On The Contrary: Collaboration vs. Independence
Audit Independence is Overemphasized. Why Collaboration Matters More in Fintech
Few Audit industry principles are as sacred as independence. Every standard and regulatory guide emphasizes that auditors must stay objective and independent from the activities they audit.
Of course, this principle exists for a reason. Auditors should never design or operate the very controls they’re meant to test. But here’s the problem. In the very fast paced fintech world, overemphasizing independence actually reduces the value of the audit function.
The Problem With Excessive Independence
Modern fintechs move quickly. New products launch in weeks. Technology architectures change quickly. Regulatory expectations shift constantly. If auditors keep themselves at arm’s length, hiding behind the principle of independence, they risk becoming:
Out of touch with the business
Late to new and emerging risks
Viewed as irrelevant by management
Viewed as a cost hindrance to management
Viewed as a regulatory risk
Instead, fintechs need auditors who act as engaged trusted advisors. They need professionals who are plugged into the business, who help spot and manage risks proactively, and who ensure that the right balance of sustainable controls are implemented and tested effectively.
Independence shouldn’t mean isolation. It should mean maintaining objectivity even while working closely with the business.
How to Collaborate Without Losing Independence
Here are seven practical ways IT audit teams can collaborate more effectively without compromising their objectivity:
1. Embed Audit Early in Projects
Instead of waiting to audit after a new system or product launches, auditors should participate in project discussions from the beginning. The goal is not to approve designs but to ask important questions like:
Have you considered the risks?
Have you developed the control requirements and solutions that will mitigate those risks?
Will this meet regulatory expectations?
Are there simpler ways to achieve compliance?
Auditors should be sharing views about the types of controls that need to be considered in the solution. Put ideas on the table, but maintain independence by allowing the business to make the design decisions. The goal is to communicate ideas about what good controls may look like. This prevents costly rework and helps address risks upfront.
2. Replace Formal Memos With Collaborative Conversations
Instead of sending audit findings as long reports, hold workshops or meetings to:
Discuss risks in simple language
Brainstorm practical controls
Align on remediation timelines
This builds trust and helps ensure that audit recommendations are actually implemented.
3. Develop Deep Subject-Matter Knowledge
Independence doesn’t mean staying distant. The more auditors understand the technology and business environment, from APIs to payment systems to fintech-specific regulations, the more credible and valuable their advice becomes. IT audit teams must develop strong subject matter expertise about the business, and the technology systems and processes.
4. Be Transparent About the Auditor’s Role
Sometimes management fears that involving audit early will result in delays or additional scrutiny. Auditors should communicate clearly:
We’re not here to block your ideas.
We’re here to help you succeed safely.
Early discussions protect the business from surprises later.
We can provide ideas and fast feedback to help avoid audit issues or worse, regulatory issues later.
5. Prioritize Based on Real Risk
Not every small issue deserves the same level of attention. Collaborative auditors help fintechs focus resources on the most important risks rather than getting bogged down in low-impact findings. It doesn’t mean we ignore lower risk issues. But sometimes it’s better to just communicate those recommendations more informally, and leave the reporting, findings, and issue tracking to the things that really matter.
6. Share Industry Insights
Auditors often have a broad view across multiple fintechs, regulatory trends, and emerging threats. Sharing that knowledge regularly with management helps position audit as a valuable business partner, not just a compliance function. Use your regular catchups to share this useful knowledge, and what it may mean for the firm.
7. Build Relationships
People listen to those they trust. Take time to:
Build informal relationships
Understand business goals, and the individual / team goals of your stakeholders
Participate in discussions beyond just audits
When relationships are strong, teams proactively reach out to audit for advice before problems arise.
A New Model for Fintech Auditors
In fast-moving fintech environments, the highest value audit can bring comes from proximity, not distance.
Done right, collaborative auditing helps:
Identify the right risks
Develop practical controls
Ensure those controls are implemented and tested
Maintain objectivity and integrity
Independence doesn’t mean staying separate from the business. It means keeping your professional judgment intact, even while working closely with the people you audit.
In fintech, isolation isn’t independence. It’s irrelevance. Get out there, get your ideas on the table, all with the goal of reducing risk, improving the control environment, and adding value to your business.