CAE Agenda: Your Monthly Audit News Roundup - September 2020



Our team has collected the top internal audit news, insights and resources for financial services organizations to help you and your teams.

Thank you for reading the September edition of the CAE Agenda.



Exploring the Next Generation of Internal Auditing

2020 Internal Audit Capabilities and Needs Survey Report

In recent years, mammoth waves of disruption have both buffeted and ignited organizations in their drive to change and stay relevant. Not surprisingly, internal audit functions have seen the effects. It’s now time for internal audit leaders and their teams to take the initiative, stand up and ride their own wave of transformation and innovation.

Next-generation auditing capabilities, processes and tools — from strategic vision, agile auditing and dynamic risk assessment to artificial intelligence (AI), machine learning and process mining, among others — should be pressing priorities for the internal audit function to build and grow as their organizations continue to transform and stakeholder expectations for these capabilities rise. The results of our latest Internal Audit Capabilities and Needs Survey show that audit committees certainly hold this to be true. At present, too many internal audit teams are not adequately prepared to commit to difficult but necessary transformation.

Internal Audit - Next Generation


Agencies Issue Three Final Rules 

August 26, 2020 

On August 26, the federal bank regulatory agencies finalized three rules, which are either identical or substantially similar to interim final rules currently in effect that were issued earlier this year. They include:

  • A final rule that temporarily modifies the community bank leverage ratio, as required by the CARES Act.
  • A final rule that makes more gradual, as intended, the automatic restrictions on distributions if a banking organization’s capital levels decline below certain levels.
  • A final rule that allows institutions that adopt the current expected credit losses (CECL) accounting standard in 2020 to mitigate the estimated effects of CECL on regulatory capital for two years.


Read News Release



FDIC-Insured Institutions Reported Lower Profitability but Strong Liquidity and Higher Capital Levels in Second Quarter 2020

August 25, 2020 

On August 25, the Federal Deposit Insurance Corporation (FDIC) reported that commercial banks and savings institutions saw a decrease in net income of 70% from a year ago, while liquidity and capital levels remained very strong to meet loan demand and absorb any losses in the future.


Quarterly Banking Profile Homepage



FSB Publishes Key Attributes Assessment Methodology for the Insurance Sector 

August 25, 2020

On August 25, the Financial Stability Board (FSB) published a Key Attributes Assessment Methodology for the Insurance Sector. The methodology sets out essential criteria to guide the assessment of the compliance of a jurisdiction’s insurance resolution framework with the FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions. It was developed in collaboration with experts from FSB jurisdictions, relevant standard-setting bodies, the International Monetary Fund and the World Bank. It is designed to promote consistent assessments across jurisdictions and to provide guidance to jurisdictions when adopting or amending their resolution regimes to implement the Key Attributes.


Download Methodology



Agencies Issue Statement on Bank Secrecy Act Due Diligence Requirements for Customers Who May Be Considered Politically Exposed Persons

August 21, 2020

On August 21, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network, the National Credit Union Administration, and the Office of the Comptroller of the Currency today issued a joint statement clarifying that Bank Secrecy Act (BSA) due diligence requirements for customers who may be considered “politically exposed persons” (PEPs) should be commensurate with the risks posed by the PEP relationship.


Read Joint Statement



Basel Committee Releases Consultative Documents on Principles for Operational Risk and Operational Resilience

August 6, 2020

Given the critical role played by banks in the global financial system, increasing banks' resilience to absorb shocks from operational risks, such as those arising from pandemics, cyber incidents, technology failures or natural disasters, will provide additional safeguards to the financial system as a whole. Recognizing that a concerted operational resilience effort may not prevent a significant shock resulting from a specific hazard, the Basel Committee seeks comment on proposed Principles for Operational Resilience that aim to mitigate the impact of potentially severe adverse events by enhancing banks' ability to withstand, adapt to and recover from them. Comments are due by Friday, November 6, 2020.


Read Consultative Paper



Regulating Fintech Financing: Digital Banks and Fintech Platforms

August 6, 2020

Financial authorities face the task of deciding whether their regulatory framework needs to be adjusted to account for new fintech activities. To do so, they will need to consider a number of elements. This paper explores how digital banking and fintech platform financing are regulated and provides a cross-country overview of the regulatory requirements for fintech activities in 30 jurisdictions.


Read Paper


Join Us at the Virtual 2020 IIA FS Exchange!

Upcoming – September 14, 2020
On Monday, September 14, join Protiviti’s Doug Wilbert for the segment "The Road to Resiliency – Building a Robust Audit Plan for Operational Resilience" at the session "Internal Auditor's Role in the New Normal – Sound Bite" alongside audit executives Theresa (Terry) Grafenstine (Citi), Seth Morgan (Scotiabank) and Kevin Bertscha (BNY Mellon). Moderated by Julie Scammahorn, chief auditor at Wells Fargo, this session will discuss leading practices for providing comprehensive assurance over operational resilience programs to include key resiliency concepts and critical questions every chief audit executive should ask, as well as operational resilience in the face of a pandemic and the role of audit in business continuity.

Join Us for the Tech Insights Webinar Series! 

Upcoming - September 10, 2020
This series brings together our top tech experts, who will deep-dive into technologies that enhance your business. From cybersecurity to the cloud, we break it down for you and provide actionable insights for success.
Moving Forward with Business Continuity and Resilience” | September 10 at 2 p.m. ET | Companies must prepare for future disruptions in this new economic environment. How has the pandemic impacted your continuity planning? What key areas need additional focus today?

As Regulators Boost Market Surveillance Capabilities, Firms Should Enhance Self-Monitoring to Reduce Trading Violations 

August 31, 2020
Following the single largest civil monetary penalty ever ordered in a spoofing case on August 19 by the Commodity Futures Trading Commission, Protiviti’s Doug Wilbert lays out five recommendations for firms to quickly find and identify market abuse transactions.

Ongoing Risks of Government Lending Programs 

August 20, 2020 
Protiviti’s Carol Beaumier summarizes key takeaways from a live webinar during which Protiviti subject-matter experts addressed the current bank regulatory environment, credit risk issues, and fraud and compliance issues related to government grant and lending programs – specifically, the Paycheck Protection Program.

Using FAIR to Understand Change in Resilience Risk

August 20, 2020
As policies and technologies change with time, organizations need to adopt effective methods to quantify the degree of downtime that will cause irreparable harm to their business.
This recorded webinar is a step-by-step walk-through from the primary authors of Protiviti’s latest thought leadership piece, Understanding Changes in Resilience Risks from Technology Advancements.

Know Your Customer: It’s All About Risk

August 11, 2020 
Following two recent publications – FinCEN's update to its customer due diligence FAQs and the Wolfsberg Group’s FAQs on Source of Wealth and Source of Funds – which both reinforce the importance of developing and implementing risk-based KYC standards, Protiviti’s Carol Beaumier lays out seven questions AML compliance officers and their senior management should be asking.

Driving Operational Resilience

Searching for the ‘New Normal’ – A Business Continuity Planning Update

This podcast reviews the financial services industry's early implementation of business continuity planning during the pandemic and looks forward to where the industry might be headed. Kenneth E. Bentsen Jr., president and CEO of the Securities Industry and Financial Markets Association (SIFMA), sat down with Ron Lefferts, global leader of technology consulting at Protiviti, and Tom Price, a managing director at SIFMA and head of its technology, operations and business continuity team, to explore the story behind the industry's business continuity planning efforts in the face of the global pandemic.


Listen to Podcast

For more insights on Operational Resilience, visit here 


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