Welcome to Episode 10 of Compliance Man Goes Global podcast of FCPA Compliance Report International Edition. In this episode, we will focus on the impact of new technologies and artificial intelligence on Compliance profession. We will explore this matter in a plain language so to say and in the simple game form. Moreover, to make the podcast handy and more appealing we attach respective illustration from the Compliance Man illustrated series, created by Timur Khasanov-Batirov.

For those of our listeners who are not aware about our format, in each podcast, we take two typical concepts or more accurately misconceptions from in-house compliance reality. We check out if these concepts work at emerging jurisdictions. For each podcast, we divide roles with Timur, a practitioner who focuses on embedding compliance programs at high-risk markets. One of us will advocate the concept identifying pros. The second compliance man will provide arguments finding cons and trying to convince the audience that we face a pure myth. As a result, we hopefully will be able to come up with some practical solutions for in-house compliance practitioners.

Tom: OK, Tim, let’s get started.

Myth #1 There is no need for Compliance Officer to learn about new technologies as blockchain or artificial intelligence for instance. Tim, would you agree with this statement?

Tim Khasanov-Batirov:

I disagree with this statement. I believe Compliance practitioners should pay attention to new technologies. Let me give you one example. A new bribing scheme might take place by utilizing, for instance, Initial Coin Offerings (ICO) model. This could be done in a simple manner. One is requested to “invest” money to a specified ICO project. One has to pay in hardly trackable cryptocurrency in exchange of tokens. The thing is that ICO (contrary to IPO) is not regulated in the majority of jurisdictions. Thus, there are no mandatory audit or legal requirements, which are able to validate if the project is sound from financial prospective. Consequently, there is no guarantee or obligation that one can expect the return of his money after investing in something, which technically is not illegal. Imagine that a PEP is an ultimate owner of this ICO project. He could get all financial proceeds from “investments” in cryptocurrency, which in certain jurisdiction even is not subject to declaration. While in the US this mechanism will not work due to so-called “Howey test” in other jurisdictions ICO could be used as an innovative bribing scheme.

What are your views, Tom?

Tom:  I agree with your statement, Tim. I have some more points to focus on as well. As the majority of Compliance practitioners are lawyers we have been witnessing how new technologies as artificial intelligence impacts legal profession. The AI technology replaces in-house lawyers in for instance drafting lawsuits. Why AI can’t draft or analyze your Code of Ethics as well? So, as I have mentioned in my posts Using AI in a Compliance Function a compliance practitioner should have a look at opportunities that new technologies bring. This could be process automation for example. The ways to use new technologies in operationalizing Compliance still to be explored.

Tim: Tom, I fully agree with you. There is a great future for utilization of new technologies in Compliance profession.

Tom: OK, Tim. We can formulate the next concept or maybe misconception in the following way:

Myth #2. New tech cannot influence the effectiveness of the corporate compliance program. Tim, will you agree with this concept?

Tim: I strongly disagree with this concept.

As we have discussed earlier new technologies have an impact on the execution of the Corporate Compliance program. The impact of new technologies on Compliance profession I have depicted in the attached new issue of the Compliance man illustrated. Case management systems, which are utilized as platforms for Whistleblowers’ line along databases for due diligence are something to which we are used to already. Technologies allow us to do our work quicker and more effective. At this stage, in-house Compliance community probably is not involved that deeply in new tech, but I believe it is a question of time. What are your views, Tom?

Tom: I would like to reinstate my philosophy, which is based on the necessity to determine not only additional value but also to assess what would bring the biggest bang for your Compliance buck through the greatest contribution to business success. Compliance person has to consider both short and long-term value, as well as projects that might expand into a broader “suite of cognitive capabilities to create competitive advantages.”


Some of the questions that Compliance practitioner should consider are:

  • How critical to your overall compliance strategy is addressing the targeted issue?
  • How difficult will it be to implement the proposed AI solution?
  • How would the benefits merit the efforts and are there other uses for the AI solution?

Hope our discussion attracted the attention of our listeners among Compliance community to role of new technologies in compliance management. Tom Fox and Tim Khasanov-Batirov were here for you.

Join us for the next episode of Compliance Man Go Global episode of FCPA Compliance Report International Edition. Let’s bust more corporate compliance myths with us.