Tag: AI

Over a couple of blog posts, I am exploring topics raised in a recent Harvard Business Review (HBR) article, entitled “How to Design an AI Marketing Strategy: What the technology can do today—and what’s next”, by Thomas H. Davenport, Abhijit Guha, and Dhruv Grewal where the authors focus on the use of Artificial Intelligence (AI) in marketing. I believe their work could be adapted for the compliance professional. Yesterday, I used the article as a jumping off point about how Chief Compliance Officers (CCOs) and compliance professionals can use AI for internal compliance communications and communications with key stakeholders outside your organization that you need to work with on compliance, such as third-party agents and vendors in the Supply Chain. Today I want to consider the framework that a compliance professional can implement to use these tools effectively for both internal and external marketing of a corporate compliance program.
The authors posit that AI can be categorized according to two dimensions: intelligence level and stand-alone or integrated platforms. Further, the intelligence level can be broken down into two subgroups: task automation and machine learning. Task automation performs “repetitive, structured tasks that require relatively low levels of intelligence.” They bring a level of ease as they are “designed to follow a set of rules or execute a predetermined sequence of operations based on a given input” However, such tools cannot handle complex problems such as nuanced employee requests for information. Chatbots fall into this category.  Such tools can provide basic assistance to employees during basic interactions, moving employees down a defined decision tree, but cannot ascertain intent, offer customized responses, or learn from interactions over time.
With machine learning, “algorithms are trained using large quantities of data to make relatively complex predictions and decisions.” Such algorithms can decipher text, segment issues, and anticipate how employees will respond to various initiatives. Moreover, machine learning can drive programmatic decision-making in a compliance program for employees through a “customer relationship management system”. The next step is what the authors term the “more sophisticated variant, deep learning, are the hottest technologies in AI and are rapidly becoming powerful tools in marketing.” That said, it’s important to clarify that existing machine-learning applications still just perform narrow tasks and need to be trained using voluminous amounts of data.
Stand-alone applications are “best understood as clearly demarcated, or isolated, AI programs.” Conversely, integrated applications are embedded within existing systems and such AI applications are often less visible than stand-alone ones. This allows employees to be delivered a more sophisticated solution for the Quote To Cash (QTC) or Procure To Pay (P2P) processes. With a stand-alone system, employees need to go to a dedicated app and request suggestions. It appears that compliance professionals will “see the greatest value by pursuing integrated machine-learning applications, though simple rule-based and task-automation systems can enhance highly structured processes and offer reasonable potential” for not simply more efficient compliance processes but for commercial returns.
For corporate compliance professionals with limited AI experience, perhaps the “way to begin is by building or buying simple rule-based applications.” You can start with “crawl-walk-run” approach. Once a compliance function acquires basic AI skills and an abundance of data, you can start moving from task automation to machine learning. Moreover, new sources of data, “such as internal transactions, outside suppliers, and even potential acquisitions”, are something compliance functions should have access to, since most AI applications, particularly machine learning, require vast amounts of high-quality data. Once again this is precisely what the Department of Justice (DOJ) specified in the 2020 Update to the Evaluation of Corporate Compliance Programs when it mandated that compliance have access to all corporate data even when siloed.
There are challenges in implementing an AI tool for communications as “implementing even the simplest AI applications can present difficulties. Stand-alone task-automation AI, despite its lower technical sophistication, can still be hard to configure for specific workflows and requires companies to acquire suitable AI skills.” It will also require “careful integration of human and machine tasks so that the AI augments people’s skills and isn’t deployed in ways that create problems.” The bottom line is that while AI holds enormous promise, for compliance professionals for a variety of uses, it still accomplishes only narrow tasks.
But it will be a journey for compliance. The compliance function “and the organizations that support it, IT in particular, will need to pay long-term attention to building AI capabilities and addressing any potential risks.” Yet compliance professionals cans start developing a strategy today to take advantage of AI’s current functionality and its likely future. Compliance communications to both internal and external stakeholders is certainly one use that should be on your horizon. When we receive the next iteration of the Evaluation of Corporate Compliance programs you may well see AI specifically called out as a tool, the DOJ may expect multi-national companies to have AI in place and be using for a variety of compliance activities.

Many Chief Compliance Officers (CCOs) are still challenged by the concept of internal marketing for a compliance program. Indeed folks like Ronnie Feldman, founder of L&E Creative, and Ricardo Pellafone, founder of Broadcat, are on a mission to move the compliance profession away from rote, boring and frankly useless training and communications tools. I was therefore intrigued by a Harvard Business Review (HBR) article, entitled “How to Design an AI Marketing Strategy: What the technology can do today—and what’s next”, by Thomas H. Davenport, Abhijit Guha, and Dhruv Grewal where the authors focus on the use of Artificial Intelligence (AI) in marketing. I was interested in how their work could be adapted for the compliance professional. Over the next couple of blog posts, I will be using this article as a jumping off point about how CCOs and compliance professionals can use AI for internal compliance communications and communications with key stakeholders outside your organization that you need to work with on compliance, such as third-party agents and vendors in the Supply Chain.
The authors posit that in order to realize AI’s giant potential, marketers (or CCOs) need to have a good grasp of the various kinds of applications available and how they may evolve. They categorize AI along two dimensions: the first is the intelligence level and whether it stands alone or is part of a broader platform. Simple stand-alone task-automation apps are a good place to start. The second is the advanced level, which integrates applications that incorporate machine learning and have the greatest potential to create value.
Compliance marketing has a huge amount to gain from the use of AI. This is because a marketer’s core activities are to understand customer needs, matching them to products and services, and persuading people to utilize those products or services. These are all capabilities that AI can dramatically enhance. The only difference for the compliance professional is that your customers are your employees and third parties to your organization that need compliance communications.
The authors note that AI has made inroads in marketing, and they well expect it to take on larger and larger roles across the function in the coming years. With the enormous potential of AI, it is important for all compliance professionals to understand the types of marketing AI applications available today and how they may evolve. One of the key changes for compliance coming out of the Covid-19 pandemic has been the use of data. This same use of data can be applied to internal and stakeholder communications for your compliance program through AI strategies such as Robotic Process Automation (RPA).
Many corporate compliance functions now use AI to handle narrow tasks, assist with broad tasks, like enhancing the accuracy of predictions, and augment human efforts in structured tasks, such as customer service from the compliance function. There are multiple examples of current uses of AI by compliance. Some of these include:

• Chatbots for employee support,
• Inbound call analysis and routing, and employee comments and email analysis, classification, and response,
• Marketing campaign automation,
• Social-media planning and execution,
• Social-media sentiment analysis,
• Web analytics narrative generation,
• Website operation and optimization.

However, you can use AI in marketing for a wider variety of the employee lifecycle. When potential employees are in the pre-hire “consideration” phase and researching your organization, AI can help guide their search and this task. After hiring, AI-enabled bots can help compliance professionals understand employees’ compliance needs, increase their compliance engagement in a search, nudge them in a desired direction, and if needed, connect them to a compliance professional by chat, phone, video, or even “cobrowsing”—allowing a compliance professional to help an employee navigate a shared screen. Does that sound like marketing? You bet it does and that is why every CCO and compliance professional needs to learn to think like a marketer.
AI can streamline the compliance process by using extremely detailed data on employees, including real-time geolocation data, job duties, sales information from platforms, such as Salesforce, and other information to create highly personalized compliance offerings. But this is not a one-time communication. As an employee moves through the sales cycle with a customer, AI can reduce the likelihood that the employee will abandon their compliance focus by not simply reading updated communications. AI can synthesize additional information as an employee moves through the sales lifecycle (i.e., Quote To Cash) or on the vendor side of things (i.e., Procure To Pay).
After the sales cycle is concluded or after a new third-party sales agent is contracted, AI-enabled agents can be available 24/7 to triage employees’ requests—and are able to deal with fluctuating volumes of service requests and inquiries. They can handle simple queries can escalate more-complex issues to a compliance professional. In some cases, AI assists compliance professional by analyzing employees’ tone and suggesting differential responses, coaching compliance professionals about how best to satisfy employees’ needs or suggesting intervention.
If all of this sounds like a brave new world of compliance; it is. But that world is here now, and it is in marketing. These new concepts for compliance demonstrate the speed at which compliance is evolving and how data collection (continuous monitoring) and its use (continuous improvement) is required. Now does that sound familiar? Of course it does, as that is precisely what the Department of Justice (DOJ) set forth in the 2020 Update to the Evaluation of Corporate Compliance Programs.
Join us on Wednesday where I look at the authors’ framework for implementing the use of AI in compliance marketing.