Innovation In Compliance With Tom Fox

Your organization’s ecosystem is probably bigger than you think, and a big ecosystem presents bigger risks. Dan Kinsella is the Extended Enterprise Risk Management Leader at Deloitte Risk and Financial Advisory, and today we’re talking about managing these risks across the extended enterprise. The “Extended Enterprise” When we think about our organization, we have to think beyond our four walls: the extended enterprise is everything that we’re connected to in our environment.As businesses, we are leveraging more third parties than we ever have. Our objective is to make our organizations better, cheaper, and faster at driving bottom line improvement, and we can do that by leveraging these third parties in a more consistent and cohesive fashion. Types of extended risksForeign corrupt practices, laws, and regulations around the ability to conduct business globally is one of the top risks that global organizations focus on, and next on the list would be cyber or information technology risks.There are usually a ba

What are you doing to keep your documents secure and your data protected? Today we have Tomas Suros, Chief Solutions Architect, Practice Automation, at AbacusNext. They’ve developed an innovative, all-in-one system for the legal and compliance field that makes work more efficient and more secure. Today we’re learning more about the system and what it can do.Tomas’s background: when law meets techTomas attended law school at the time the internet boom was in full swing, with his classes applying their concepts to the internet, back when it still had no jurisdictional boundaries. Right after graduation, he worked for Pandora, a streaming radio entity and his first experience with the technology of law, and eventually, his interests turned to leveraging technology for compliance and developing software tools for lawyers. AbacusNext: What is it, and how does it work?AbacusNext uses software tools to protect data and give companies efficient access to them through a private cloud environment. Having a private clou

As the web gets more and more complicated, how can we keep up? Keith Laska, a board member at Hanzo, joins us today. Hanzo uses artificial intelligence and modern technology to improve compliance effectiveness. With the web being as dynamic as it is, our compliance solutions have to be, too. The story of HanzoAt Hanzo, they use data science to make their customers’ lives easier, covering both proactive and reactive compliance. But there’s one major difference: they collect, store, and offer insights and analytics on content in a native format instead of the usual plain PDFs. That may sound trivial, but it’s a complicated process. The aim is to preserve the web forever, and static PDFs remove almost all of the dynamic nature of the web. They needed a platform that could capture everything — metadata, JavaScript, videos that could play back — so future generations could have context and provide quality insights and analytics from the content.And that’s how Hanzo was born.What does Hanzo bring into the arena of

As the fraud risk landscape changes, how do you adapt? Today, we have Vince Walden and Matt Galvin. Vince is a Partner with Ernst & Young’s Forensic and Integrity Services Practice, and Matt is the Global Vice President of Ethics & Compliance at Anheuser-Busch InBev. We’re talking about an article Vince has co-authored in Fraud Magazine entitled: Accelerating Anti-Fraud Innovation, as well as innovations that Matt has put forward in his compliance program. What are some of the key reasons for the success of an innovation project in the anti-fraud arena? It’s about measuring compliance effectiveness and finding ways to keep compliance fun, interactive, and top of mind for employees. Putting systems in place so you can see measurable improvements in the quality of transactional data moving through a system is what’s driving a lot of the innovation in compliance. People are beginning to really understand the technologies available to them. What are some of the key reasons for the failure of an innovation

When doing business in a new country, do you know what the bribery risks are? Robert Clark is the Manager of Legal Research at TRACE International, and he’s here to discuss the TRACE Bribery Risk Matrix, an excellent tool for the compliance practitioner, and deep-dive into it and how you can use it — so you don’t get caught unawares.What is the TRACE Bribery Risk Matrix? It’s a tool for assessing bribery risks on a country-by-country basis. Before 2014, the best available resources for doing this were general evaluations of the perception of corruption in each country. This tool is more specific, and does two things distinctively: (1) focuses on business bribery risk, and (2) takes a multi-dimensional view of that risk by looking at a range of factors or domains. What are these domains and how do they work? Opportunity: which is concerned with the direct engagement with public officials in each country. It asks three questions: How much interaction can you expect there to be? The more interactions you ha

Are you using social media to get your message and your practice out there? Gyi Tsakalakis is the co-founder of AttorneySync, an internet marketing agency helping their clients grow their visibility and get in front of their audience. He’s here to share with us his insights around the use of the internet and social media — and why you’re already left behind if you don’t. How do you communicate the values of utilizing social media to your clients?It requires a lot of education because it still faces a lot of skepticism. It’s all about demonstrating that from search, to click, to phone call, to fee, clients will make a return on investment, and grow their social network and referral base. It comes down to those key metrics. Between 25-50% of the audiences Gyi speaks with still don’t have a basic website, and websites really are table stakes.Will a website or social media presence be able to help a general practitioner? It’s a no brainer. One of the challenges is to get out of the mindset of pitting the internet

Innovation can come in many forms: a new product, or a new piece of technology. Today we’re talking about innovation in a process, specifically, mergers and acquisitions. Our guest is Axel Kirstetter, the Vice President for Product Marketing, Content Marketing, and Pricing at Merrill Corporation, here to talk about M&A, and the seven critical M&A transaction mistakes.How does Merrill help companies in the M&A process?They have a virtual data room where clients can put information, content, and data for potential bidders to participate in the due diligence cycle. Bidders, buyers, and sellers worldwide can get together and exchange information via technology that’s compliant and secure. What is Synergy Savings? And what is its importance in the M&A process? In acquisition mergers, you’re combining two entities, and naturally, there will be some overlap between capabilities, production resources, and so forth. You can remove some of these redundancies to achieve Synergy Savings. For any acquisiti

Is the smart contract a key innovation that will change the way we arbitrate agreements? Today on the show we have Jacob Enoch, a partner at M. Firon & Co., to talk to us about smart contracts and the implications for both lawyers and the compliance profession.What is a smart contract?A smart contract is a computer protocol or program intended to facilitate, verify, or enforce the negotiations or performance of the contract. There is an emphasis on the automatic performance attributes of a smart contract and the fact that it no longer requires a leap of faith or an element of trust when it comes to dealing with the performance of such a contract. Jacob states that this introduces a shift in the way that contracts usually work.What’s the difference between a smart contract and blockchain?Blockchain is a technology that may be used as a platform for smart contracts, and it’s known for its reliable control of cryptocurrency and attributes that contribute to the certainty of automatic execution, which is at t

“Compliance” and “cinematic” aren’t words you often see together — but for our guest this week, Marc Havener, the pairing makes perfect sense. Marc is a filmmaker and the founder and CEO of Resonate Pictures, a company that produces cinematic training films that stick. Why cinematic training films? On today’s episode Marc shares about his innovative use of storytelling and how he uses it to communicate memorable messages.The divide across filmmaking and compliance trainingThe idea began when Marc’s friend asked him to do training videos in the style of the TV show The Office — which Marc recognized as the spark of creativity that could make communications stick. That experience opened his eyes to the world of corporate training and ethics, and made him realize that the perceived divide across filmmaking and compliance training isn’t all that wide. The heart and essence of filmmaking and storytelling is changing culture, and so it is with compliance training. Embedding a message in a story is the best way

What is blockchain, how does it work, and how can it apply to you? On the show we have Syed Hussain, the Global Chief Commercial Officer of BANKEX, a blockchain-based fintech company from New York City. They have an extraordinarily innovative tool, Securitization 2.0 Operating Systems for Capital Markets, and today, Syed tells us more about blockchain and how it can revolutionize the market.Blockchain: what is it, and why is it so revolutionary? This is the kind of technology that spans across humankind because it operates on two core foundations of human interaction: trust and incentivization. But blockchain technology allows us to make incentives a fungible resource that can be freely traded, facilitated by the trust that is systematically built in. That is, it allows us to digitize our assets  — i.e. anything that holds value, like art, or real estate, or copyrights, or even information — so that it’s freely tradable and traceable. Then, the ‘proof of asset protocol’ allows relevant parties

Today on the show, we have a guest who isn’t your typical compliance professional. Ronnie Feldman is the President and Creative Director at Learnings and Entertainments… and a comedian! Ronnie and his team help clients communicate more effectively through humor and entertainment, and when it comes to a subject as serious as compliance, Ronnie shares that laughter may be the best teacher.Engaging employees with comedyTreating a serious subject seriously is a surefire way to make it boring, pedantic, and to lose your employees’ attention. You have to separate the message from the delivery mechanism. As compliance professionals, employees might dislike or be afraid of you, so there needs to be a friendly and positive way to approach these subjects. Also, a majority of employees don’t think about these issues regularly, if at all, and this is mostly because we aren't communicating effectively. A better approach is to treat the subject matter like advertisers: things like helpline jingles might be weird, but it st

On today’s show, Tom chats with Kristy Grant-Hart, CEO of Spark Compliance Consulting. She and her team have developed a Spark Score Report, a tool to help you discover how your compliance program looks to the outside world. Kristy and Tom discuss the Spark Score report, what it means for your business and the industry, and how you can find out if your presence shows how truly committed your company is to compliance.What is the Spark Score Report? Is there a gap between how good your program is internally, and how it’s perceived externally? The Spark Score is a free report that gives you insights into just that. It’s a benchmarking tool that tells you what customers and outsiders see.Many underestimate just how important this information is. The public is looking at what you put out there. They’re searching for your presence — and this innovation solves this business need.This report that can be taken back to your company (e.g. your C-suite or managers) to help evaluate how your company is doing vis-à-vi

How can companies comply and keep up with the ever-evolving anti-money-laundering rules and regulations? Today we welcome Jennifer McEntire, the director of Financial Crime Compliance Strategy at LexisNexis Risk Solutions, where they combine big data and use advanced technology and analytics to help customers comply with regulations, evaluate and predict risk, and enhance their operational efficiency. Today, Jen and I are talking about how this can apply to non-financial service corporations, and the four key findings of their recently released report. How can commercial companies begin to assess their money laundering risk?Look at your money laundering risk instead of your anti-money-laundering compliance risk. Check your policies on payments, invoicing, and refunds, and ask if you can be used as a vehicle for money laundering. If you’re a company that sells high-value items, do you have controls in place that require refunds to go directly to the person who purchased in the first place or can payment be dir

Today’s guests are Jon Feig and Andy Reisman, who both work in the Integrity section of Ernst & Young. They are part of a group that published an article in Fraud Magazine entitled: What's your integrity agenda? Bridge the gap between intentions and behavior, which was an astounding piece in the area of innovation and compliance. What is integrity in an organization? Why do companies need to confront integrity risks directly? Andy defines integrity around actions: bridging the gap between the promises a company makes to act ethically, and its actual behavior to the stated promises. The main question is: “Are we doing what we said that we would do?” What is the issue of compliance? It’s both an art and a science. There are policies, systems, programs, and processes that control the integrity agenda. And these have to relate to helping leaders face issues and not shy away from tough questions and establishing compliance officers as trusted advisors. These pieces sit together as four interrelated elements of

We're midway through Tom's five-part series that explores innovation in the compliance function. In today's episode, he considers how design thinking can help Chief Compliance Officers create more robust compliance programs that will become deeply rooted in the company's core.In a recent Harvard Business Review (HBR) article, Jon Kolko discussed how design thinking can bring innovation into a compliance program. The article,  “Design Thinking Comes of Age," talked about how “the approach, once used primarily in product design, is now infusing corporate culture.” It can be used to redesign your compliance program for your internal customers, like your employees and contractors. The goal in redesigning the compliance program is to get these groups to fluidly follow compliance protocols without a second thought. Here are Kolko's Components of Design Thinking:Focus on the users’ experience with compliance. Designers should focus on the "emotional experience” of the users. Doing so allows the user to fin

What if you could create a team that would dramatically improve your company's forecasting ability? But to do so, you must expose those professional corporate forecasters' unreliability. Would you do it? Here for Part 2 of the five-part Innovation in Compliance series, Tom shares his insight into "superforecasting" and its role in compliance functions. Forecasting is the predictive capability organizations use to anticipate or enhance outcomes. The new "superforecasting" movement, led by Philip E. Tetlock and others, aims to enhance this capability even further by following four precepts.To frame the precepts, in a recent Harvard Business Review (HBR) article by Tetlock and Paul J. H. Schoemaker, entitled “Superforecasting: How to Upgrade Your Company’s Judgment,” the authors revealed three general observations: “Talented generalists can outperform specialists in making forecasts.”   “Carefully crafted training can enhance predictive acumen.”    “Well-run teams can outperform ind

So far in this 5-part series, we’ve dived deep into the different aspects of ‘front line’ compliance. For the final episode, Tom discusses the process of innovation itself. In an article in the MIT Sloan Management Review, entitled “Finding a Lower-Risk Path to High-Impact Innovations," authors Joseph V. Sinfield and Freddy Solis came up with a different method to view the innovation process. They call it the ‘Lily Pad’ approach, and Tom breaks down some interesting ways to apply it.Tom begins with the premise of the article, found in the traditional risk-reward theory, that talks about how the way an organization views innovation affects the way the company goes about it. Those that invest more want to see more return, and those who don’t often see more incremental changes.Which one is more effective? The authors of the article mentioned above believe the incremental approach, or the ‘Lily Pad’ approach, allows a progressive cascade of innovation moving forward - or leaping from one lily pad to the next.The

What is the intersection of innovation in your compliance program and the requirements of an effective compliance program? Today, Tom Fox continues his 5-part series on the front lines of compliance with Hallmark 10 of the Ten Hallmarks of an Effective Compliance Program.Hallmark 10 states that: “A good compliance program should constantly evolve. A company’s business changes over time, as do the environments in which it operates, the nature of its customers, the laws that govern its actions, and the standards of its industry. In addition, compliance programs that do not just exist on paper but are followed in practice will inevitably uncover compliance weaknesses and require enhancements. Consequently, DOJ and SEC evaluate whether companies regularly review and improve their compliance programs and not allow them to become stale.” What does that actually mean? In short, it’s about putting compliance into the fabric of your organization. There are many ways to go about doing this, and one of the most eff

This week, Tom begins a five-part series on innovation in the compliance function. Seeing as the compliance space is in constant evolution, now is a good time to talk about some innovations and how companies can implement them in their own compliance programs. Today, Tom shares his insight on agile innovation methods that you can consider for your compliance program.In a Harvard Business Review (HBR) article entitled, “Embracing Agile,” authored by Darrell K. Rigby, Jeff Sutherland and Hirotaka Takeuchi, said that agile methodologies “involve new values, principles, practices, and benefits and are a radical alternative to ‘command and control’ style management.” The transition is then accomplished by strategically moving employees “out of their functional silos and putting them in customer-focused multidisciplinary teams."One of the most basic problems is that business executives know only the bare minimum when it comes to agile and its potential dangers. This impedes them from understanding the comprehensive

What happens when a compliance program gets lost in translation? Or worse, what if you translate your compliance program but it's still missing important information and details? Carlos Ayres, Founding Partner at Maeda, Ayres & Sarubbi Advogados, works with compliance, investigations, and government enforcement to implement and enhance their compliance programs and anti-corruption measures. Tom and Carlos discuss the importance of ‘tropicalizing’ your compliance program and how it benefits the organization.What does tropicalizing your compliance program mean? Let's say you have a company in the United States and you decide to open a satellite branch in Latin America. It’s common practice for US-based headquarters to share their compliance programs and other resources to help set up the international branch. This is where the problems usually start. Compliance training programs and policies are often directly translated into the international branch's language with little to no regard for local compliance