How can companies improve their due diligence processes?

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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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How can companies improve their due diligence processes?

  1. 1. How can companiesimprove their duediligence processes?Tyson WienkerDirector of Strategy, Technology & Product Development, LexisNexis PacificGRC/ACI Conference, Gold Coast, November 18-20, 2012
  2. 2. Agenda 1 The True Cost of Bribery 2 A Global Perspective on Corruption 3 On the home front: Bribery Down Under 4 How can organisations improve their due diligence processes? 5 Emerging technologies & their impact on GRC 6 A Changing Landscape: Big Data and the future LexisNexis Risk & Compliance 1
  3. 3. The true cost of bribery BY THE NUMBERS “A consensus has now been reached that corruption is universal. It exists in • The World Bank estimates that each year all countries, both developed and bribery and corruption results in the developing, in the public and private misdirection of US$1 to US$1.6 trillion globally. sectors, as well as in non-profit and charitable organisations” • Corrupt practices costs companies as much as Asia-Pacific Development Journal 35% of the cost of doing business in Asia. THE GREATER COST $ • Creating uneven competitive environments • Undermining business and consumer confidence • Discourages investment through market instability $1.6 trillion • Undermining environmental protections • Flow on ‘blind eye’ effect on other criminal activity Sources: Ernst & Young, Upping the Ante Report, 2010; Transparency International New Zealand LexisNexis Risk & Compliance 2
  4. 4. A global perspective on corruption 70% of countries in regions Australian organisations trade in pose a serious corruption risk LexisNexis Risk & Compliance 3
  5. 5. Risk & Compliance: Bribery Down Under • More than 34% of AU & NZ organisations are 54% indicated that the operating in high risk jurisdictions level of corruption in Australia had increased • One in five of these organisations have identified in the previous three an incident of bribery or corruption in the past five years. years, with around 60% of these incidents occurring in the past 12 months alone. Transparency International’s Global Corruption Barometer 2010/2011 • 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 LexisNexis Bribery five years. Awareness Index LexisNexis AU/NZ Bribery Awareness Index 2012 Media coverage of 122% 120% bribery incidents has 118% increased by 10% in 116% 114% past three months 112% 110% 108% 106% Sources: Deloitte Bribery & Corruption Survey, AU & NZ, 2012; Aug Sep Oct LexisNexis Bribery Awareness Index, November 2012 LexisNexis Risk & Compliance 4
  6. 6. RiskRi & Compliance: AML/CTF Perspective Reports of suspicious transactions have nearly doubled in past 5 years Source: AML & CTF regime in Australia, Australian Institute of Criminology Report, 2012 LexisNexis Risk & Compliance 5
  7. 7. 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 LexisNexis Risk & Compliance 6
  8. 8. 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 LexisNexis Risk & Compliance 7
  9. 9. How can companies improve their due diligence processes? The three elements of effective due diligence processes Identity Sources of Beneficial Group Incorporation1 IDENTIFY documents wealth & funds ownership structure documents Company Negative Sanctions & PEP Legal2 VERIFY watchlists Lists structure & ownership cases news monitoring Negative3 MONITOR Sanctions & watchlists PEP Lists news monitoringONBOARDING ONGOING LexisNexis Risk & Compliance 8
  10. 10. How can companies improve their due diligence processes? The three elements of effective due diligence processes Identity Sources of Beneficial Group Incorporation1 IDENTIFY documents wealth & funds ownership structure documents LexisNexis Risk & Compliance 9
  11. 11. How can companies improve their due diligence processes? The three elements of effective due diligence processes Identity Sources of Beneficial Group Incorporation11 IDENTIFY documents wealth & funds ownership structure documents Company Negative Sanctions & PEP Legal2 VERIFY watchlists Lists structure & ownership cases news monitoring LexisNexis Risk & Compliance 10
  12. 12. How can companies improve their due diligence processes? LexisNexis Diligence assists in cost-effective, authoritative verification and monitoring of critical information sources Identity Sources of Beneficial Group Incorporation11 IDENTIFY documents wealth & funds ownership structure documents Company Negative Sanctions & PEP Legal2 VERIFY watchlists Lists structure & ownership cases news monitoring Negative3 MONITOR Sanctions & watchlists PEP Lists news monitoringONBOARDING ONGOING LexisNexis Risk & Compliance 11

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