“Business and government face significant challenges to keep pace with a dizzying array of rapidly emerging and evolving risks. The internal audit profession is in an ideal position to help them, but we must have the right talent at our disposal to provide that assistance.”
~ Richard F. Chambers, President and CEO, The Institute of Internal Auditors (IIA)
Not long ago, we examined the wide-reaching and hugely important assurance and advisory impact of internal audit (IA) for banks. It’s an objective source of confidence for stakeholders, generates proof of compliance, and a way to ensure the health of your reputation, growth, and corporate governance. It’s one of the most reliable ways to remain informed about where you stand with regard to market challenges, risks, and opportunities. Access to a mature IA resource is more important than ever in the current environment, which is riddled with risks ranging from political, economic, compliance and security.
Yet of the 40% of chief audit executives who say that attracting and retaining skilled IA executives is a priority, more than half (54%) also report struggling to fill skill gaps on their audit teams. This is largely the result of increased competition for a limited talent pool, new and changing regulations, particularly in banking and financial services industries, and the necessary skill sets resulting from new risks, technologies, and markets.
For example, the widest gaps between IA needs and available expertise are in IT, cybersecurity and privacy and data mining and analytics. If recruiting and training are focused solely on historic finance and internal controls skills, the bank may be leaving itself exposed to a host of risks.
Ironically, evaluating whether your bank has a robust enough IA function and building a plan to ensure its sufficiency requires a sort of audit approach.
Not surprisingly, budgeting plays a large role in turning the talent shortage around. The expertise and workload for IA executives are said to have increased by as much as 33%, which has translated into a need to increase training budgets by as much as 25% and compensation budgets by 28%. Consequently, a large majority (upwards of 88%) of banks and financial services companies say they will retain or increase their IA budgets in the near future.
As is clear from the (albeit small) difference between retention and recruiting budgets, it’s still more advantageous for banks to put their focus on enhancing their current IA staff. This may be the silver lining in a significant challenge. Your solution to this pressing talent challenge may exist within your organization already. Consider whether you have outlined a clear path for your IA team members, foster a learning culture that provides opportunities to grow, challenge them with interesting and meaningful work, and express value for the work they do.
Remember, IA can be a competitive advantage. Just keep in mind that the resource you are engaging to take your institution forward with clarity, security, and compliance is a person – not just a role to fill.
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