How (And Why) The Mechanics Of Financial Technology Matters

Image credit: ERP Maestro

ERP Maestro has been established to automate all IT-related access to a firm’s financial records.

Business used to be done on paper and accountants would manage vendors, pay accounts and dutifully fill out balance sheets in exacting detail, employing their a) unearthly ability to understand double entry book keeping and b) desire to want to pore over business administration figures in minute detail.

But then, the industrial revolution(s) 1.0, 2.0 and 3.0 all happened and we found that technology could give us spreadsheets, forensic accounting analysis applications and higher-level Enterprise Resource Planning (ERP) suites. Of course with great (technology) power comes great responsibility. So how do we control the internal mechanics of our financial technology systems to make sure that staff and stakeholders only use them to do what we want them to?

It comes down to managing internal controls for access including a key practice known as Segregation Of Duties (SOD).

Segregation Of Duties

CEO and founder of ERP Maestro Jody Paterson explains that his firm has been established to automate all IT-related access to a firm’s financial records. Specifically, ERP Maestro manages access risk, compliance and security in SAP environments through its cloud-based software as a service (SaaS) platform.

An ex-KPMG audit specialist, Paterson explains that SOD and Control Monitoring is not the same as Identity Access Management (IAM) and that IAM vendors in fact want to build SOD into IAM, where possible.

“Okay so here’s a working example: when a new supplier is signed up by a company, the financial team will enter all their details into the company’s financial records and set up the procedures needed to process payments to them. The staff who set up that procedure in a large enterprise should not also have the ability to ‘actually’ pay that supplier. The risk is that an employee could defraud the company. Segregation of Duties ensures that these kinds of risks are spotted and prevented. That’s Segregation of Duties in motion,” said Paterson.

This process is essentially put in place to stop fraud, where a financial services employee could set up a new payee and then pay them. In the event of that happening, ERP Maestro provides what it calls Conflict Reporting, i.e. an anomaly gets logged when someone initiates an action that they are not supposed to. The results of these analyses are then ultimately flagged for a business manager to view in a visual dashboard.