SPONSOR

NOVEMBER 2017

FINANCIAL CRIME & OPERATIONAL SECURITY, EUROPE 2017

Strengthening the operational detection, collaboration, and response to financial crime

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SPONSOR

NICE Actimize is the largest and broadest provider of financial crime, risk and compliance solutions for regional and global financial institutions, as well as government regulators. Consistently ranked as number one in the space, NICE Actimize experts apply innovative technology to protect institutions and safeguard consumers and investors assets by identifying financial crime, preventing fraud and providing regulatory compliance. The company provides real-time, cross-channel fraud prevention, anti-money laundering detection, and trading surveillance solutions that address such concerns as payment fraud, cybercrime, sanctions monitoring, market abuse, customer due diligence and insider trading. Find us at www.niceactimize.com, @NICE_Actimize or Nasdaq:NICE.

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Anti-bribery industry challenge

1.2 WHITEPAPER

Corporations and other organisations are legally obligated to monitor and take action related to suspicious activities, related to bribery and corruption schemes. Governing regulations globally include the U.S. Foreign Corruption Practices Act (“FCPA”), the United Kingdom Bribery Act (“UKBA”), and the Brazil Clean Company Act, among others. Not fulfilling these regulatory requirements and leaving bribery undetected can lead to serious fines and heavy legal costs, negative brand impact, and even criminal convictions of corporate officers. Recent penalties ranged from tens of millions of dollars to a record $3.5 billion fine.

Typical ABAC compliance programs today include employee and partner training, whistleblowing vehicles, some internal controls and audits. Generally, programs work in the following ways:

• Training: nearly universally, organisations implement mandated annual bribery and corruption training in an attempt to enforce company ethics policies. Employees learn what procedures to follow in the event of a bribe.

• Whistleblowing: organisations offer dedicated lines of communication to report suspicious activities. These lines of communication can either be via anonymous or non-anonymous tips, to be pursued by the compliance organisation.

• Internal Controls: Many organisations put in place controls to enforce policies limiting spending on travel, expenses, gifts, and entertainment of existing and potential customers.

• Audits: Internal and external auditors conduct time-intensive manual reviews of transactional general ledger data, in an attempt to identify potential bribery and corruption schemes. These discoveries may be made long after the fact, but if found they are reported back to the compliance office for further investigation.

However, while these programs may help enable organisations to comply with ABAC regulations and policies, there are widespread deficiencies in ABAC program enforcement. For instance:

• Training: While ABAC programs generally educate employees to recognise what constitutes a bribe, the training does not offer a way to ensure real-world program compliance. Many organisations investigated for bribery related cases can affirm that employees completed training programs, but regardless chose to ignore them and commit crimes.

• Whistleblowing: Nearly 50% of ABAC enforcement actions result from whistleblowing. However, it is widely agreed that a gap in trust exists, both in organisations protecting anonymous sources, and in effectively investigating cases.

• Internal Controls: Organisations maintain basic controls on travel, expense, gifts and entertainment spending. Often these include merely basic amount thresholds in corporate expense systems that can be easily manipulated by employees through expense misclassification, splitting, or other means to maneuver around a control system.

Micah Wilbrand, Global Head - Anti-Bribery & Corruption Solutions, NICE Actimize

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• Audit: Often the last line of defense in ABAC programs, internal and external audits are undertaken to review organisations’ financial statements and identify potential abuses. These audits mostly involve manual processes, performed utilising spreadsheets and transaction reviews, and often include business activity 2-3 years after it has taken place.

Recently, enforcement agencies increasingly are demanding that organisations put in place appropriate processes to monitor the actual compliance of their ABAC programs. This compliance can be achieved by identifying unusual general ledger transactions and activity patterns.

However, since payments may not be risky in all cases, organisations must be able to analyse and determine if patterns of transactions represent bribery and corruption risk.

As a result, monitoring account activity and transactions flowing through a general ledger becomes critical to prevent bribery and corruption. Suspicious activities, patterns and transactions must be detected and reported to authorities in compliance with corporate policy, local laws, and/or national and international regulations. These reports often must be sent within specific timeframes, so organisations need strong, repeatable processes and enabling technology solutions to meet these requirements. Organisations also need to respond expeditiously to search requests from government authorities.

As regulatory and legal requirements continually evolve, compliance teams incur ever-increasing costs to respond quickly to new rules and guidelines. Disruptions to business processes and staffing requirements, though burdensome, are crucial to overall corporate performance. Yet, compliance organisations often struggle to demonstrate the value to the firm of these investments.

A robust and flexible general ledger monitoring system can help organisations deal with regulatory change, increase staff productivity, and contain program costs. Organisations should consider the following criteria to select an effective technology-based solution:

• Does the solution support current and future workflow and investigation processes?• Is the technology adaptable to changing business and regulatory requirements?• Can the system facilitate information sharing between multiple internal groups and regulators? • Will the system self-learn which transactions are normal for a particular customer, vendor, or intermediary?• Can the system consolidate alerts for a single entity or transaction?• Does the system offer consolidated whistleblowing functionality? • Does the solution provide aggregated statistics for management oversight?• Does the system create an audit trail for case resolution and for both internal and external reporting?• What is the overall effectiveness of my system? Is the effectiveness evolving over time? Has it increased following

the last tuning?

To develop and deliver an effective ABAC program in a timely and cost-effective manner, compliance officers should select a solution that meets these critical demands.

The Actimize ABC Solution

The Actimize Anti-Bribery and Corruption (“ABC”) solution suite provides end-to-end compliance capabilities. The suite consists of four solution modules, available as an integrated offering from Actimize:

• Travel, Expense, Gifts and Entertainment Analytics Risk Detection for monitoring existing policies for employee expenses

• Accounts Payable Risk Detection for monitor outgoing financial flows to vendors, agents and other third parties

• Accounts Receivable Risk Detection for monitoring of ingoing financial flows from customers or other third parties

• Whistleblowing Management to enable multiple flows for the reporting of activities

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Using a common platform, clients can streamline the workflow and share information amongst ABAC investigators for multiple payment and whistleblowing scenarios. Clients can also consolidate information sources and processes, thereby saving time and money. Additionally, since all Actimize solutions are built on this common platform, clients achieve a holistic view of enterprise risk and can reduce overall costs of data infrastructure, deployment, training, and support when deploying additional Actimize solutions.

Each solution module offers rapid deployment and a flexible environment to efficiently address ABAC compliance requirements. To manage the ABAC investigative process, financial institutions utilise Actimize Risk Case Manager, a robust, web-based tool that allows users to act on alerts, apply standardised workflows, and manage cases from generation to resolution, including auditing and reporting.

By offering a complete ABAC technology suite on a single platform, Actimize serves as an end-to-end compliance solution for ABAC and risk case management technology. With modular products and services, the Actimize ABAC suite supports different business environments and diverse client needs. In fact, organisations can benefit greatly from the interconnectivity and interaction between the solutions, providing additional context in assigning risk to customers, third parties and their activities, which can lead to higher quality alerts and a lower false positive ratio.

To proactively fight bribery & corruption risk organizations need ongoing monitoring of their procurement, payments, travel & expense data.

Actimize ABCA cloud based, Anti-Bribery & Corruption solution Provides real-time, up-to-date view of bribery and corruption risk across business, geographic, vendor and customer lines.

Learn More: www.niceactimize.com/ABC

info@niceactimize.com | www.niceactimize.com | www.niceactimize.com/blog | @nice_actimize | linkedin.com/company/actimize | facebook.com/NICEActimize

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