Banking
IDEA is useful in most areas of banking including current accounts, personal and corporate lending, treasury functions and
investment accounts. The usual guidelines on volume and depth apply. However in some banking systems the volume of
transactions can be too great to download to PC. It may be appropriate to download a segment of the data (e.g. a region) or
a selected number of fields.
Accounts
There are a number of tests that apply to most account types:
There are a number of tests that apply to most account types:
Calculation
- Total the ledgers
- Total account balances
- Re-perform interest calculations
- Check calculation of bank charges, currency conversions
Exception Tests
- Identify accounts with missing standing data (e.g. date of birth)
- Check charges are being raised where appropriate
- Isolate any forward dated transactions
- Identify invalid or unusual standing data
- Identify dormant accounts and transactions thereon
- Identify accounts with statement suppression
- Identify customers over their overdraft limit or have expired limits
- Identify overdrawn staff accounts
- Test for money laundering
Other typical areas of tests include:
Asset Management
- Compare book and tax depreciation and indicate variances
- Identify fully depreciated items and assets higher than replacement cost
- Recap asset values, in value order, by net or cost amount
- Recalculate expense and reserve amounts using replacement costs
- Compare useful lives of assets by category
- Extract assets with useful lives or depreciation rates beyond set norms
Deposit Accounts
- Check interest and service charge calculations
- Identify data input coding errors
- Analyze transaction activity
- Compile demographic information for compliance examinations
- Age interest bearing deposits by maturity date to analyze interest rate risk
- Analyze account activity and services used by type of account to evaluate service charge and interest pricing structures
- Analyze deposit portfolio by servicing officer, location, customer type, etc,
Other Applications
- Verify data processing information prior to and after software upgrades or conversions
- Summarize transactions by time period and location to analyze staffing needs
Investments
The following tests are relevant where the accounts are interest bearing deposits from customers.
Analysis
- Stratify balances by size
- Group accounts by product type
- Age investment portfolio to analyze interest rate re-pricing risk
- Stratify portfolio by size
- Summarize portfolio by type, issuer, interest rate, maturity, etc,
- Create charts of investment portfolio information
Calculations
- Total accrued interest
- Prove interest capitalization, charges
- Re-perform individual interest calculation
Exception Tests
- Extract unusual interest rates or amounts
- Identify/Summarize dormant accounts and identify transactions thereon
- Identify negative balances
- Identify accounts with statements suppressed
- Identify any records that are not complete or up-to-date
- Test for money laundering
Many of the previous tests are applicable to current or checking accounts. There are also a number of tests that can be carried out when searching for money laundering.
Other tests applicable in certain cases include:
- Identify forward dated transactions
- Provide totals of forward dated transactions
- Identify overdue maturities
- Identify customers over their overdraft limit or customers with expired limits
- Identify dormant accounts and transactions thereon
- Re-perform currency conversions
- Provide details of currency exposure
- Test for cut-off
Loans and Mortgages
The following tests are relevant where the accounts are either commercial or personal loans:
Analysis
- Stratify balances and create a summary file
- Analyze balances and interest rates by risk rating
- Analyze interest margin on accounts by type
- Analyze load portfolio by servicing officer, location, loan type, etc,
- Summarize load portfolio information based on data in any field
- Summarize loans by collateral and purpose to analyze portfolio risk
Calculations
- Total accrued interest, balance
- Reprove arrears calculations and reporting
- Check interest and service fee calculations
Exception Tests
- Identify staff loans
- Identify large loans
- Identify loans with unusual interest rates
- Identify balances greater than original advance
- Identify negative balances
- Create custom reports on new, renewed and past due loans
Matching and Comparing
- Using cross-matching techniques can pick up multiple loans to the same address
- Compare balances at different periods to identify movements
