in new testing tools. The company needs to make sure the IC team is well equipped and trained with the same.

The role of the Internals Control team in an organisation, with the automation of the processes, has become a crucial topic for the management. They have become the backbone of the application of the automated system and the first touch point to take care of the protocols. So, lets empower this team with the due recognition and support they need.

In my next article I will be speaking about the various pros and cons of this automation in the controls.