Tag: Vince Walden

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Using Data Analytics to Create an Effective Compliance Program-Part 3

In this conclusion of a three-part blog post series, we are considering how to create an effective compliance program through the use of data analytics. I am joined in this exploration by Vince Walden, CEO of Kona AI and we are considering the requirements laid out by the Department of Justice (DOJ) in their recent pronouncements on best practices, as well as the key trends and lessons learned from enforcement actions. Finally, we will consider the speech by Kenneth Polite on the changes to the Corporate Enforcement Policy and how to meet those requirements using data analytics. Walden articulated 10 steps you need to follow:

  1. Assess a company’s conduct;
  2. Self-disclose;
  3. Know quickly if there is a problem or not;
  4. Have access to relevant sources of data;
  5. Conduct monitoring at the beginning and throughout the lifespan of the relationship
  6. Have an on-premise application;
  7. Look up vendors and transactions quickly;
  8. Run data through a library of corruption and fraud tests;
  9. Look at a predictive model and see if it meets the profile of an improper payment; and
  10. Have visibility into data almost at their fingertips.

The 7th step involves having an on-premise application for data analytics. This is an important step, as it allows companies to keep their data secure, while still being able to use predictive analytics and other compliance monitoring tools. You should consider a platform designed to be hosted and managed as a service, meaning that companies can utilize the platform without having to move large amounts of data around each month.

Under steps 8 & 9, you should run your data through a variety of libraries and test but a key is doing so without compromising their data privacy. Using data analytics to identify anomalous payments that may be indicative of corruption or fraudulent activities. This will help your organization to meet the DOJ’s expectations for an effective compliance program. It helps improve business processes, increase transparency, and reduce the risk of improper payments. Additionally, such a data analytics platform can be used to benchmark an individual company’s compliance program by identifying attributes of an improper payment.

Finally under Step 10, your organization should use a tool which also supports data visualization and dashboards that help companies analyze their compliance data in real time by quickly identifying any irregularities or anomalies that could be indicative of corruption or fraudulent activity. Your system should also provides support for automated reporting, allowing companies to easily generate reports on their compliance program. This can help companies identify areas of improvement, as well as any potential issues that should be addressed. Such visibility can extend up to the Board of Directors level which will enhance your reporting up the organization and facilitate the Board’s requirement for oversight under the Caremark Doctrine.

This approach can be used to facilitate risk assessments, helping companies to ensure that their compliance programs are up to the standards set by the DOJ. Through ongoing monitoring, it can be  used to track activities and progress in compliance over time, providing companies with a better understanding of their compliance processes, ensuring an effective way to demonstrate your compliance program is up to the standards set by the DOJ.

Data driven compliance decisions are essential for companies to meet the expectations of the DOJ This includes having access to relevant sources of data, conducting monitoring at the start and throughout the lifespan of a relationship, having an on-premise application, and self-disclosing any potential violations to the DOJ. A data analytics platform that can help companies meet these expectations, as it will provide advanced analytics and compliance monitoring that allow companies to quickly identify areas of risk and anomalies in their data. Additionally, the platform can be used to collaborate with other companies to gain insights into attributes of an improper payments to prevent fraud or even simple over-payment of vendor invoices.

Perhaps there is no better example of a data driven approach to compliance in meeting the DOJ expectations than in the 2022 ABB, Foreign Corruption Practices Act enforcement action. In it, ABB had notified the DOJ it wanted to meet and had scheduled a meeting but before ABB could come in and self-disclose, the story of ABB corruption in South Africa broke in the local news. However the DOJ credited ABB for detecting the violations and notifying the DOJ it was coming in. This went a long way towards the excellent result ABB was able to achieve in its resolution with the DOJ.

Listen to Vince Walden on Data Driven Compliance

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Blog

Using Data Analytics to Create an Effective Compliance Program-Part 2

In this three-part blog post series, we are ruminating on how to create an effective compliance program through  the use of data analytics. I am joined in this exploration by Vince Walden, CEO of Kona AI and we are considering the requirements laid out by the Department of Justice (DOJ) in their recent pronouncements on best practices, as well as the key trends and lessons learned from enforcement actions. Finally, we will consider the speech by Kenneth Polite on the changes to the Corporate Enforcement Policy and how to meet those requirements using data analytics. Walden articulated 10 steps you need to follow:

  1. Assess a company’s conduct;
  2. Self-disclose;
  3. Know quickly if there is a problem or not;
  4. Have access to relevant sources of data;
  5. Conduct monitoring at the beginning and throughout the lifespan of the relationship
  6. Have an on-premise application;
  7. Look up vendors and transactions quickly;
  8. Run data through a library of corruption and fraud tests;
  9. Look at a predictive model and see if it meets the profile of an improper payment; and
  10. Have visibility into data almost at their fingertips.

Under Step 4, companies must quickly analyze their data quickly and efficiently to determine if they need to self-disclose any potential issues. By sharing the attributes across corporate siloes, companies can make their individual models perform better and improve their compliance programs. This allows companies to access the data quickly and easily, allowing them to identify potential risks and areas of improvement. It also provides insights into the effectiveness of compliance programs, allowing companies to make better informed decisions concerning their compliance.

Overall, having access to relevant sources of data is essential for an effective compliance program. Companies can gain access to data through on-premise platforms. By leveraging these sources of data, companies can ensure their compliance programs are up to date and compliant with applicable laws and regulations.

Step 5 is to conduct monitoring at the beginning and throughout the lifespan of any business  relationship or transaction cycle. This is an important step as it allows a company to identify potential issues with their compliance program and take corrective action. Monitoring should be conducted at the beginning of a relationship or transaction to ensure that all parties understand the expectations and that there is no potential for criminal activity. Monitoring should continue throughout the relationship as well, as this will allow a company to identify any changes in behavior or activity that could indicate a potential problem. This can be used to gain insights into a vendor’s financial and transactional data, which is often a key indicator of future or even potential compliance violations.

Having access to relevant sources of data and conducting monitoring throughout the lifespan of a third-party relationship will help an organization meet the expectations set by the DOJ for an effective compliance program. With the DOJ’s recent announcement of amendments to the Corporate Enforcement Policy, companies have even greater incentive to self-disclose if they uncover potential violations, all of which demonstrates an effective compliance program. A data analytics platform can help companies quickly identify understanding of the risks and monitoring these relationships regularly, companies can ensure that they are compliant with all applicable regulations and review potential issues.

With a comprehensive view of their activities, organizations can quickly identify any changes in activities, such as unusual patterns of payments or activities, which could indicate a potential problem. Through visibility into third party activities and transactions, companies are able to gain a better understanding of the compliance risk associated with their third-party relationships. Moreover, businesses have a mechanism to identify any financial or transactional red flags.

Interestingly Walden advocates having an “on-premise application” for data analytics, which is he step 6.  He believes “This is an important step, as it allows companies to keep their data secure, while still being able to use predictive analytics and other compliance monitoring tools.” It can be hosted and managed as a service, “meaning that companies can utilize the platform without having to move large amounts of data around each month.” This helps companies to gain insights from the model without compromising their data privacy. Furthermore, this platform can be used to identify anomalous payments that may be indicative of corruption or fraudulent activities.

Join us tomorrow where continue conclude our exploration of using data analytics to create an effective compliance program.

Listen to Vince Walden on Data Driven Compliance

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Blog

Using Data Analytics to Create an Effective Compliance Program-Part 1

I recently had the opportunity to visit with Vince Walden for the inaugural episode of the newest podcast on the Compliance Podcast Network, Data Driven Compliance. Walden is a compliance professional with 15 years of experience, who left his day job and founded Kona AI, a cutting-edge innovation for compliance professionals. Kona AI is an on-premise platform to build advanced analytics and compliance monitoring that aligns with the DOJ’s expectations.

Over this multi-part blog post series, I will be discussing how to create an effective compliance program through  the use of data analytics by considering the requirement laid out by the Department of Justice (DOJ) in their recent pronouncements on a best practices, as well as the key trends and lessons learned from enforcement actions. Finally, we will consider the speech by Kenneth Polite on the changes to the Corporate Enforcement Policy and how to meet those requirements using data analytics.

It is important for compliance professionals to make informed decisions that are driven by data to ensure that the compliance program is effective and efficient. Data-driven decisions enable compliance professionals to make decisions that are backed by evidence, allowing them to make informed decisions that are based on facts and figures rather than assumptions or guesswork. Without data, compliance professionals would be unable to accurately measure the effectiveness of their compliance program or identify potential risks or areas of non-compliance.

Data-driven decisions also allow compliance professionals to identify areas of strength and opportunities for improvement. By utilizing data, they can identify trends, patterns, and correlations that can help them understand the underlying causes of compliance issues and formulate strategies to address them. Furthermore, data-driven decisions are more likely to be accepted and supported by stakeholders, as they are based on facts and have been thoroughly researched and analyzed. Ultimately, data-driven decisions ensure that compliance professionals are making informed decisions that are in the best interests of their organization. Walden articulate 10 steps you need to follow:

  1. Assess a company’s conduct;
  2. Self-disclose;
  3. Know quickly if there is a problem or not;
  4. Have access to relevant sources of data;
  5. Conduct monitoring at the beginning and throughout the lifespan of the relationship
  6. Have an on-premise application;
  7. Look up vendors and transactions quickly;
  8. Run data through a library of corruption and fraud tests;
  9. Look at a predictive model and see if it meets the profile of an improper payment; and
  10. Have visibility into data almost at your fingertips.

Under Step 1, the assessing of your company’s conduct begins with understanding the DOJ’s  expectations for an effective compliance program. Companies should have policies and procedures in place that enable them to access relevant sources of data, conduct ongoing monitoring of third-party relationships, and hold compliance officers accountable for the effectiveness of the compliance program. Additionally, companies should ensure they have the necessary technology in place to be able to quickly conduct an analysis of their data to determine if a self-disclosure is necessary. By taking these steps, companies can ensure they are meeting the DOJ’s expectations and are in a better position to successfully self-disclose if necessary.

Finally, assessing a company’s conduct should also involve an analysis of the company’s external communications. Companies should have a process in place for responding to inquiries from the public, media, and other stakeholders, and they should ensure that all communications are accurate and timely. Additionally, companies should ensure they are regularly engaging with their stakeholders to keep them informed of any changes in their compliance policies or procedures. By taking these steps, companies can ensure they are engaging in effective external communications that foster trust and confidence in their compliance program.

Self-disclosure is a key step in achieving an effective compliance program. Walden lists this as Step 2. It is important for companies to to demonstrate their commitment to compliance and avoid possible enforcement actions. Recently Kenneth Polite reiterated the importance of self-disclosure and discussed the changes to the corporate enforcement policy. Self-disclosure is viewed as a sign of good faith and can have a major impact on the DOJ’s decision to pursue or not to pursue a case.

However, to meet this requirement under the DOJ Corporate Enforcement Policy, companies need to have access to their data quickly in order to determine if self-disclosure is necessary. This means having an on-premises platform that can quickly search through transactions, identify potential corrupt payments, and compare them to a predictive model. This will demonstrate that they have an effective compliance program for the DOJ to consider them for leniency. But it requires having access to relevant sources of data and conducting monitoring throughout the relationship with third parties. Having an analytics platform can help companies detect anomalies in their data and identify patterns in the data that can help create an effective compliance program.

In addition to self-disclosure, companies must also take steps to ensure that their compliance program is effective and meets the standards of the DOJ. Companies should have access to a streamlined technology platform that helps them manage their compliance efforts. This platform should have tools to monitor third-party relationships, identify suspicious activity, and monitor compliance efforts. An effective compliance program also requires ensuring that employees receive proper training and understanding of the company’s policies and procedures. Companies should also have an audit system in place to regularly check that their compliance program is meeting the standards of the DOJ. This audit system should include periodic assessments of the compliance program and regular reviews of third-party relationships.

Of course, if you do not know you have a problem, you organization cannot self-disclose and cannot meet the mandates to demonstrate an effective compliance program. Hence under Step 3, an organization must understand if there is a problem or not which warrants self-disclosure.  With the right technology in place, companies can monitor their compliance efforts and ensure that they are meeting the expectations of the DOJ. Additionally, companies should ensure that employees are properly trained on the company’s policies and procedures. Taking these steps can help create an effective compliance program that meets the expectations of the DOJ.

Join us tomorrow where continue our exploration of using data analytics to create an effective compliance program.

Listen to Vince Walden on Data Driven Compliance.

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Data Driven Compliance

Vince Walden on Taking Your Compliance Program to the Next Level Through Data Analytics

Welcome to Data Driven Compliance, the newest edition to the Compliance Podcast Network. In this podcast we will 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 the 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 Kona AI.

In our inaugural episode, I visit with Vince Walden, a forensic data analytics expert and the CEO of Kona AI, a cutting-edge compliance monitoring platform. He has a long history of consulting for white collar crime investigations and forensic data analytics. He has worked on high profile data analytical projects such as Anheuser Busch’s BrewRite platform.

Key Highlights

  1. Discover how data analytics can be used to fight global corruption and identify improper payments.
  2. Learn how data transparency and cost-effectiveness are paramount to an effective compliance program.
  3. Investigate how data analytics platforms can be used to keep organizations out of trouble and make the business better.

Notable Quotes

“Compliance professionals are now being looked at to help spearhead this initiative around business transparency, especially into their third parties or their employee activities, and sometimes even customers or distributors.”

“Getting companies to commit resources to it, it needs to be cost effective.”

“Data analytics is always a topic at the conferences, at the conferences on social media, et cetera. Gaining insights into transparency in your data is paramount to an effective compliance program.”

“Being able to make the business better by adding cash back onto the balance sheet and stopping improper payments or finding errors or stopping a corrupt payment before it’s paid, that’s all making the business better.”

 Resources:

Connect with Vince Walden on LinkedIn

Check out Kona AI

Connect with Tom Fox on LinkedIn

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The Walden Pond

An Interview with Myself – How My Forensic Data Analytics Career Led Me to Kona AI

 

Host Vincent Walden goes solo as he shares his story of changing careers and discusses the direction he plans to take his new company in. Vincent is using his 20+ years as a legal, compliance and investigation technology innovation expert to lead Kona AI as its new CEO. Kona AI is the most innovative, AI-driven, cost-effective, and easy-to-use compliance and anti-fraud technology solution to mid and large companies on the market.

 

 

In the last months of his role as Managing Director at Alvarez & Marsal, he came to the realization that the Kona AI platform, which they had been using to help companies find improper payments, needed to be scaled. Now, he and his colleague Matt Galvin are collaborating with MIT to build an algorithm-sharing consortium of leading companies.

 

Resources

To learn more, and contact Vincent Walden, please visit Kona AI

 

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The Compliance Handbook

Evolution in Data Analytics with Vincent Walden


Ten years ago, Compliance was all about policies and procedures that are mere guidelines that hugely unaddressed how to measure compliance effectiveness, identify the metrics, and look at the accounting data. Internationally recognized anti-fraud and compliance thought leader Vincent Walden shares his insights on how far we’ve come since then. He talks about the practical strategies, tools, and techniques used in fraud detection and prevention applied to compliance and how data and data analytics have evolved, and his overall inspiring perspective in this conversation.
Major takeaways discussed in the episode:
✔️ Why Vincent’s involvement in fraud prevention in the early years of his career taught him strategies about the use of data and data analytics in compliance. “When a company was investigated for FCPA, what was the first thing that they asked for? They wanted emails and payment transactions. And why weren’t we looking at those proactively? And that’s really what drove my interest in building proactive compliance programs because I saw so many FCPA investigations that finding those improper payments was what they were making and breaking the cases. And that’s what drove a lot of my passion for building out these compliance program models.”
✔️ As an early advocate of using data in compliance solutions, Vincent saw how vital the melding is of internal audit and compliance. “Internal audit understood the books and records and compliance understood the legal risks. The magic was when the two worked together. That’s how it started. We’ve seen compliance become more mature, particularly over the last two to three years.”
✔️ Beginning in 2017, the DOJ started talking about the use of data in compliance. This changed the reception in the marketplace, empowering CCOs to have sufficient access to operational transactional data sources that were spot-on and accelerated proactive discussions. Compliance professionals will become more data-driven as time goes on.
✔️ Data sharing consortium in the future. According to Vincent, the idea of companies sharing their risk algorithms without having to share their data to build better, data-driven compliance programs and sharing best practices is something fascinating and worthy looking forward to.
✔️ The creation of A&M’s Digital Twin service is Vincent’s dream compliance monitoring platform. “This allows us to pull in client-relevant payments data and risk scores in a cost-effective way. That means what used to take me 300+ hours of staff time to pull payment data out of a system, and all the mathematical gymnastics put in a database and build out reports now takes me less than 30 hours. That’s a 10x reduction in time and a 10x reduction in fees.”
Vincent Walden is a Managing Director with Alvarez & Marsal’s Disputes and Investigations in New York. He specializes in forensic data analytics, continuous controls monitoring, information governance, and legal discovery services. His primary focus area is in providing leading technology perspectives on proactive compliance programs and reactive investigations.
LinkedIn: @vincewalden
Email: vwalden@alvarezandmarsal.com
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About Thomas Fox:
Thomas Fox, the Compliance Evangelist®, is one of the leading writers, thinkers, and commentators on anti-bribery and anti-corruption compliance. In this latest edition of The Compliance Handbook, he continues to arm seasoned compliance professionals and those new to the realm with the practical, actionable guidance and tools needed to design, create, implement and continually enhance a best practices compliance program.
 
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