Tool up with e‑disclosure

Spot­ting dis­as­ters before they hap­pen is the prime direc­tive of com­pli­ance offi­cers. But the grow­ing com­plex­i­ty of cor­po­rate com­mu­ni­ca­tion chan­nels makes the com­pli­ance officer’s job increas­ing­ly dif­fi­cult.

For exam­ple, staff may be mov­ing between fixed-line phones and mobiles to Skype, instant mes­sen­ger, What­sApp and Viber. Track­ing con­ver­sa­tions that flit between mul­ti­ple chan­nels can be chal­leng­ing.

And as we know, male­fac­tors don’t blurt out their plans, but rather cov­er their tracks, using code words and euphemisms.

To cope with these chal­lenges, com­pli­ance offi­cers are arm­ing them­selves with more pow­er­ful tools and sophis­ti­cat­ed tech­niques, includ­ing those drawn from the world of elec­tron­ic dis­clo­sure or e‑disclosure.

E‑disclosure is a legal field that deals with the exchange of doc­u­ments and infor­ma­tion dur­ing lit­i­ga­tion. An inves­ti­ga­tion may start with tens of mil­lions of doc­u­ments and thou­sands of hours of phone calls, but advanced tech­nolo­gies and e‑disclosure process­es can fil­ter the doc­u­ment pool down to a man­age­able sub­set of rel­e­vant mate­ri­als.

Experts in e‑disclosure have spent decades learn­ing to find hid­den cor­re­la­tions in con­ver­sa­tions. For exam­ple, key­words are scored and sort­ed by rel­e­vance, allow­ing lit­i­ga­tors to quick­ly zero in on vital case infor­ma­tion.

“The key is to give com­pli­ance offi­cers an inte­grat­ed view of all infor­ma­tion,” says Dun­can Gar­diner, Epiq’s direc­tor of foren­sic ser­vices. “The prob­lem is they often use a vari­ety of tools in iso­la­tion. They have some­thing to record and tran­scribe phone calls, some­thing else to exam­ine e‑mails. That approach is unpro­duc­tive.”

Worse, there is a time lag caused by poor process flow. Typ­i­cal­ly, com­pli­ance offi­cers put in an IT request for a set of doc­u­ments. These doc­u­ments are then export­ed and may be sent to a third par­ty for pro­cess­ing, which adds a secu­ri­ty risk. IT then runs a few search­es and hands the data back to the com­pli­ance team. This process is crude, time-con­sum­ing and dis­joint­ed.

The solu­tion to this inef­fi­cient and risky approach begins with an appraisal of a company’s exist­ing infra­struc­ture. Only then can the right e‑disclosure solu­tion be imple­ment­ed. “There’s no one-size-fits-all black-box approach,” warns Mr Gar­diner. “Some com­pa­nies may already have tools which they aren’t using prop­er­ly. Oth­ers have unique require­ments. It is vital that a thor­ough sur­vey of the land­scape is con­duct­ed before any con­clu­sions are drawn.”

The goal is to give com­pli­ance offi­cers total con­trol of the data, no mat­ter its source. They should be able to pull up e‑mails and direct­ly cross-check them with phone tran­scripts with­out out­sourc­ing the job to IT. Auto­mat­ed scan­ning can flag ear­ly warn­ing signs of sus­pi­cious activ­i­ty.

With the data at their fin­ger­tips, com­pli­ance offi­cers can now be vig­i­lant for emerg­ing threats. Mr Gar­diner explains how a plot might be detect­ed: “Traders might use code­words to get around a ban on trad­ing in cer­tain equi­ties. ‘Sun­ny’ means buy, ‘rainy’ means sell. In iso­la­tion these words are mean­ing­less. But track them against trades over time and they become red flags.”

When clients work with Epiq, they find the bur­den on IT is sig­nif­i­cant­ly reduced and cap­i­tal expen­di­ture is kept low

This approach is main­stream in e‑disclosure and is only now being adopt­ed by com­pli­ance offi­cers. The pres­sure of the Euro­pean Union’s Mar­kets in Finan­cial Instru­ments Direc­tive II and Gen­er­al Data Pro­tec­tion Reg­u­la­tion means com­pli­ance offi­cers have no choice but to seek out indus­try-lead­ing meth­ods.

The track record of com­pa­nies such as Epiq means the adop­tion can be done con­fi­dent­ly. The world’s top legal and IT teams already know and trust Epiq, and Epiq also works with com­pli­ance teams on their bud­gets and inter­nal stake­hold­er man­age­ment to ensure all par­ties are sup­port­ive. When a chief exec­u­tive realis­es his e‑mails and phone calls will be mon­i­tored, trust becomes a cru­cial con­sid­er­a­tion. Only a reli­able part­ner will do.

When clients work with Epiq, they find the bur­den on IT is sig­nif­i­cant­ly reduced and cap­i­tal expen­di­ture is kept low.

“Com­pli­ance offi­cers are now expect­ed to detect events before they get out of con­trol,” says Mr Gar­diner. “For­tu­nate­ly, they can draw on tools and process­es which have been proven to be effec­tive again and again in the most demand­ing of are­nas. Draw on that exper­tise and com­pli­ance can become incred­i­bly effec­tive.”

For more infor­ma­tion go to epiqsystems.co.uk