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> employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by resp
by pcl 4y ago
> employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis
This seems like a totally legit approach to me -- ChatOps for expenses, essentially. The usability of "an on-line 'chat' platform" (presumably Teams / Slack / Discord / equivalent) is much better for the employees than most finance tools, and most chat apps these days should have pretty great auditability capabilities.
(Of course, the rest of this FTX fiasco is a total disaster.)
- exo762 4y agoAFAIK they were using Signal with auto-delete turned on. If true, this is a great way to avoid auditability.
- ninjin 4y agoWell, they are learning from the “best”: politicians [1]. [1]: https://www.theguardian.com/politics/2019/dec/17/tories-switch-to-messaging-app-signal-to-curb-whatsapp-leaks https://www.theguardian.com/politics/2019/dec/17/tories-swit...
- gruez 4y agoThis is actually standard within financial institutions and big corps. It's not implemented as "signal with auto-delete turned on", but rather as retention policies on emails or whatever.
- hermitdev 4y agoExcept the retention on emails, for instance, is usually 7 years. Not exactly the same as auto delete after read... It's an apples to oranges comparison.
- compiler-guy 4y agoAnd the relevant transactions and approvals get recorded in other media for even longer periods in auditable forms. A slack exchange saying, "Hey, would you approve this expense?" "Sure" isn't a problem. It's the lack of formal follow ups in an auditable medium that is.
- thedougd 4y agoWorked for a major US bank. 2 years max on email. You don't want discoverability back 7 years.
- WJW 4y agoThat's not really how auditing works though. If there is a legal requirement to keep records of communications between senior managers (and there is for financial institutions), then "we purposely used an app that deletes such communications to hide our actions from the auditors" is in itself a crime.
- lupire 4y agoThat's just modern double entry bookkeeping - 1 write, then 2 erase. If any transaction isn't erased, it leaves an audit trail for investigation.
- toomuchtodo 4y agoIt is not legit when you are a business of this magnitude in finance. Chatops for TechOps? Totally, no one cares if you’re down, there’s little regulatory impact. Accounting and finance? Not even once. (Caveat around TechOps is IAM privs as it relates to SOX, GLBA, etc) (a component of my work is providing guidance to fintechs on governance and controls with respect to various nation state regulatory frameworks)
- abudabi123 4y agoChatOps for expenses through Apple's iMessage Finance plumbing tool can tighten up on the formal regulatory oversight and grow new profit centers for Warren Buffet, TSMC, G20 business ambitions.
- mc32 4y agoYeah, I'm sure EY will be totally nonplussed and have no further questions. Oh, you used ephemeral messaging for requests and approvals with no audit trail? Totally compliant, ok, now, let's look at dual approvals...
- perardi 4y agoWow, no. I suppose it would be fine if you had a Slack integration that was a front-end to a proper piece of accounting software. But a completely ad-hoc system where accounting and auditors have to grep a giant chat log for an emoji is going to get you sent to some special level of finance hell. Nobody will have any transparency into why a request was approved, who approved it, and why. How do you possibly hand off the history of reimbursements to someone who is hired later, and how do you possibly create a structured report for auditors? And I’ll even object to your supposition that finance software is hard to use. We use Brex for a corporate card, and it’s a totally smooth process, with a great app and website.
- molsongolden 4y agoNot disagreeing here, just adding notes. An example of a Slack integration front-end to proper software: Ramp[0] has a decent Slack integration for in-Slack reimbursement approvals. It's easier than navigating their web app. Also, Brex is pretty polished today but even they started out as a junk show. Stripe started out as total chaos. Many of the neobanks... Most fintech startups out there started as three engineers in a trench coat 1) hustling for traction then 2) scrambling to get a scalable (and auditable, and reconciling...) system in place before user growth crushed them. [0] https://ramp.com/ https://ramp.com/
- perardi 4y agoOh, sure, to be fair, I only just started with Brex. And I am comparing their website to consumer-facing Chase—was just superficially impressed how much nicer Brex’s UI looks, and also feels more performant.
- tiborsaas 4y agoSounds like a dream for employees, I don't care what's under the hood. I have unclaimed business expenses because the reimbursement portal is so shit.
- deleted 4y ago[deleted]
- ralph84 4y agoAgreed. It's certainly possible to build way more robust controls using chatops than email or some internal "enterprise" app. FTX may not have implemented it this way, but one could envision the chatops automatically requiring approvals from the correct people based on dollar amount and expense type. And requiring those people to 2FA with their approval.
- hef19898 4y agoSo, basically building auditable accounting systems in house instead of buying existing solutions? Yeah, but no.
- ralph84 4y agoThere are a lot of fucked up things about FTX, but "omigod they didn't use SAP" isn't one of them.
- hef19898 4y agoAssuming I was talking about SAP when saying accounting systems, for what is basically banking, shows a certain lack in understanding either of those systems.
- ralph84 4y agoMy finance colleagues (Fortune 100 company) who spend all day updating the general ledger in SAP will be interested to learn SAP doesn’t make accounting systems.
- dougmwne 4y agoHo Ho Ho. Nope! That is never going to pass muster with the auditors. You have actual legal responsibilities in corporate accounting, you can’t just make it up as you go along doing whatever seems easiest without ending up in prison.
- jahewson 4y agoNoooope. Slack isn’t providing the kind of financial controls or guarantees necessary. There’s no reporting. Presumably any admin can manipulate or delete messages, etc.
- courgette 4y agoExactly, they would need a immutable, distributed ledger to accounts for their client immutable centralized and vaporized ledgers.
- ska 4y ago> and most chat apps these days should have pretty great auditability capabilities. Most chat apps default configuration isn't going to do this well at all out of the box. With some significant back end work, you can for sure do this. On the other hand you are probably right about it being a pretty good for end user. If you don't do the back end stuff properly, you're going to be in a mess and will not pass any sort of real audit.