Introduction: Data Analytics Tips for Compliance
Zennemis – Data Analytics Tips for Compliance. Since the US Department of Justice (DOJ) updated its FCPA guidelines on managing corporate compliance programs in 2020, businesses have continued to try to make the most of their own compliance programs. This is because regulators are paying more attention to them than ever before.
The DOJ stated that compliance programs must use advanced technology and data analytics to monitor employee and business partner behavior. They also need to demonstrate that these programs are functioning effectively and producing results.
Companies can still be held responsible for wrongdoing by their workers or third parties in the course of their business operations. This can be a huge risk for a company.
What does this mean for compliance teams?
The Department of Justice (DOJ) did not provide a clear checklist for adopting analytics. However, compliance officers can use one of the most valuable tools they have access to: data, to look at functions and imagine how they could lead to transformational growth.
What are the benefits of a data-driven compliance function?
By using the info that is already out there, compliance can be proactive, quick, and cost-effective. Compliance and audit can change how they work with the business, turning into a partnership that works together to solve widespread compliance problems, such as problems that go on for years without being noticed, investigations that stop business, and audits that cost a lot of money and time.
How can compliance teams leverage data analytics?
Most of the time, compliance is based on processes. Moving toward a future based on data may seem scary to some, but the merging of compliance and analytics is not as strange as you might think. Like other programs, data analytics programs work best when stakeholders are involved, the goal is clear, and staff are kept up to date on a regular basis.
These are the five best tips we can give you to help your compliance teams become data-driven.
Tip 1: Start small
It can be hard to understand the possibilities of data analytics if you haven’t seen the results for yourself. This can make it hard for businesses to adopt new technologies quickly and make it hard to get more money for them. You should start your change program with a small Proof of Concept (POC) project to get around these problems. This approach will be cost-effective, requiring only a small amount of data, and should be completed in a few weeks. After the proof of concept (POC) is finished, ensure you have an interactive dashboard with clear, actionable insights and recommendations.
Tip 2: Pick a known issue
Select an area that is known to have problems that are hard to fix, and begin there. A lot of the time, businesses have areas or business groups that have had problems or complaints from whistleblowers in the past. These people are the “black sheep.”
Focusing on a known risk is helpful because it means there are probably problems in that area. Solving problems we haven’t been able to solve before is a great way to get people involved and show what analytics can really do.
Tip 3: Engage with your stakeholders early
If compliance officers want to use analytics to change their business, they need to involve key stakeholders early on. This includes coworkers and people higher up in the management chain. Not only is analytics helpful for compliance, but it can also be used by other areas, like audit and risk. It will be much easier to get buy-in if you involve these partners early on and include them in the process. Showing stakeholders the POC results will give them real proof of analytics’ promise, and high-level ROIs can show what analytics can do for them.
Tip 4: Start with the data you have…don’t wait for perfection.
“Is my data good enough?” is the question our clients ask us most often when we help them set up a compliance analytics system. Most of the time, the answer is yes: it’s good enough to begin with. It’s better to start with bad or missing info than to not start at all. A lot of the time, businesses wait for long “data programs” to end or even start before they invest in data analytics. Of course, a lot can be done with very little to lay the groundwork for a full-fledged program.
Some clients already have in-house data functions to assist with analytics, but most begin by hiring data collection services. This process can be time-consuming and requires significant resources from the business to complete. It may surprise you that experienced data scientists can easily clean and connect data sets with minimal effort. Within just a few weeks, most systems can obtain usable data to measure and monitor compliance risks effectively.
Tip 5: It takes time!
It takes time for a role to change from a static and necessary one to a dynamic and strategic one. It takes time, organizing, managing stakeholders, and putting resources where they are needed. You should see results immediately, but it may take 12 to 24 months for these programs to fully develop. Early small wins that demonstrate the benefits for the business and organization will help things progress smoothly.
Now is the time to move toward a world that is more focused on data and analytics. The idea may be scary, but the DOJ’s new “stick” of compliance requirements will only get bigger as other officials follow suit. Compliance officers, on the other hand, should see this as a chance. Proactive compliance saves money and is quickly becoming the best way to do things around the world for this reason alone. When you take a more proactive approach to managing risks, compliance teams can go from being barriers to being enablers. They can also move up to a position of strategic advice instead of reactive prevention.
Conclusion: Data Analytics Tips for Compliance
In conclusion, data-driven compliance programs offer businesses a chance to manage risks effectively and proactively. Starting small and focusing on known issues allows teams to demonstrate the power of analytics. Engaging stakeholders early and utilizing existing data ensures smoother integration and faster results. While the transition takes time, the benefits of a strategic, data-focused approach are clear. Compliance teams can shift from reactive to proactive roles, becoming key enablers of business growth and risk management. Embracing these changes will prepare businesses for the future of compliance.
