As the Compliance Evangelist, one of the most exciting things about practicing in the compliance space is the continual innovation I have seen since 2007. All parties to compliance, the regulators, corporations, services providers and vendors, continually innovate. Everyone has a role in this innovation process. Compliance itself has moved from a largely paper program, written by lawyers, to a dynamic program which no longer is reactive in a detection mode but has moved from preventative to prescriptive to a business process which helps companies run more efficiently and at the end of the day, more profitably. Today, I strive to enhance this process by premiering a new podcast Innovation in Compliance.
Let’s begin by considering the starting point, which is an innovation strategy. In the some of the most recent Deferred Prosecution Agreements (DPAs) and Non-Prosecution Agreements (NPAs) issued by the Department of Justice (DOJ) they all include an element along the following strictures:
The Company will conduct periodic reviews and testing of its anti-corruption compliance code, policies, and procedures designed to evaluate and improve their effectiveness in preventing and detecting violations of anti-corruption laws and the Company’s anti-corruption code, policies, and procedures, taking into account relevant developments in the field and evolving international and industry standards.
This means that the DOJ expects innovation in your compliance program to keep up with evolving international and industry standards. This requires you to implement an innovation strategy.
All of this means you should begin with an innovation strategy for your compliance program. While many in the compliance profession find innovation to be a continual frustrating pursuit; for a compliance professional to remain relevant, they must be able to lay out an innovation strategy for compliance that details the efforts that will support the overall business strategy. This means creating an innovation strategy that will create value for customers of compliance (i.e., employees), third parties, and the customer; show how the company will capture that compliance value going forward; and finally, which types of compliance innovation to pursue.
Today I am extremely pleased to announce the premier of a new podcast Innovation in Compliance. This new podcast series will be dedicated to exploring the multiple ways in which all participants in the compliance space can innovate. This is the podcast that will help you to meet the challenge of how to and what to innovative with in your compliance program.
In my premier episode, I visit with Vince Walden, a partner at Ernst & Young (EY), who detailed how he and his EY Fraud Investigation & Dispute Services (FIDS) colleagues worked in conjunction with the General Electric (GE) compliance function to improve compliance by using forensic data analytics to provide behavioral insights to their compliance program to create what they called “the profit and loss of one”. They did this through the innovative use of “digital twins” typically considered a manufacturing idea which EY and GE turned into digital replicas compliance risks.
In subsequent episodes, I will visit with Ben Locwin on the innovative uses of big data and small data in a compliance program; David McLaughlin on the use of Artificial Intelligence (AI) to facilitate a compliance program; James Gellert on innovative business solutions for third-party risk management and Jonathan Marks on the innovation of the fraud pentagon, which has helped evolve fraud detection and prevention from the fraud triangle.
If you have a good innovation strategy for your compliance program, it can promote alignment among diverse groups in a company, help to clarify objectives and priorities and guide your focus on those objectives. It can also be modified as necessary and with sufficient feedback.
There are several questions you need to consider in connecting innovation to strategy which we will explore throughout this podcast series; including such issues as: how will innovation create value for the customers of compliance; i.e. your employees and relevant third parties? How can innovation make compliance faster, easier, quicker, nimbler? What is the value of such a creation going forward? Focus on that creation of value going forward. Finally, how can the compliance function capture a share of the value its innovations generate? Obviously senior management has a key role around innovation in compliance, as innovation can be driven downward or backward if there is not sufficient management support so we consider questions around senior management and Board of Directors role in innovation.
As the founder of the only podcast network in this realm, the Compliance Podcast Network, I am continually striving to bring the best, most informative and most useful information to the compliance practitioner and the compliance profession. I am very excited to premier this new podcast series Innovation in Compliance for the compliance community. I know it will lead to many discussions of where the compliance profession is going and how we may get there. I will also have extra items available for all subscribers in the form of white papers and other deliverables which you can use going forward in your compliance practice.
Check out one of the new top podcasts in compliance: Innovation in Compliance. On the 1st episode, Vince Walden from EY.Click to tweet
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© Thomas R. Fox, 2018