In this conclusion of a three-part blog post series, we are considering how to create an effective compliance program through the use of data analytics. I am joined in this exploration by Vince Walden, CEO of Kona AI and we are considering the requirements laid out by the Department of Justice (DOJ) in their recent pronouncements on best practices, as well as the key trends and lessons learned from enforcement actions. Finally, we will consider the speech by Kenneth Polite on the changes to the Corporate Enforcement Policy and how to meet those requirements using data analytics. Walden articulated 10 steps you need to follow:

1. Assess a company’s conduct;
2. Self-disclose;
3. Know quickly if there is a problem or not;
4. Have access to relevant sources of data;
5. Conduct monitoring at the beginning and throughout the lifespan of the relationship
6. Have an on-premise application;
7. Look up vendors and transactions quickly;
8. Run data through a library of corruption and fraud tests;
9. Look at a predictive model and see if it meets the profile of an improper payment; and
10. Have visibility into data almost at their fingertips.

The 7th step involves having an on-premise application for data analytics. This is an important step, as it allows companies to keep their data secure, while still being able to use predictive analytics and other compliance monitoring tools. You should consider a platform designed to be hosted and managed as a service, meaning that companies can utilize the platform without having to move large amounts of data around each month.

Under steps 8 & 9, you should run your data through a variety of libraries and test but a key is doing so without compromising their data privacy. Using data analytics to identify anomalous payments that may be indicative of corruption or fraudulent activities. This will help your organization to meet the DOJ’s expectations for an effective compliance program. It helps improve business processes, increase transparency, and reduce the risk of improper payments. Additionally, such a data analytics platform can be used to benchmark an individual company’s compliance program by identifying attributes of an improper payment.

Finally under Step 10, your organization should use a tool which also supports data visualization and dashboards that help companies analyze their compliance data in real time by quickly identifying any irregularities or anomalies that could be indicative of corruption or fraudulent activity. Your system should also provides support for automated reporting, allowing companies to easily generate reports on their compliance program. This can help companies identify areas of improvement, as well as any potential issues that should be addressed. Such visibility can extend up to the Board of Directors level which will enhance your reporting up the organization and facilitate the Board’s requirement for oversight under the Caremark Doctrine.

This approach can be used to facilitate risk assessments, helping companies to ensure that their compliance programs are up to the standards set by the DOJ. Through ongoing monitoring, it can be  used to track activities and progress in compliance over time, providing companies with a better understanding of their compliance processes, ensuring an effective way to demonstrate your compliance program is up to the standards set by the DOJ.

Data driven compliance decisions are essential for companies to meet the expectations of the DOJ This includes having access to relevant sources of data, conducting monitoring at the start and throughout the lifespan of a relationship, having an on-premise application, and self-disclosing any potential violations to the DOJ. A data analytics platform that can help companies meet these expectations, as it will provide advanced analytics and compliance monitoring that allow companies to quickly identify areas of risk and anomalies in their data. Additionally, the platform can be used to collaborate with other companies to gain insights into attributes of an improper payments to prevent fraud or even simple over-payment of vendor invoices.

Perhaps there is no better example of a data driven approach to compliance in meeting the DOJ expectations than in the 2022 ABB, Foreign Corruption Practices Act enforcement action. In it, ABB had notified the DOJ it wanted to meet and had scheduled a meeting but before ABB could come in and self-disclose, the story of ABB corruption in South Africa broke in the local news. However the DOJ credited ABB for detecting the violations and notifying the DOJ it was coming in. This went a long way towards the excellent result ABB was able to achieve in its resolution with the DOJ.

Listen to Vince Walden on Data Driven Compliance

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