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Data Driven Compliance

The Uses of Data Driven Compliance: Part 1 – What’s the Hype?

Welcome to Data Driven Compliance. In this podcast, we discuss how to use data to improve and enhance the effectiveness of your compliance program, creating greater business efficiency, all leading to more return on investment for your compliance regime. Join host Tom Fox as he explores how data will drive your compliance program to the next level. This podcast is sponsored by KonaAI.

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. Over these five podcasts, we will discuss generative AI and ChatGPT in compliance, the profiles of corrupt payments, making the business case for data-driven compliance, what to ask for and how to ask for it, and some success stories. In Part 1, we ask, ‘What’s all the hype around generative AI and ChatGPT in compliance’?

Vince Walden is a seasoned professional in the field of generative AI and chatbots, with a particular focus on compliance monitoring. He firmly believes that these technologies have the potential to improve the efficiency and effectiveness of compliance monitoring significantly. Drawing from her extensive experience in technology-assisted review and his current role at KonaAI, Walden sees practical applications for generative AI in navigating compliance monitoring functions and interacting with data dashboards, eliminating manual intervention. However, he also acknowledges the potential pitfalls of over-reliance on generative AI, such as the risk of false statements and the need for fact-checking. Despite these challenges, Walden remains optimistic about the future of generative AI and chatbots in transforming the compliance industry and explains why you should.

Key Highlights:

  • The Evolution of Compliance Monitoring with Generative AI
  • Efficient Compliance Monitoring with Generative AI
  • The Importance of Fact-Checking ChatGPT
  • Customizable Compliance Monitoring Tool for Companies

Resources:

Connect with Vince Walden on LinkedIn

Check out KonaAI

Connect with Tom Fox on LinkedIn

Categories
Blog

Revolutionizing Compliance Monitoring with Generative AI and Chat GPT

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. KonaAI is the sponsor of those podcasts. This blog post series will flesh out the podcast show notes. Over the next five blog posts, we will discuss generative AI and ChatGPT in compliance, the profiles of corrupt payments, making the business case for data-driven compliance, what to ask for and how to ask for it, and some success stories. In Part 1, we will consider using generative AI and ChatGPT for compliance.

My special guest is Vince Walden, a trailblazer spearheading transformative advancements in the compliance industry through the innovative use of data and data analytics. Vince’s grounding in generative AI and Chat GPT has enabled him to push the boundaries of traditional compliance monitoring. His knack for simplifying complex concepts has won him acclaim at numerous conferences, where he frequently shares his expertise. Vince’s novel strategies are revolutionary and rapidly becoming the new standard in the field.

Together with Walden, we will explore how compliance professionals can enhance their monitoring efficiency through generative AI and Chat GPT. Having worked extensively in the compliance and data arenas, Walden understands the challenges compliance professionals face in navigating the complex regulatory landscape. He shares his expertise and highlights practical use cases of Chat GPT in compliance monitoring, demonstrating how it can streamline the decision-making process. We will provide actionable strategies for improving compliance monitoring and addressing compliance professionals’ pain points.

You have probably heard of Generative AI. What is the hype about it? Generative AI does not just analyze data—it creates or “generates” responses or outputs based on the given data. Something like a brilliant virtual assistant! Walden discussed some of the uses. He mentioned how these AI chatbots can interact directly with a compliance dashboard. This means it is more than simply about reading data—it is about interpreting it and helping make navigating tons of data more accessible. It provides recommendations, insights, and options based on what it’s looking at. This could eliminate the need to click around on your dashboard.

AI is pretty good with data. But what about qualitative information? You might be wondering if you can leave everything entirely to AI. Walden adds a bit of a reality check here by reminding us of the importance of human intervention in checking the AI’s output. There is a downside to relying exclusively on AI’s output. A compliance professional must take results at face value. There is a need for validation and fact-checking to ensure we’re not accidentally spreading misinformation or making decisions based on false statements. It’s like that saying, “Trust but verify.”

One of the key challenges associated with generative AI and chatbots in compliance monitoring is striking the right balance between automation and human oversight. While chatbots can assist in navigating and analyzing data, human judgment and expertise are still crucial in interpreting the results and making informed decisions. Compliance professionals must ensure that the rules and algorithms used by the chatbots are accurate and aligned with regulatory requirements.

Another consideration is data privacy and security. Using generative AI and chatbots within a secure platform that protects sensitive information is essential. Compliance professionals should avoid sending data to third-party providers and ensure privacy regulations are followed.

Despite these challenges, generative AI and chatbots in compliance monitoring are promising. By leveraging these technologies, compliance teams can improve efficiency, reduce costs, and enhance the overall effectiveness of their monitoring processes. The ability to customize review strategies based on different risk thresholds and areas of concern further enhances the value of these tools.

The bottom line is that generative AI and chatbots are set to revolutionize compliance monitoring by providing professionals with more efficient and interactive ways to navigate data and identify potential compliance issues. While there are tradeoffs and challenges to consider, the benefits of these technologies in terms of efficiency and cost-effectiveness are significant. Compliance professionals must exercise caution, fact-check the output of generative AI, and maintain human oversight to ensure accuracy and compliance with regulations. As compliance monitoring continues to evolve, the integration of generative AI and chatbots will undoubtedly play a crucial role in shaping its future.

The steps outlined in the article – leveraging generative AI and Chat GPT for compliance monitoring – are pivotal in helping compliance professionals achieve improved monitoring efficiency. By using generative AI to analyze large volumes of data in real time, compliance professionals can detect anomalies and potential violations more efficiently than ever. Additionally, the automation of compliance checks through Chat GPT significantly reduces the burden of manual reviews and frees up valuable time for proactive monitoring activities. These technological advancements enhance monitoring accuracy and streamline the decision-making process, allowing compliance professionals to make informed and timely decisions. By adopting these innovative tools, compliance professionals can achieve improved compliance monitoring results and ensure organizational adherence to regulations.

 Resources:

Connect with Vince Walden on LinkedIn

Check out KonaAI

Connect with Tom Fox on LinkedIn

Categories
Blog

Geopolitical Risks and Business Opportunities: Part 1- The Middle East 

I recently had the opportunity to visit with Dr. Ian Oxnevad, Director of Geopolitical Risk intelligence at Infortal Worldwide. This visit was for a podcast series, sponsored by Infortal Worldwide entitled Global Risk Review. Dr. Oxnevad is a seasoned expert in geopolitical risk intelligence, with a PhD in political science and a master’s degree in National Security Studies. His expertise, particularly in the Middle East and Africa region, has led him to identify numerous opportunities for US businesses, especially in the high-tech sector and water technology, following the Abraham Accords. Dr. Oxnevad acknowledges the potential risks, such as political tensions, inflationary pressures and threats to the dollar’s dominance. His insights are shaped by his extensive academic background and his role as the Director of Geopolitical Risk Intelligence for Infortal Worldwide.

Over this five-part blog post series we looked at the risk profile for US Companies doing business in the following geographic regions, the Middle East, Latin America, Russia and Ukraine, Africa and the Asia Pacific region. Over this five-part blog post series, we will review Dr. Oxnevad’s views in each one of these regions. We begin in this Part 1 by reviewing the business opportunities and risks in the Middle East.

The Middle East has undergone significant changes in recent years, particularly with the signing of the Abraham Accords in 2020. These accords have opened new opportunities for US businesses in the region, particularly in the United Arab Emirates (UAE) and Israel. However, along with these opportunities come certain risks and challenges that need to be carefully considered.

One of the key areas where US businesses can benefit from the Abraham Accords is in the high-tech sector. Both the UAE and Israel have highly advanced economies and a strong focus on technology. The normalization of relations between these countries has created opportunities for bilateral investments and partnerships. US companies looking to invest in Israel or the Gulf states can now do so with greater ease, as the need to keep economic relations separate has diminished.

Another sector that presents opportunities for US businesses is water technology. The UAE, in particular, heavily invests in Africa, where there is a high demand for water systems. Previously, geopolitical issues may have hindered collaboration between Emirati investors and US companies in providing water technology solutions in Africa. However, with the Abraham Accords, these hurdles have been removed, allowing for greater regional integration and technological cooperation.

While the Abraham Accords have opened up new avenues for US businesses, it is important to consider the potential risks and challenges that come with operating in the Middle East. One such risk is the potential for export sanctions violations, particularly in relation to Iran. US companies operating in Saudi Arabia, for example, need to be aware of the risks associated with conducting business with partners or buyers who may have ties to Iran. Thorough due diligence and risk assessments are crucial in mitigating these risks.

Additionally, the normalization of ties between Saudi Arabia and Iran, facilitated by China’s Belt and Road initiative, has implications for energy costs and potential inflationary pressures. If oil sales start getting denominated in currencies other than the US dollar, it could lead to higher energy costs and inflationary pressures. This could have a significant impact on US businesses operating in the region, as it may affect supply chains and purchasing power.

It is important for US businesses to stay informed about geopolitical developments and the potential impact on business opportunities and risks in the Middle East. Geopolitical risk intelligence and screening of partners and suppliers are essential in navigating the complex landscape of the region.

In conclusion, the Abraham Accords have created new opportunities for US businesses in the Middle East, particularly in the UAE and Israel. The high-tech sector and water technology are key areas where US companies can benefit from increased regional integration. However, it is crucial to consider the risks associated with export sanctions and potential inflationary pressures. Thorough due diligence, risk assessments, and staying informed about geopolitical developments are essential for US businesses looking to capitalize on the opportunities in the Middle East post-Abraham Accords.

I hope you will join us tomorrow when we explore Geopolitical Risks and Business Opportunities in Latin America.

You can check Dr. Oxnevad in the full five-part Riskology by Infortal podcast series here.

Categories
Adventures in Compliance

Adventures in Compliance – Ethical Lessons from The Adventure of The Noble Bachelor

Welcome to a review of all the Sherlock Holmes stories which are collected in the work, “The Adventures of Sherlock Holmes.” The appeared in the Strand Magazine from July 1891 to June 1892. Over 12 episodes, I will be reviewing each story and mine them for leadership, compliance and ethical lessons.  Today I consider some ethical lessons from “The Noble Bachelor” which was initially published in the Strand Magazine in April 1892 and is included in the collection ‘The Adventures of Sherlock Holmes’.

Summary

The story begins when Lord Robert St. Simon, the second highest-ranking nobleman in England, seeks Sherlock Holmes’s help. Lord St. Simon’s new American wife, Hatty Doran, has disappeared shortly after their wedding. The only clues left behind are a wedding dress and a mysterious note.

Holmes sets to work, investigating every angle of the case. Upon interviewing the various parties involved, including Hatty’s former nurse and confidante, he uncovers the truth.

The missing bride, Hatty Doran, had previously been engaged to a man named Frank Moulton in America. They had a misunderstanding, and she had believed Frank to be dead. When she found out that Frank was alive and had been in England all along, she left her wedding to reunite with him.

In the end, Holmes does not interfere with Hatty’s decision, allowing her to leave with Moulton, despite the scandal it would create for Lord St. Simon. The detective explains to St. Simon that Hatty still loved Frank and was forced into the marriage due to a misunderstanding.

Thus, in “The Noble Bachelor,” Holmes uncovers a mystery of love and misunderstanding, ensuring the rightful parties are united while upholding his principles of justice and truth.

Ethical Lessons

1.     Honesty and Transparency: One of the main lessons revolves around the importance of honesty and transparency, especially in relationships. Lord Robert St. Simon and Hatty Doran, who are in the center of the story, show that lack of communication and honesty can lead to misunderstandings and complications.

2.     Compassion and Empathy: Sherlock Holmes, in his investigation, shows understanding towards Hatty Doran’s difficult situation, highlighting the importance of compassion and empathy. Even when she runs away from her marriage, Holmes doesn’t rush to judgment but rather attempts to understand her motives.

3.     Respecting Individual Choices: Hatty Doran decides to return to her former fiancé, who she believed was dead, thus asserting her personal choice. It teaches the lesson of respecting individual choices, even when they go against societal norms or expectations.

4.     Materialism vs True Love: Lord St. Simon, the noble bachelor, is portrayed as quite materialistic and is primarily concerned with his status. In contrast, Hatty Doran and her former fiancé, Francis Hay Moulton, display a genuine and profound love for each other. This contrast raises ethical questions about the nature of love, happiness, and material wealth.

5.     Justice and Fairness: Despite the societal standards of the time, Holmes does not seek to punish Hatty Doran for breaking her marital vow. He does not judge her actions, respecting her circumstances and choices. This underscores the importance of justice that is compassionate, understanding, and fair.

Resource

The New Annotated Sherlock Holmes

Categories
Corruption, Crime and Compliance

Corruption, Crime, and Compliance: Justice, Commerce and Treasury Departments Issue Comprehensive Tri-Party Voluntary Disclosure Guidelines for Sanctions and Export Control Violations

Companies must take a proactive approach to sanctions and export control compliance to mitigate potential risks. This includes implementing rigorous compliance programs, cooperating with the DOJ, and promptly disclosing and remedying violations. In this episode of Corruption, Crime and Compliance, Michael Volkov explores the latest joint compliance notice issued by the DOJ, Department of Commerce, and Department of the Treasury. This notice provides crucial guidelines on voluntary disclosure for sanctions and export control violations, shedding light on the increasing enforcement of such controls. He discusses the intricate relationship between sanctions enforcement and the FCPA and offers a keen understanding of how businesses can safeguard their interests and comply with global standards.

You’ll hear Michael talk about:

  • The landscape of sanctions enforcement is rapidly evolving, with the Department of Justice (DOJ) and the National Security Division designating 25 prosecutors to handle sanctions compliance violations. 
  • Corporate resolutions are becoming the driving force behind settlement processes, and these resolutions could become significant revenue streams for the DOJ. In light of these developments, companies must prioritize sanctions and export control compliance to mitigate potential risks.
  • The DOJ’s Joint Criminal Enterprise (JCE) Guidance provides a detailed guideline for voluntary disclosures of possible violations. The JCE Guidance emphasizes the importance of prompt disclosure and swift remediation after uncovering potential violations. 
  • Generally, the DOJ will not seek prosecution if a company fully discloses a violation, cooperates wholeheartedly, and takes remedial actions. However, this is not a blanket assurance; aggravating factors such as widespread criminal activity or attempts by upper management to conceal violations can influence this stance.
  • Voluntary self-disclosure is not merely a bureaucratic step; it can potentially be a shield, allowing companies to significantly reduce or even bypass criminal liability. 
  • Full cooperation entails timely preservation of pertinent documents, streamlined witness interviews, and proactive identification of avenues for in-depth DOJ investigation.
  • Implementation of rigorous compliance programs, complemented by suitable disciplinary actions, can tilt the scales in favor of companies during evaluations. 
  • The JCE Guidance underscores recent modifications to the disclosure and enforcement policies adopted by the Bureau of Industry and Security (BIS) and the Office of Foreign Assets Control (OFAC). Notably, the BIS has ramped up penalties for companies that remain tight-lipped about significant potential violations. 
  • The efficacy of a compliance program, particularly its prowess in identifying and rectifying compliance gaps, plays a monumental role in BIS case resolutions.

 

KEY QUOTES

“Companies are about to face aggressive, coordinated prosecutions for sanctions and export control violations.” – Michael Volkov

 

“[The] DOJ noted that a prompt, voluntary self disclosure provides a means for a company to reduce, and in some cases, avoid altogether, the potential for criminal liability moving forward, where a company voluntarily self discloses potentially criminal violations, fully cooperates, and timely and appropriately remediates the violations.” – Michael Volkov

 

“The existence, nature, and adequacy of a company’s compliance program, including its success at self identifying and rectifying compliance gaps, is itself considered a factor under settlement guidelines.” – Michael Volkov

 

Resources:

Michael Volkov on LinkedIn | Twitter

The Volkov Law Group

Departments of Justice, Commerce and Treasury Issue Joint Compliance Note on Voluntary Self-Disclosure of Potential Violations

Categories
FCPA Compliance Report

FCPA Compliance Report – Dottie Schindlinger on Corporate Governance and the Diligent Institute

Welcome to the award-winning FCPA Compliance Report, the longest-running podcast in compliance. In this episode, Tom Fox welcomes Dottie Schindlinger, Executive Director of the Diligent Institute.

The Diligent Institute, the governance research arm of Diligent Corporation, is on a mission to promote governance excellence by providing valuable resources and support to board members and senior leaders. Through research, thought leadership, podcasts, web shows, and certification programs, the institute addresses topics such as climate leadership, ESG, cyber risk, strategy, and AI ethics. Programs like the Next Gen Board Leaders Program and Director Network software facilitate peer-to-peer networking and board opportunities.

The Diligent Academy offers e-learning certification programs for directors, while the Diligent Forum provides a platform for directors to discuss specific themes with guest speakers. The conversation emphasizes the importance of empowering board members with the right information and insights to make informed decisions. It also discusses the changing role of directors in today’s business landscape, with a focus on digital transformation, cybersecurity, and customer satisfaction. The Diligent Institute aims to be a trusted resource for directors, providing valuable knowledge and understanding of their needs.

Key Highlights

  • Diligent Institute: Empowering Board Leaders
  • Diligent Academy and Forum
  • ESG Momentum
  • ESG Views and Director Confidence
  • The Changing Role of Directors

 Resources

Dottie Schindlinger on LinkedIn

The Diligent Institute

Tom Fox

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YouTube

Twitter

LinkedIn

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Sunday Book Review

Sunday Book Review: September 10, 2023 – The Business Books for September Edition

In the Sunday Book Review, I consider books that would interest the compliance professional, the business executive or anyone who might be curious. It could be books about business, compliance, history, leadership, current events or anything else that might interest me. In today’s edition of the Sunday Book Review, I continue my summer exploration of books on crime. Today, look at some of the top books on auditing, both for the audit professional and the compliance professional.

Resource

FT Business Books-What to Read This Month

Categories
10 For 10

10 For 10: Top Compliance Stories For the Week Ending September 9, 2023

Welcome to 10 For 10, the podcast which brings you the week’s Top 10 compliance stories in one podcast each week. Tom Fox, the Voice of Compliance brings to you, the compliance professional, the compliance stories you need to be aware of to end your busy week. Sit back, and in 10 minutes hear about the stories every compliance professional should be aware of from the prior week. Every Saturday, 10 For 10 highlights the most important news, insights, and analysis for the compliance professional, all curated by the Voice of Compliance, Tom Fox. Get your weekly filling of compliance stories with 10 for 10, a podcast produced by the Compliance Podcast Network.

·       Insufficient cyber plan = FCA violation.  (DOJ Press Release)

·       Roger Ng banned for life.  (YaHooFinance)

·       FASB adopts crypto accounting rules. (WSJ)

·       Ken Paxton and slow creep of corruption. (Texas Tribune)

·       Spanish Women’s National team coach fired.  (ESPN)

·       Ramaswamy’s claims of FDA corruption disavowed by company he founded. (Reuters)

·       FIFA suspends head of Spanish football. (FT)

·       Using AI to improve workplace safety. (WSJ)

·       DOJ to go after Oligarch’s facilitators. (WSJ)

You can check out the Daily Compliance News for four curated compliance and ethics related stories each day, here.

Connect with Tom 

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Report from IMPACT 2023

Report from IMPACT 2023: Larry Thompson on the Evolution of Compliance

ECI’s IMPACT 2023 was one of the leading compliance events in 2023. At this conference, Tom Fox, the Voice of Compliance, was able to visit with several of the speakers, exhibitors, participants, and one group of ethically-minded Girl Scout Troop. In this limited podcast series, Report from IMPACT 2023, Tom explores many of the most cutting-edge topics in ethics and compliance through short podcast episodes. Check out the full series of interviews. You will be enlightened and informed and come away with a fuller and more thorough understanding of the most cutting-edge topics in ethics and compliance. In this episode, Tom visits with Larry Thompson, former Deputy Attorney General and well-known compliance professional. Join Tom and Larry as they delve deeper into these topics on this episode of the Report from Impact 2023.

Larry Thompson is a seasoned professional in the field of compliance, with a career that spans several decades, starting as a young lawyer working with defense contractors in the late 1980s. Thompson’s unique insights on the evolution of compliance programs and ethical culture stem from his firsthand experience of the shift from a rules-based, legalistic approach to a values-based approach. He emphasizes the importance of companies having a common set of values that employees can embody and reflect in their actions, contributing to their long-term sustainability. Thompson also acknowledges the changing values and expectations of the new generation of employees, who prioritize working for companies that align with their own values and have a culture of integrity and purpose. These insights were shaped by his involvement in the establishment of the organizational Sentencing Guidelines in the early 1990s and his roles as a board member of various public companies and an active participant in the National Association of Corporate Directors.

 Highlights Include 

·      The evolution of compliance programs

·      The role of the DOJ in compliance

·      A new generation in the workforce

 Resources 

Larry Thompson

Categories
Daily Compliance News

Daily Compliance News: September 8, 2023 – The Slow Creep of Corruption Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance brings to you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All, from the Compliance Podcast Network. Each day we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.