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Tyson Wienker, Director of Strategy, Technology & Product Development for LexisNexis Pacific discusses the true cost of bribery, how can organisations improve their due diligence processes, emerging technologies & their impact on global risk and compliance at the GRC/ACI Conference, Gold Coast, November 18-20, 2012.
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Tyson WienkerDirector of Strategy, Technology & Product Development, LexisNexis PacificGRC/ACI Conference, Gold Coast, November 18-20, 2012
How can companies improve their due diligence processes?
2LexisNexis Risk & Compliance
Agenda
The True Cost of Bribery
A Global Perspective on Corruption
On the home front: Bribery Down Under
How can organisations improve their due diligence processes?
Emerging technologies & their impact on GRC
A Changing Landscape: Big Data and the future
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3LexisNexis Risk & Compliance
The true cost of bribery
“A consensus has now been reached that corruption is universal. It exists in
all countries, both developed and developing, in the public and private sectors, as well as in non-profit and
charitable organisations”
Asia-Pacific Development Journal
$$1.6 trillion
• The World Bank estimates that each year bribery and corruption results in the misdirection of US$1 to US$1.6 trillion globally.
• Corrupt practices costs companies as much as 35% of the cost of doing business in Asia.
BY THE NUMBERS
THE GREATER COST
• Creating uneven competitive environments• Undermining business and consumer confidence• Discourages investment through market instability• Undermining environmental protections• Flow on ‘blind eye’ effect on other criminal activity
Sources: Ernst & Young, Upping the Ante Report, 2010; Transparency International New Zealand
4LexisNexis Risk & Compliance
A global perspective on corruption
70% of countries in regions Australian
organisations trade in pose a serious corruption risk
5LexisNexis Risk & Compliance
Risk & Compliance: Bribery Down Under
• More than 34% of AU & NZ organisations are operating in high risk jurisdictions
• One in five of these organisations have identified an incident of bribery or corruption in the past five years, with around 60% of these incidents occurring in the past 12 months alone.
• Despite this, 80% of organisations with offshore operations either do not regard foreign bribery and corruption as one of the top five risks in the next five years.
Aug Sep Oct106%108%110%112%114%116%118%120%122%
LexisNexis Bribery Awareness Index
Media coverage of bribery incidents has
increased by 10% in past three months
LexisNexis AU/NZ Bribery Awareness Index 2012
Sources: Deloitte Bribery & Corruption Survey, AU & NZ, 2012; LexisNexis Bribery Awareness Index, November 2012
54% indicated that the level of corruption in
Australia had increased in the previous three
years.
Transparency International’s Global Corruption Barometer
2010/2011
6LexisNexis Risk & Compliance
Ri
Reports of suspicious transactions have nearly doubled in
past 5 years
Risk & Compliance: AML/CTF Perspective
Source: AML & CTF regime in Australia, Australian Institute of Criminology Report, 2012
7LexisNexis Risk & Compliance
The challenges of customer risk for businesses
Key verification challenges
• Foreign Governments• Politically Exposed
Persons• Foreign Companies
Source: AML & CTF regime in Australia, Australian Institute of Criminology Report, 2012
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The hard labour of due diligence
Two-thirds of Australian businesses are reliant on manual
due diligence processes
48% of AU & NZ organisations do not
have any formal policy or compliance
program to manage corruption risks.
Source: AML & CTF regime in Australia, Australian Institute of Criminology Report, 2012
9LexisNexis Risk & Compliance
How can companies improve their due diligence processes?
The three elements of effective due diligence processes
IDENTIFY
VERIFY
MONITOR
Identity documents
Sources of wealth & funds
Beneficial ownership
Group structure
Incorporation documents
Sanctions & watchlists
PEPLists
Company structure & ownership
Legal cases
Negative news
monitoring
Sanctions & watchlists
PEPLists
Negative news
monitoring
ONBOARDING ONGOING
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10LexisNexis Risk & Compliance
How can companies improve their due diligence processes?
The three elements of effective due diligence processes
IDENTIFYIdentity
documentsSources of
wealth & fundsBeneficial ownership
Group structure
Incorporation documents1
11LexisNexis Risk & Compliance
How can companies improve their due diligence processes?
The three elements of effective due diligence processes
VERIFYSanctions & watchlists
PEPLists
Company structure & ownership
Legal cases
Negative news
monitoring2
IDENTIFYIdentity
documentsSources of
wealth & fundsBeneficial ownership
Group structure
Incorporation documents11
12LexisNexis Risk & Compliance
How can companies improve their due diligence processes?
LexisNexis Diligence assists in cost-effective, authoritative verification and monitoring of critical information sources
MONITOR Sanctions & watchlists
PEPLists
Negative news
monitoring
ONBOARDING ONGOING
3
VERIFYSanctions & watchlists
PEPLists
Company structure & ownership
Legal cases
Negative news
monitoring2
IDENTIFYIdentity
documentsSources of
wealth & fundsBeneficial ownership
Group structure
Incorporation documents11
