The requirements for ensuring regulatory compliance are growing more complex in today’s globalized world. The use of data in business is increasing exponentially, and cyberattacks are on the rise, leading to stricter regulations and penalties for financial crimes like corruption and fraud.
Data usage is increasing due to both regulation and storage capacity, with structured and unstructured data becoming more prevalent. Companies that fail to prevent irregularities risk financial loss, damage to reputation, fines, and more, particularly on the international stage.
Companies operating across international markets must invest in preventative measures, such as data analytics, system alerts, and compliance programs. These tools can help identify and prevent incidents of corruption or fraud.
To tackle corruption and fraud effectively, companies should take actionable steps:
1. Establish Trust: Create an environment of trust within the organization. Compliance should be part of the company’s DNA, with sincere commitment from the top and middle management.
2. Continuous Training: Provide ongoing training on policies, procedures, codes of conduct, ethics, and whistleblowing. Ensure that employees understand and can comfortably raise concerns.
3. Third-Party Due Diligence: Vet external parties in the value and supply chain, such as agents, distributors, and suppliers. Utilize platforms and systems for background checks and red flag identification.
4. Risk Assessments: Understand the company’s risk profile, and conduct regular risk assessments. Internal controls should reflect the assessment’s findings.
5. Integrated Systems: Avoid operating in silos and ensure integrated systems and functions to prevent incidents from going unnoticed.
6. Remote Working Challenges: Address challenges introduced by remote working, including social engineering attempts and disconnectedness between employees and management.
7. Thorough Investigations: Investigate allegations or charges of corruption or fraud thoroughly and implement remedial actions based on findings to prevent recurrences.
Preventative measures are essential to maintain compliance, prevent financial crimes, and protect a company’s reputation. Compliance programs should be tailored, risk-based, and adapted to each company’s unique needs to meet international best practices.