Automation in FCPA Compliance

In the fight against corruption, we have seen a trend of increased enforcement in conjunction with the constant evolution of laws and regulations.  Not surprisingly, last year proved to be a significant and successful year for the Department of Justice (DOJ) and the Securities & Exchange Commission (SEC) regarding enforcement action under the US Foreign Corrupt Practice Act (FCPA).  In 2017, several FCPA penalties reached totals of over $1.92 billion alone—the second largest sum documented.  

Several initiatives led by the DOJ helped contribute to the FCPA’s success over the past year.  Such efforts have included the DOJ’s release of its Evaluation of Corporate Compliance Programs, the increased adoption of the management system standard ISO 37OO1 for technical safeguards, increased foreign cooperation and increased resources.  Anti-Money Laundering (AML) and Know Your Customer (KYC) laws, the Bank Secrecy Act (BSA), and the US Patriot Act are other measures put into place to combat corruption.

Because businesses are directly responsible for whom they do business with, having access to a compliance solution that is adaptable and can incorporate all of these laws and regulations into one, is a key asset.  Furthermore, with ongoing developments, companies are faced with the task of implementing reliable and secure systems to supplement the implementation of robust compliance programs.  Automating due diligence programs and anti-corruption procedures can help companies manage high risk third parties and maintain complete and secure electronic records.

As companies try different measures to optimize their compliance programs, they will continue to be challenged by multiple platforms and systems.  In a survey conducted by The Ethisphere Institute and Convercent, two highly recognized and credible compliance industry organizations, companies were asked how they collected data and how many systems were used.  The results showed that companies generally use several sources of systems to gather data and must log into different systems and obtain the data one by one manually.  This shows the difficulty companies face when retrieving data and converting it into a risk profile for their clients, and the need for new systems with automation in play.  A single compliance software with access to multiple data sources that can also adapt to the needs of a company would be beneficial and essential as regulations and expectations become more complex day by day.

Mistakes resulting in non-compliance or legal violations can not only result in hefty fines, but can also ruin a company’s reputation within the industry.  When one company goes under, this usually results in stricter and harsher regulations that impact the companies left standing.  By automating compliance processes, human error is likely to decrease and efficiency will increase.

However, integrating automation into compliance does have its disadvantages including high costs and the possibility of layoffs due to the replacement of human tasks.  That being said, companies who invest in automation could possibly see a rise in their return on investments (ROI) in the long-run because as efficiency increases so do sales and profits.


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