The global market for the firm’s services remains strong and we continue to see growth in each of our product segments. We also see continued growth in markets around the world as countries start to push their anti-corruption and other legislation into the top tier of companies and enforce the legislation by conducting investigations and enquiries.
- Market focus on compliance is strong despite political changes
We have not seen any downtick in focus despite the changes in the United States political climate and the unclear political environment in the United Kingdom regarding Brexit. Indeed, we see more and more countries getting serious about compliance efforts and stepping up their legislation and enforcement. While some countries may have focused less on these efforts due to political reasons, the general trend is up.
2. Certifications are growing
The major trend that we have seen is businesses thinking more about certifying their compliance programs (stating with their anti-bribery and compliance management systems under ISO 37001). The trend is growing as the ISO 37001 standard becomes more broadly known and companies start to see the value of proving the existence and depth of their compliance systems to their key stakeholders, who are either demanding it or expecting it to be in place. As we say in our tag line: Proof through Certification™.
3. Procurement teams are engaged with due diligence
The continued growth of the supply segment has meant that procurement and supply-chain professionals are starting to think more about integrity and other supply-chain onboarding risks. There is still a view that a quick sanctions database check will fix all compliance risks, but that view is starting to be overcome with education and experience. The firm’s IntegraCheck® research due diligence products are perfect for the supply chain as they cover all the key 23 risk areas that most companies look at as part of the onboarding process.
4. Making use of due diligence across clients
We already use all the research we have done as part of our delivery of work to our clients by including the findings in our IntegraWatch® | Compliance Screening database, which is available to all subscribers. We are constantly adding to that database daily from the media and with the results of our research for IntegraCheck® | Integrity Due Diligence reports.
5. Repeating due diligence is becoming standard
The attitude from years ago, when due diligence was seen as a ‘one and done’ process, is changing. We are now starting to see a system where companies are renewing their due diligence at regular intervals and monitoring in between. Most companies now see this as a strong part of their compliance programs.
6. Better understanding of screening vs due diligence
The market used to be quite confused around what was due diligence and what was not, but we are now seeing more sophistication around the words used in the compliance market so consumers can better understand the different types of ‘due diligence’. Screening is now seen as a database check and due diligence is more of a deeper dive (i.e. a background check). These definitions help the industry understand the offerings in the market and make comparisons.
7. Use of AI and research tools
Our firm has made significant investments in developing AI and machine-learning tools to conduct research and ensure that our research is deep and defensible. We use these tools in both our media research initiatives and in building our database and subscription products. While these products are early in their development, we believe that using new technologies can help reform the due diligence industry to become more efficient and productive. While these tools will never replace human research teams, they can certainly make the process smarter and more productive and potentially much faster. Clients will start to see this more in 2019 as the effects of AI and machine learning become clearer.
This is an extract from The Red Flag Group Annual Report 2018/19. To read the full report please click here.