Maker-checker: the simplest control a financial institution can add.

In a maker-checker process, one person prepares a transaction (the maker) and a different person reviews and approves it (the checker) before it takes effect. It is sometimes called the four-eyes principle. It is one of the oldest controls in finance, and still one of the most effective.

Why it works

Maker-checker protects against two different risks at once:

• Honest mistakes. A misplaced zero, the wrong member account, a duplicated payment. A second person looking at the transaction with fresh eyes catches many of them before they reach the ledger.
• Fraud. When no single person can both create and approve a withdrawal, a write-off or a cash transfer, misusing funds requires collusion, which is much harder to arrange and to hide.

It also protects staff. When something goes wrong, a clear record of who prepared and who approved each action makes it far easier to establish what happened.

The rule that matters most

The control only works if nobody can approve their own request. That sounds obvious, but in manual processes it is often broken quietly: the same manager signs both forms on a busy day, or approvals are done by whoever has the password. A system should enforce the rule, not rely on people remembering it.

Apply it where risk is highest

Requiring two people for everything slows an institution down and trains staff to approve without looking. Focus on actions where an error or abuse would be costly or hard to reverse, for example:

• Withdrawals above a set amount
• Loan approvals, interest waivers and write-offs
• Cash transfers between vaults, tills, banks and branches
• Till shortages and overages at day-end
• Changes to products, fees, approval limits and user permissions
• Investment placements, redemptions and asset disposals

Make the record permanent

Approvals are only useful as evidence if the history can’t be edited afterwards. Pair maker-checker with an append-only audit trail that records who did what and when, including rejected requests and the reasons given.

In the Kainetgen Core Banking System

In the Kainetgen Core Banking System, maker-checker can be switched on per action under Approval Rules. The system prevents anyone from approving their own request, approvals appear in a single queue, and every action is written to an append-only audit trail.

Request a demo to see it with fictional data.