Following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and other recent regulatory activity, the corporate landscape in Australia has forever changed. The spotlight is on governance and culture, and the responsibility for monitoring and challenging these has been placed firmly on the shoulders of boards and senior management.
Little mistakes and small levels of misconduct as part of “doing business” are no longer acceptable and, just like the proverbial bad apple in the barrel, if left unchallenged, can insidiously taint corporate culture and behaviours.
But culture and governance are hard to measure. All you can really observe are indicators of culture and compliance – behaviours and breaches. And these indicators are often buried deep within an organisation – the internal email exchange between sales staff which reveals the blind pursuit of a month end sales target at the expense of client needs, or the seemingly innocent banter between colleagues on Microsoft Teams that actually highlights significant #metoo cultural issues. Without reviewing thousands (if not hundreds of thousands) of individual communications, how do you surface these red flags?
"It’s not enough, is it… to have those policies and procedures in place? Financial advisers need to comply with them" Banking Royal Commission. p1464
The role of in-house corporate investigation teams has therefore never been more prominent nor more difficult.
Litigators rely on e-Discovery platforms to manage the discovery of very large volumes of documents and, increasingly, are adopting Technology Assisted Review and other analytics to make this process more efficient and more accurate. In-house investigators can learn from this approach.
At KordaMentha we have re-purposed RelativityOne (the e-Discovery platform developed by Relativity) to enable in-house investigation teams to leverage the same technology used by litigators to quickly uncover the facts of an investigation and act on them.
In addition to the powerful analytics already built-in to Relativity, we have developed a suite of custom tools for investigators to surface ‘hot documents’ in the context of an investigation. For example, rather than manually reviewing thousands of documents, we have developed custom lexicons that, for example, review communications for phrases and patterns of keywords based on the fraud triangle (pressure on the individual, opportunity to commit fraud, rationalisation of actions) and summarise the results with intuitive data visualisations. This enables investigators to quickly identify areas for review (such as email communications reflecting high scores for all sides of the fraud triangle). We have also integrated RelativityOne with powerful artificial intelligence engines developed by IBM, Microsoft and Google that enables documents to be automatically analysed and scored for sentiment and a range of emotions. A collection of communications demonstrating a high fraud triangle rating and high levels of anger or fear are probably going to be high on your list of potential leads.
At KordaMentha, we believe the ability to develop a high level overview of large volumes of documents, and then immediately drill down to specific communications that are red flags, is critical to addressing some of the challenges arising from the Banking Royal Commission. After all, it is not the averages that matter. It is the worst affected client cohorts of the worst client complaints which actually provide insight into the truth of an organisation's compliance and culture.
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