“Finding a needle in a haystack” seems to be apt to describe the role of a forensic investigator or compliance professional. Over time, fraud, bribery and corruption risks have turned sophisticated, perpetrators have become smarter, and data in the form of bits and bytes has become central to unearthing critical evidence, transforming the “haystack” into a “grassland”. With the expanse incredibly broad, some of the biggest dilemmas for investigators during the process tends to be ascertaining 1) the very existence of a (crucial) piece of information, 2) figuring what does exist, and 3) where to begin that search in the first place?
The versatility offered by technology can be a key enabler to get a proactive and prompt response to these questions and address many challenges.
Taming your data
Organizations must use the data gleaned to their advantage, tame it and use it readily to generate patterns and trends that can mitigate risks and enhance integrity. Today, there are multiple technological tools available that can help compliance and investigation functions do this.
Forensic Data Analytics
Sifting through free-text comments among thousands or millions of records in a spreadsheet to pinpoint fraudulent transactions is not only a daunting task, but also an inefficient way of analyzing available data. Forensic Data Analytics (FDA) can be useful to structure this data, reveal new insights and highlight red flags. For example, FDA can be deployed to collect and use structured and unstructured data to identify potentially improper payments or kickbacks, as well as highlight patterns of unethical behavior. FDA can be integrated with continuous monitoring tools and analysis of data (in real or near-real time), to enable a rapid response when flagging up suspicious or fraudulent transactions.
Global companies possessing large volumes or varieties of data may require cutting edge and sophisticated technologies. To address this need, Big Data technologies and other parallel processing or in-memory processing systems can significantly improve the speed at which analytics are conducted and simplify data for better decision-making.
It has been observed that cases of fraud may be detected after months and sometimes even years. FDA combined with visualization and forensic technologies has the potential to reduce the lag time between when the fraud is committed, and its detection. Compliance professionals can benefit using FDA as it can highlight gaps that may be exploited by fraudsters, and strengthen ethics and governance frameworks. While some of these might be false positives and genuine transactions or approvals, the system would typically flag these in advance and mitigate possible damage.
Data can provide significant indicators to mitigate unethical activities at the workplace. For example, analytics-based dashboards may be used to highlight various trends – a sudden increase in purchases from a particular vendor, vaguely defined descriptions or orders placed on weekends, or buyers processing purchase orders outside their usual scope of responsibilities. Collating such information can help compliance teams to proactively identify possible red flags that can mitigate future fraud risks.
Artificial intelligence and Robotics in Compliance
In recent times, we have increasingly seen the application of artificial intelligence (AI), bots and Robotics in forensic and compliance that can help configure systems to reason, collect, extract and recognize patterns. Machine learning enables the application (or Robot) to get smarter, learn with every new step or incident, and distinguish between legitimate and suspicious transactions. They offer great versatility and flexibility after configuration.
Additionally, technologies such as AI and Robotics have the potential to reduce the need for human intervention in manual tasks, thereby allowing the compliance function to focus on interpreting and evaluating the results, and taking proactive action. This is an area in the global spotlight, and is expected to evolve significantly with time.
Organizations can also use AI-led chatbots as part of their ethics and corporate integrity frameworks. For example, an employee may seek the chatbot’s help to derive information on the organization’s gifts policy. The questions would then get logged in the system and extracted later to decipher trends on employees’ understanding of policies, their geographical spread, designations and other parameters. Analysis from this data can be subsequently used to increase trainings or awareness campaigns for a specific location, topic or people.
Technology can also be leveraged to raise awareness on ethics, encompassing the code of conduct, anti-bribery and anti-corruption policies, gifts policy, conflict of interest and others. These can be through e-learning, micro learnings and video messages among others.
Extracting forensically sustainable data to be used in the court of law is extremely crucial during an investigation or ongoing legal matter. In addition to the content, emails, files, etc., computer forensic technologies can enable the extraction of meta data associated with such files, which may hold critical evidence in a legal dispute, or fraud and bribery related case. The meta data would reveal the document’s origin (date and time) on the computer, when it was last edited, saved or printed, as well as user details carrying out these actions. These tools are not limited to computers, and can be used on mobile phones as well as other devices.
It is prudent to note that many organizations may attempt to conduct forensic imaging using local IT teams. More often than not, this can turn out to be detrimental to the investigation efforts and may not always produce positive results. In case of (ongoing or expected) legal cases, courts demand proof of the facts and evidence that has been extracted in a forensically sound manner and remains untampered.
Filtering through large volumes and varieties of electronically stored information (ESI) is not an easy task for any organization, especially those with a large geographic spread. When the volume of data is large, assessing an optimum approach to filter critical and privileged data can be time consuming. However, specialized eDiscovery teams working across geographies can ease the burden on companies by reducing and filtering the amount of ESI for a quicker and effective review.
The responsibilities resting on the shoulder of forensic and compliance functions can be fairly onerous. Hence, organizations should institute robust ethics, integrity and compliance policies, procedures and hold trainings and supplement these with new age technologies. Ultimately, if companies do not evolve with changing technologies, they may fall behind the value and competence curve. The future will demand adoption of smarter solutions and ways of dealing with data to mitigate risks and enhance ethics. Emerging technologies such as AI and automation can be used extensively for improved performance, business success as well as raising the integrity quotient.
The article first appeared in Ethisphere’s 2019 Business Ethics Leadership Alliance (BELA) South Asia Magazine, and can be accessed here: https://bit.ly/2B0TBxo