Compliance officers are increasingly seeking technology solutions that improve their teams’ access to financial and operational data, and that provide risk monitoring and mitigation. Earlier this year, the U.S. Justice Department instructed prosecutors to evaluate data access and analysis at the companies they investigate. Recent settlement trends indicate that regulators are willing to reduce penalties for companies that implement data analytics and monitoring tools in their compliance programs.
Despite the incentives for implementation, uptake of these technologies has been slow due to budget constraints and minimal options for one-size-fits-all tools. “The market for off-the-shelf solutions also has been slow to develop as companies look for specific tools to suit their risk profiles and compliance needs,” The Wall Street Journal reports. “Bespoke analytics and monitoring services, meanwhile, can be pricey, a difficult pitch for a corporate function largely viewed as a cost center—especially in the middle of a recession.”
“There is no magic formula to this,” said Piyush Sharma, a deputy chief compliance officer at Alexion Pharmaceuticals Inc., told the WSJ. “Everyone’s coming from different companies with different risk profiles.”
One Microsoft subsidiary in Hungary, for example, built a compliance analytics system to flag high-risk partnerships and deals during an investigation into bribery of foreign officials via software license discounts, which resulted in a $25 million penalty. The U.S. Justice Department and SEC acknowledged that the fine was lessened in response to the company’s increased use of data analytics and transaction monitoring.
Other companies are hiring data analysts and utilizing third-party applications to monitor risk. Chemicals manufacturer Ablemarle created a custom data-analytics program and hired a data scientist after it discovered possible improper payments to third-party sales representatives in 2018. Previously, the company relied on a forensic accountant to analyze data within its compliance program. The new in-house analytics platform allowed the company to monitor risk throughout the business. 
Elizabeth Mullen is an editorial consultant for Internal Audit 360°.