As banks' senior management and boards of directors become increasingly focused on once-obscure matters such as regulatory compliance, financial reporting and fraud detection, the necessity for the internal audit function to be more effective and accurate has become ever-more acute. That requirement is what recently motivated Tacoma, Wash.-based Columbia Bank to upgrade its internal audit operations with Monarch, a report mining desktop software from Datawatch (Lowell, Mass.).
"Banks and other organizations typically look to traditional audit software to analyze data for internal auditing," says Frank Slepko, an auditor with Columbia Bank, which has more than $1.6 billion in assets and 36 banking offices in the Seattle-Tacoma area. "Our bank has such audit software, as well. But all too often, such audit software packages prove to be very difficult to use on an everyday basis."
To get the information they need, the bank's auditors use Monarch to transform existing reports, which could be several thousand pages long, into live data, without any programming"giving them access to information they wouldn't otherwise have. For example, Slepko may only want information on NOW accounts that are larger than $1,000. A traditional audit system would produce unnecessary information that also may be hard to read because of the amount of data generated. Using simple commands, Monarch can capture that information off the report. Monarch also allows Slepko to compare data from previous months or years, as well as to generate reports for bank regulators who request specific information. Monarch can extract data from any ANSI or ASCII report file, of any size. It supports many file types, including Excel, Access, 1-2-3, dBase, Paradox, delimited text and HTML.
The system also helps Slepko and his colleagues look for possible instances of fraud. They can extract customer names, account number amount of checks and the dates of all manual deposits, import that information into a spreadsheet and summarize it. From that summary, they can find out which customers are making the most annual deposits"a figure that often can be helpful in determining unusual activity (a key indicator of fraud).