In its July 2018 special report on white collar crime, Financier Worldwide Magazine moderates a discussion on evolving corruption risks for financial institutions (FIs) and investment funds. One of the expert panellists who participates in the forum is Sonja Pavic, an associate in Osler’s Litigation Department and a member of the firm’s Risk Management and Crisis Response Team. The discussion covers a range of topics related to corruption risks – from how they’ve evolved in recent years, to the impact of regulatory scrutiny, to strategies financial institutions and investment funds should deploy to identify and reduce their exposure to such risks.
Sonja explains that, “the risks of exposure to financial crime have increased [in recent years] due to a number of factors, including technology advances and evolving business practices for FIs and investment funds to consistently refresh their product and service offerings which are provided online. This environment creates evolving opportunities for wrongdoers to exploit and manipulate the processes as face-to-face transactions decline … FIs face related regulatory and reputational risk due to accompanying heightened regulatory oversight and activity, increased enforcement and investigations, and more public exposure and reputational risk through social media and the internet.”
In response to a question about the anti-corruption measures that FIs and investment funds should take, Sonja says that “[f]irms need to be proactive and responsive to evolving regulatory and customer expectations. Anti-corruption controls, policies and procedures need to reflect the current and ever-changing regulatory and legal landscape, as well as keeping up with the fast pace of change in technology and the business environment.
“Common pitfalls,” she continues, “include using templates based on one jurisdiction’s laws or outdated policies that are not tailored to the specific needs of the organisation, lack of clarity on responsibilities for compliance and accountability, not taking into account domestic laws and policies of the local jurisdiction where an international FI is operating, inadequate employee training on the policies, and failing to engage the board and senior management in rolling out and enforcing the anti-corruption programme.”
Read the entire discussion “Forum: Evolving corruption risks for financial institutions and investment funds” in the July 2018 edition of Financier Worldwide Magazine.