“We are committed to developing our products to achieve our vision to become The Compliance Firm®. The place where a Chief Compliance Officer goes for strategic advice and solutions to make compliance a competitive advantage.”
The Firm saw another record year in revenue this year. We have grown the revenue of the Firm every year since the Firm was founded over 10 years ago. We also have continually made profits year on year, and we continually reinvest in product development to further our vision of being The Compliance Firm®. We have a long-term commitment to the market to grow and develop our Firm into the leading compliance practice in the industry. Our business has continually built on our success, and we are developing our client base and footprint.
Our business in 2016 saw lots of changes. We decided early that the year would be a ‘development year’, where we invested heavily in product development. While some of these changes are evident in product releases in 2016, the majority will be seen in 2017. We are committed to developing our products to achieve our vision to be The Compliance Firm®, the place where a Chief Compliance Officer comes for strategic advice and solutions for making compliance a competitive advantage. Our Firm needs to have a complete suite of products and services available across all industries. This means that we need to further develop our existing product set in broader areas across the full spectrum of compliance budgets.
While we constantly change our focus and strategy as the market and our clients change, our vision has not changed in our almost 11 years of being in business. We want to be The Compliance Firm® and known as the leaders in our industry. We want to be the leader in the compliance space. This does not mean we need to be a technology firm, nor a professional services firm, nor a data and intelligence firm; for us to achieve that vision, we need to be all those things. Technology, information services and professional services are the heart of what we need to provide to meet our vision of being The Compliance Firm®.
Growth across the regions
We have been very pleased with the growth of our business internationally. Some of our largest clients are located outside the United States, which has typically been our largest market. The challenges of growing internationally and focusing our products and services into geographical markets with relevant localisation and language needs are ever apparent, and we have risen to this challenge with great results. We now have products focused on certain markets and localised for certain languages. We will continue to develop our business to meet the needs of these local markets. We are continually looking at new markets to expand our sales and marketing teams, and we expect this to be further developed in 2017. On the delivery side, we made major developments this year with offices opening in Panama, Poland, Malaysia and Jordan. We have invested heavily in building our local talent in these markets, adding language and compliance expertise to grow our delivery teams. These research centres allow us to manage large-scale projects with increased capacity and speed. Unlike those of many of our competitors, these offices are entirely built, owned and managed by our Firm and contain only in-house employees. We are not interested in using freelancers or contractors or outside vendors to provide core services to our Firm or our clients.
Our core technology: The ComplianceDesktop® | Compliance Technology Platform
We have a team entirely in-house to manage the development, deployment and support of the ComplianceDesktop® | Compliance Technology Platform. Very few of our competitors have in-house development teams. However, we believe, that undertaking development in-house ensures that we can react quickly to market and technology developments. We will continue to enhance our in-house teams in this area in our main development centre in Manila. This year saw major changes to the ‘plumbing’ of our Platform to keep up with ever-changing technology. We will be expanding this significantly in 2017, with many new applications and modules and hundreds of more features across the product. From conflicts of interest disclosures to case management to third parties and to incident reporting, the ComplianceDesktop® | Compliance Technology Platform will be the essential technology platform for any compliance officer. In 2017 we will be enhancing the ComplianceDesktop® I Compliance Technology Platform app allowing you easy access the platform through your mobile device.
Screening out bad actors
In 2016, we saw a large uptick in our screening business. Our IntegraWatch® | Compliance Screening database, now contains over 4 million researched names of companies and people involved in compliance issues across 23 risk areas. We are not trying to win awards with the size of our database, but we are trying to win clients with the relevance of that data in helping to select and manage customers, potential employees and third parties. We kicked
off a round of data generation and review for 2016 and will to review in database further in 2017. We are leveraging our country-level compliance experts around the world to compile data relevant to our clients. Helping clients manage their screening programmes has been a focus in 2016, with clients from all regions adopting our Managed Services, where we conduct screening for the client. With Managed Services teams in Panama, Poland, Malaysia, Jordan, Manila and China, we can address the unique language challenges this creates.
Upgrading due diligence to a different level
We embarked on a big journey in 2016 to upgrade our IntegraCheck® | Integrity Due Diligence reports to what we call DD 6.0. The focus has been on how we write our reports and conduct our analysis so we are giving advice and direction, not just data. Building this kind of focus means that we need to know our clients, our markets, know our risk areas and know the tolerance that our clients have around certain issues. We have successfully launched our new model in 2016 and have had great feedback. This ‘what does it mean to you’ analysis is the heart of what we do in every IntegraCheck® | Integrity Due Diligence report. We will take this further in 2017 and improve our research methodologies and analysis even more.
Driving innovation in compliance
The Firm has always tried to drive the compliance industry forward with new and innovative ideas. We are launching in 2017 new practice areas concerning Advanced Analytics, Transaction Monitoring and Artificial Intelligence. We have been working with some of the world’s leading technology companies in developing solutions for the compliance space.
This focus is not only on including new technologies in our products, but also helping clients focus on managing their internal programmes. A good example of this is helping clients build data models for all their disparate data and visualising this on inexpensive analytics software — a simple yet effective way of getting a handle across the compliance function. We will be expanding our expertise in this area in 2017 and launching very interesting products. Every compliance officer’s strategy must include adding capabilities concerning visualising data, analytics, transaction monitoring, and management and outsourcing of routine work to either local (and much cheaper) outside resources or machines.
Supplier management and managing integrity risks
The Firm is increasingly working with sourcing, procurement and compliance officers to manage supplier risks. This is both in the provision of software solutions but also in assessments, risk profiling, training and due diligence. We see this area as one that many compliance officers have put into the ‘too-hard’ basket, hoping that someone will pick them up and manage them in the on boarding of a supplier or in procurement. In many cases, these integrity risks are not being managed. We built and released a platform for managing suppliers called Supplier Integrity®, and we are now implementing our technology for several clients. Unlike most software programmes in the market that purport to manage suppliers, our technology has the proprietary IntegraRating® | Risk Analyser that looks at 23 risk areas to assess a proposed supplier entering the system. Our algorithms are proprietary and seek to provide direction and risk assessments about the integrity risks that a supplier can pose to the client’s company. We have not built a simple workflow tool like many in the market. Our system combines expert analysis combined with questionnaires, workflows, next steps and screening and due diligence automation. We are excited about our new platform to manage supplier risks and expect to see Supplier Integrity® enhanced even more as this market matures.
Bringing to life the training programmes of our clients
Building an entirely new suite of next-generation content for compliance training has taken us the best part of three years, and in the second half of the year we will release Compliance Interactive®. We believe this long-awaited product will be a game changer for the compliance officer. While we do not want to give anything away here, this will be a major part of our business going forward, and we expect it will be a large player in the compliance-training industry. Stay tuned for more updates on our launch and development of this key area of our business.
The year 2016 was our biggest ever in revenue, and we saw increases across every product line. We also saw our geographical presence increase and our business expand into new segments. In 2017, we will be launching many new products and services, the result of many years of toil and development. This is in keeping with our vision to be The Compliance Firm®, the place that a chief compliance officer turns to for strategic advice and services to make compliance a competitive advantage. Achieving that vision means we need to continually exceed the expectation of our clients. That is what we are striving to do. Thank you for your support, as key stakeholders in our Firm, to achieve that vision.
This is an extract from The Red Flag Group Annual Report 2016/17. To read the full report please click here
Additional sections of the Annual Report 2016/17 include:
- Our 10-year anniversary and The Red Flag Group in numbers
- The market outlook for 2017
- Product developments 16/17 - ComplianceDesktop® | Compliance Technology Platform
- Product developments 16/17 - IntegraCheck® | Integrity Due Diligence
- Product developments 16/17 - IntegraWatch® | Compliance Screening
- Product developments 16/17 - Compliance Managed Services
- Product developments 16/17 - Supplier Integrity® | Suppliers Management Platform
- Product developments 16/17 - Advisory Services