Our survey respondents identified several challenges
in the due diligence process, which automation, including AI, may be able to solve. While most of the survey respondents felt that they have sufficient technology to address current challenges, a significant number (56%) are still not using automation as part of their due diligence process. Our respondents indicated there is value in using automation to address the pain points in the due diligence process and some plan to use automation in the next one to three years.
With 90% of 2021 survey respondents believing their ABC risks will increase or stay the same compared
to 2020, compliance organizations began the year with many concerns. With a new presidential administration
in the U.S. – compliance professionals wondered how
this would impact regulatory enforcement priorities. Additionally, questions persist around how other jurisdictions outside of the U.S. would set new priorities for a post-pandemic future. Certain countries will continue their multi-year drive to strengthen their judiciaries and enforcement arms; others, may directly address pandemic-related fraud by turning their attention to corruption in government aid and public contracts. The ABC compliance world always has at least one continuity – regulatory regimes will stay diverse and complex.
Looking forward to a post-pandemic work environment, the key question remains: which of the changes from the last year will be permanent, and how will the world move back toward the pre-pandemic paradigm.
For compliance professionals, this question will
be focused on the impact of the relevant changes
to ABC programs. Changes to hybrid work settings
will unquestionably keep the focus on cyber security and IT systems improvement. Remote monitoring
of third-party relationships will have to be further improved and the industry will have to stay focused
on the use of the most appropriate and scalable technologies and further integrate automation
as applicable.
Already initiated before the pandemic, but further accelerated over the last year as well, is the attention and emphasis on ESG and convergence of this topic across the world with ABC related issues, will drive Compliance officers to once again review the inclusion of ESG in their programs.
Lastly, regulators will be keen to investigate fraud during the pandemic, particularly related to how government aid was obtained and used. The role
of the compliance function to safeguard organizations against risk have never been more vital.
U.S. and Canada
would rate their ABC program as highly effective, with U.S. and Canada as most confident at 66%
Feel their compliance program has sufficient technology to address their current challenges
Kroll’s 2021
, the result of a survey of 200 executives conducted earlier this year across the globe, offers thoughtful insights into the state of anti-bribery and corruption (ABC) programs worldwide for the 10th consecutive year.
This year, with the world in flux, we eagerly anticipated reviewing the results of our survey. One year into the pandemic, we regarded this as an especially opportune time to understand and evaluate strengths, weaknesses and emerging trends in ABC programs across the globe. Additionally, this year, the survey not only delved into the views on the efficiency of ABC programs, but also probed further into the critical challenges faced by ABC compliance officers in our ever-changing world.
Important findings highlight that compliance officers are now evaluating their compliance programs as generally effective; however, even after years of advances, they
still feel the need for more advanced technology and automation tools to support their programs. Importantly, and a new focus of our survey, environmental, social and governance (ESG) inclusion in ABC programs is emerging, but more strongly in Europe, Latin America and Asia Pacific than the U.S. and Canada, highlighting important differences across regions.
Other findings reveal that high-risk countries and red flags uncovered during initial screening are the biggest drivers for respondents to conduct enhanced due diligence on their counterparties. However, there
is also increasing concern around the critical issue
of data security when conducting due diligence externally, stressing the importance of cyber hygiene and secure technology platforms.
Our five brief articles will share key findings from our survey and what we think will impact this ever-changing landscape in the coming months.
Thanks in advance for spending time to review these results, and as always, Kroll is available to discuss further details and is prepared to assist in improving your ABC compliance, readiness and overall program.
Foreword
Most Valuable Attributes
of Automation Technology
Education of Third Parties
on Anti-bribery and Corruption
Have strategies shifted in 2020–2021 because
of COVID-19 disruptions, or are responses to Kroll’s 2021 ABC survey simply demonstrating that more organizations are now monitoring and training
existing third parties?
The pandemic impacted third-party risk management and made onboarding processes and training more challenging, leading to increased scrutiny of processes when assessing third parties’ relationships beyond
the onboarding stage.
Survey respondents conducted more enhanced
due diligence based on red flags identified when
using a screening database, questionnaires, jurisdictions of operation for third parties or other information collected during the onboarding process. This highlights how a growing number of compliance professionals value risk-based approach to drive efficiencies and safeguard the reputation of organizations.
Third-Party Risk Management Trends
In-person on-site training
ESG is part of your
anti-bribery and corruption program
is
ESG be part of anti-bribery
and corruption compliance programs
U.S. and
Canada
48%
36%
Europe
62%
52%
Latin
America
84%
62%
Asia
Pacific
84%
64%
Inclusion of ESG in ABC Programs
ESG has become more than just a buzzword in recent years, as companies and investors acknowledge that they can no longer ignore the externalities and internal processes of their partner companies. Our survey results indicate that while respondents are overwhelmingly in support of ESG, and over half of the respondents have integrated ESG programs into their existing ABC programs, this support differs based on the respondents’ geographic locations and continues to be constrained by the challenges of implementing a robust ESG program.
The Changing Role of ESG
Read the full article
Centralized Platform
Most Relevant information found
Improved quality of
due diligence
39%
50%
39%
Cyber security and Data breaches
Impact of remote working/decentralized Management
Disrupted supply chains
46%
23%
16%
Anti-Bribery and Corruption Benchmarking Report
2021 2020
22%
Data Security
19%
Cost of Enhanced Checks
18%
Lack of Knowledge
Biggest Challenges With External Enhanced Due Diligence
More than 85% of survey respondents have their third parties undergo some level of enhanced
due diligence, demonstrating that compliance organizations continue to rely on this essential process to develop risk profiles and ensure
ABC compliance. However, as with prior years, compliance organizations have many challenges with enhanced due diligence, including ensuring data security, allocating increasingly restricted program budgets and achieving compliant decision-making. Our survey respondents noted that data security is now the single greatest threat that companies face at the enhanced due diligence stage of the third-party onboarding process.
Evolving Challenges with
Enhanced Due Diligence
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47%
20%
21%
42%
Distribute or post printed materials for employees to review
55%
35%
Include anti-bribery statement in code of conduct policy
25%
34%
Online or web-based training
35%
34%
Certification included in contract materials
39%
32%
Part of an onboarding questionnaire and process
9%
7%
Other
Read the full article
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46%
23%
16%
should
currently
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Join our experts for key insights from the report, including an overview of the current ABC landscape, trends for the upcoming year and a deeper dive into the critical challenges faced by compliance officers.
June 29, 2021
11:00 a.m. EDT / 4:00 p.m. BST
ABC Report
Webinar
