According to the most recent annual survey, compliance programs around the world expect to take on more responsibilities in 2022 as a result of stagnant enforcement efforts.
Kroll surveyed 700 risk professionals for its 2022 Anti-Bribery and Corruption (ABC) Benchmarking Report, with 50 representatives from each of 14 countries and territories. Respondents were asked about their compliance programs, their perspectives on the ABC regulatory environment, whether and how they incorporated environmental, social, and governance (ESG) initiatives in comparison to 2021, and their use of crypto and blockchain, which was new this year.
The survey was expanded from 200 respondents in 2021, with results discussed at the global, regional, and national levels.
Around 70% of respondents said their compliance departments would take on more responsibilities this year in the 2022 report. The "lull" in enforcement of the Foreign Corrupt Practices Act (FCPA) last year, according to Kroll, could contribute to growing concerns about an increased regulatory environment in 2022. According to the report, respondents also expected their responsibilities to grow as a result of tightening supply chains, economic and political uncertainty caused by Russia's invasion of Ukraine, and the ongoing impact of the Covid-19 pandemic.
In comparison to 2021, the majority of respondents (82%) expected ABC risks to increase or remain the same. The top security threat, according to 34% of those who believe risks will rise, will be cybersecurity and data breaches, while remote work and decentralized management will be the leading factors, according to 22%.
"By all measures, 2022 will have heightened regulatory complexity for compliance professionals, and corruption risks and global regulations will continue to diversify." According to the report, "this complexity necessitates a continued commitment to anti-corruption and bribery programs that meet regulatory expectations and are prepared for the future."
Financial pressure was cited as a growing risk by nearly three-quarters of respondents (17%), up from 6% in 2021. In the United States, this percentage was much higher, with 36 percent of respondents citing financial pressure as the primary reason for increased risk.
Seventy-nine percent of respondents said their compliance efforts were backed up by management. The same percentage of respondents believed their companies have an ethical culture. Fewer people (68%) believe they have the technology they need to complete the task.
Around 60% of those who expressed concern about the regulatory environment feared that regulations would be tightened. In 2022, 51% of those concerned about regulation believe that increased enforcement is on the way, and 41% believe that regulators will want more self-reporting.
44% of those who were concerned about regulatory enforcement said they were reviewing their compliance programs, 43% said they were updating their risk assessments, and 42% said they were evaluating existing policies. However, only 31% of compliance professionals were taking action because they expected increased scrutiny in 2022.
"This may be either due to muted concern for enforcement or their broad confidence in the effectiveness of their programs," Kroll speculated.
About 52% of respondents said they use blockchain in their ABC programs, while 48% said they do not have any plans to do so.
Middle Eastern compliance programs are leading the way in adopting blockchain, with 46 percent of respondents saying they are currently using it, compared to just 27 percent in Europe, 22 percent in Asia Pacific, 13% in the United States and Canada, and 11% in Latin America.
"These survey results demonstrate a certain, if gradually paced, increase in awareness about and use of the blockchain technology and its distributed security and validation features within the compliance and risk management functions of companies in the countries and regions surveyed," according to the report.
By fLEXI tEAM