A Christmas future: Bribery and corruption in 2022
07 December 2016
By Mark Anderson
Over five years have passed since the UK Bribery Act was passed into law. Few will disagree that much has changed in the world of anti-bribery and corruption compliance in that time, most of it for the better. But with the World Bank estimating that more than $1 trillion is paid in bribes each year, corruption still looms large as a major cost to the global economy and a threat to trust and security in society. Moreover, 55% of global CEOs remain somewhat or extremely concerned about bribery and corruption as a threat to the growth prospects of their companies. In a time of low economic growth, corruption remains a major problem which both business and society need to overcome.
Rather than reflect on the past, on UN International Anti-Corruption Day it seemed an appropriate time to consider what the future holds for corruption prevention, enforcement and compliance five years from now. We will be expanding on some of these topics throughout 2017, but for now here are five predictions on what will be in anti-corruption compliance officers’ stockings in 2022.
Technology will enable automated and predictive compliance
Automation and artificial intelligence will continue to develop at an exponential rate, enabling faster corruption compliance and predictive prevention. This will give compliance officers and service providers more time to focus on complex issues. Some likely developments include:
- Processing power will increase significantly, linking to sensor technology and data analytics risk algorithms in real time. As a result, compliance reviews and risk assessments of business units and international operations will be better directed. Further, high risk transactions in areas like procurement and disbursements will be identified instantly with a greater degree of certainty.
- Fraud and corruption analytics tools will be connected with online training and HR systems. This will enable staff in high risk roles or taking high risk decisions to receive instant reminders of the relevant risks and code of conduct areas before making such decisions. Artificially intelligent compliance assistants will answer questions on routine topics, such as gifts and hospitality allowances, and will enable voice or virtual reality activated compliance procedures.
- Third party due diligence will be largely automated, with workflow, research and transaction monitoring tools connected in one platform. Research platforms, such as PwC’s RADAR system, will make relevancy and false positive decisions on research, and data feeds will be direct from third party systems enabling remote auditing and live compliance monitoring. Data may be shared between organisations in certain industries using Blockchain registers.
This is all good news for businesses willing to invest now, as compliance costs are likely to fall and compliance procedures will become more effective and efficient.
Cashless societies will eradicate facilitation payments
Perhaps the best news for anti-corruption campaigners is that the use of cash is on the decline in most world economies. The rise of electronic, particularly contactless, payment systems and the use of cryptocurrencies will see the number of cash transactions fall by at least 30% in five years. This means that while Granny may need to use alternative payment methods inside her Christmas cards, making facilitation payments or small cash bribes for routine services will be much more difficult.
Enforcement will continue to evolve and spread geographically
2016 looks to be a record year for international anti-bribery enforcement and, even with recent political shifts, anti-corruption enforcement will continue to increase and evolve. In the UK, the rise of Deferred Prosecution Agreements will continue and we will finally see adequate procedures tested in a court of law. Self-reporting will become much more prevalent, and other nations will follow France in enacting anti-corruption laws. Further, large economies such as China and India will join the US in extending the reach of their enforcement authorities beyond their own borders.
Societal action will be more effective than regulation
Corruption is becoming far less accepted in many societies. The rise of consumer and societal pressure, enabled by social media (through sites such as www.ipaidabribe.com) and data losses (e.g. the Panama Papers) will mean public campaigns against corrupt governments and businesses will be a more effective deterrent than regulation. As a result companies will need to monitor their social media and public profile closely as they currently aim to comply with regulation, and respond rapidly to incidents of corruption when they arise.
As a result, companies’ social media and public profiles will become as important to monitor as their regulatory compliance. Greater public scrutiny will increase the expectation for a rapid and effective response to incidents of corruption.
Ethical and transparent global business will be the norm
Finally, an aspirational prediction as we head into the new year: businesses will become more ethical, more transparent and better governed. While human nature and the persistence of corruption over the centuries means that we will not be predicting a decline in corruption in 2022, companies will increasingly reflect the values of their millennial workforces and shareholders. There will be a continued convergence of governance, risk management, ethics and compliance, and security management programmes into a single model of ethical and transparent business. Companies which already have this as a key element of their strategy will be market leaders, while others will not be around to see in the new year in 2022.
To discuss the issues raised in this blog please contact me:
Mark Anderson | Partner
Call: 020 7804 2564 | Email: email@example.com