Building an audit trail your auditors will actually read
An audit trail is only useful if it answers questions quickly. What to record, how to record it, and why it should be written as the work happens rather than reconstructed afterwards.
Most lenders have an audit trail of some kind. Fewer have one that answers an auditor's question in a minute rather than a week. The difference is rarely the volume of data. It is whether the trail was written as the work happened, against the loan it belongs to.
Record the action, the person and the time
Each entry should say what happened, who did it and when. "KYC check passed, Kate Irving, 13:15" is more useful than a status field that silently changed from one value to another.
Keep it on the loan
An audit trail split across email, shared drives and a spreadsheet has to be reassembled before anyone can read it. When every action is written to the loan record, the history of a loan is simply the loan's own log.
Do not edit history
Corrections should be new entries, not changes to old ones. An auditor needs to see that something was wrong and then put right, not a record that appears to have always been correct.
- Who changed a loan's terms, and when.
- Which KYC and AML checks ran, and their outcome.
- When documents were requested, received and approved.
- Who changed user roles and permissions.