Tech-forward preventive vigilance to enhance governance

Tech innovation is transforming fraud risk management, fighting corruption on multiple fronts, and fostering a culture of integrity.

In brief

• Cross-departmental synergy and inculcating good governance practices will help organizations further their proactive stance.
• Vigilance teams can employ tech-led solutions to identify anomalies in data, analyze fraud trends and make informed choices.
• ISO certifications can be leveraged to achieve regulatory compliance along with setting the tone for a culture of integrity.

The recently concluded Vigilance Awareness Week, an initiative by the Central Vigilance Commission, underscores the pressing need to prioritize ethics and transparency for establishing good corporate governance within organizations. 

Vigilance teams across sectors traditionally use established methods to fight fraud and corruption, but they now increasingly adopt proactive strategies as essential. With innovation surpassing the bounds of imagination, technology is fast emerging as a key player for proactive fraud risk management. Implementation of a comprehensive proactive vigilance framework calls for a paradigm shift led by tech integration, collaborative efforts, extensive training programs, awareness initiatives to wage a multi-pronged war against corruption and promote a culture of integrity.

Establishing good governance frameworks for collaborative compliance

Constant regulatory overhaul can put a spanner in the wheels of organizations’ best laid plans around compliance.  Good governance principles are the cornerstone of most successful organizations and keep its compliance programs from derailing even in times of crises. Establishment of good governance principles can be enhanced through embedding preventive vigilance measures within the DNA of the organization. The preventive vigilance mindset needs to be ingrained within employees across all levels. Fostering cross-departmental synergy will help vigilance teams take a proactive stance towards preventing fraud, corruption, and other ethical breaches. This will not only automate good governance practices and ease compliance but also contribute towards building an integrity-first organization.

Tech-tonic shift in vigilance

With fraudsters devising devious ways to con organizations by using the latest technologies, vigilance efforts must keep pace. Manual methods of oversight and enforcement—even with their proven efficacy—are increasingly falling short against sophisticated schemes that threaten organizational and governmental integrity. Building a preventive vigilance framework from the ground up, with technology embedded at every level, will enable India Inc. to detect potential risks in real time and implement corrective measures beforehand. 

Data analytics, Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), Predictive models, and blockchain are offering organizations unprecedented opportunities to monitor, detect, and mitigate risks before they escalate into a crisis. Vigilance teams can start changing their stance from reactive to proactive by collaborating to build a tech-led solution, customized to address their unique needs. By identifying anomalies in data, using past experiences of fraudulent behavior or instances where maximum fraud has taken place, and leveraging predictive modeling, vigilance teams can empower themselves to make informed choices that will help them develop proactive vigilance strategies in the long run. 

The ISO edge

ISO certifications are strategic assets that can help an organization with their regulatory requirements and enhance their compliance standards. ISO 37001 provides a framework for establishing, implementing, maintaining, and improving anti-bribery compliance measures, and organizations must look at leveraging it to strengthen their existing compliance programs. In fact, adopting ISO 37001 aligns perfectly with the goals of organizations developing their preventive vigilance strategies. It offers practical guidelines for assessing and mitigating bribery risks within organizations and can serve as a roadmap to design and implement controls that deter unethical practices.

Additionally, ISO 37001 promotes a culture of ethical leadership, and the correct tone at the top is fundamental to preventive vigilance. By prioritizing ethics and transparency, leaders can encourage employees to inculcate good governance values. Vigilance officers trained in ISO 37001 can also contribute significantly to shaping this culture, ensuring that ethical standards are upheld at every level of the organization.

Training and awareness

While tried-and-tested, manual fraud mitigation and enforcement techniques are time-extensive and leave vigilance teams very little scope for proactive efforts. Adopting tech-forward solutions for data analysis, real-time monitoring, pattern-recognition, highlighting of discrepancies, instances of fraud, and predictive outcomes will free up their time for more strategic tasks. This will also eliminate potential human errors, enabling flawless vigilance round the clock.

However, the success of tech adoption lies in adequate and continuous training and awareness sessions of vigilance officers. Equipping them with tech skills will empower them to detect red flags proactively, minimizing the time and resources spent on investigations and disciplinary actions. Tech-savvy vigilance officers, through real-time data monitoring, can flag unusual financial transactions as they occur, allowing immediate investigation and response. These vigilance officers can also serve as agents of change within the organization by advocating the benefits of preventive vigilance using technology, educate about its limitations and encourage collaboration across the board. 

Sustainability first

While technologies like AI, ML, RPA have immense potential, they must be integrated thoughtfully and sustainably. This requires continuous investment in training, cross-departmental collaboration, and adherence to globally recognized standards like ISO 37001 and ISO 42001, which is specifically designed for Artificial Intelligence (AI) and provides organizations with a framework to ensure responsible and ethical usage. Adopting this standard, which addresses data privacy, fairness, and security, helps organizations build frameworks for managing risks, fostering transparency, and ensuring stakeholder accountability. Since it calls for the implementation of AI Management System (AIMS), adoption of the standard helps address potential risks associated with AI, including security vulnerabilities and bias. Through regular assessment of the impact of AI systems, it helps facilitate a proactive approach to compliance and risk mitigation, along with enhancing organizational reputation by demonstrating a commitment to responsible AI practices.

While tech-interference gives vigilance programs the boost it needs, organizations also need to understand that technology alone cannot prevent corruption and fraud. A strong ethical foundation, supportive leadership, and a continued commitment to transparency are essential. Technology should serve as an enabler, enhancing the capacity of vigilance officers to execute their duties effectively and fostering a culture of integrity.

The future ‘blueprint’ for vigilance

The Vigilance Awareness Week is a step in the right direction to start conversations around the need for proactive fraud risk management, but the message it drives will continue to shape the way organizations revolutionize their vigilance efforts over the next decade. Vigilance must be a continuous, tech-driven, collaborative effort. By investing in technology, training vigilance officers, fostering cross-departmental collaboration, and adhering to global standards like ISO 37001, India Inc can look at transforming its vigilance from a reactive process into a proactive one, empowering officers to prevent unethical and fraudulent practices.

Tech-enabled preventive vigilance is the future of governance, and will pave the way for a more transparent, accountable, and resilient working world. Let us continue to build on the momentum of Vigilance Awareness Week, taking meaningful steps toward a future where integrity and ethics are at the core of every organization.

This article first appeared in the November issue of Central Vigilance Commission's magazine KaleidoSCOPE