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Make way for data analytics and automation

Parth Chanda (pchanda@lextegrity.com) is Founder and CEO of Lextegrity, based in New York City.

In the early 2000s, governments of less economically developed countries faced a choice on how they would make telephone communication available to their populations in the new millennium. They could follow the model of more economically developed countries and invest in landline systems, which involved massive upfront infrastructure investments and ongoing maintenance costs. And despite such large investments, they likely could reach only a small percentage of their population with no guarantees of good quality. The other choice—which was ultimately followed—was to make smaller investments in higher-quality modern cellular technology, an area where innovation would continue to move at a breakneck pace and the quality of service would be far better.

The decision to skip landline technology and move directly to cellular communications was an example of a “leapfrog” moment—where countries were able to leapfrog over an inferior legacy approach to a superior modern approach. This moment paid off over the next two decades in the form of better accessibility to telephones for far more people at lower costs. In addition, unforeseen benefits were unlocked over time. For example, the development of phone-based payment systems made commerce and access to capital easier for billions of people—an unexpected benefit of choosing the path of cellular technology.

Today, compliance functions in many organizations face a similar leapfrog moment. Legacy approaches to tackling fraud, corruption, conflicts of interest, and financial crimes are being replaced by more modern approaches deploying data analytics and automation. Organizations building or updating their compliance programs, or reassessing their legacy programs, have the opportunity today to leapfrog old approaches and embed new technology-driven strategies that already promise better outcomes and will undoubtedly lead to unexpected benefits down the road.

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