Technology, and the push for all things to be handled in a digital manner, can be both a gift and a curse for corporate leaders. On the one hand, it makes collecting data easier, but on the other hand, it could give way to increased instances of financial crime. 

Between paperless accounting work and increased geopolitical tension, finance chiefs need to be vigilant when it comes to their financial crime compliance programs, according to Leslie Bailey, vice president of business services at LexisNexis Risk Solutions, a global data and analytics company. 

“If you think about everything that has gone digital, in terms of transaction, and you think about cross-border or global transactions, financial crime is so much more expensive than ever before,” she said in an interview. 

Creating a synergy

With inflation still weighing heavily on executives’ minds, many are looking to take a leaner approach when it comes to spending this year, but taking preventative measures when it comes to combating financial crime is more than just upping your technology spending, according to Bailey. 

“You have to think about how you layer and implement your technology, and that's where you gain efficiencies,” said Bailey. “What we often observe is a lot of organizations purchase a lot of different things to solve their problem. They don't think ... take a step back and think about how those tools and technology interact with one another to create a faster, more robust solution,” she said. 

In order to create a robust program to fight financial crime, finance leaders need to be aware of the way fraud is committed. Fraud may even be committed by accident — CFOs should be especially wary of this type — when individuals feel pressure to make the numbers work. 

Knowing where your money is flowing

The most important thing is to really know how and where your money is flowing in and out, even down to your vendors, said Bailey. 

“If you think about the past couple of years, we've had to change vendors, because of the supply chain. Historically, this was not an area where organizations thought about exposure — they didn't look at how, and to whom, they dispersed money, or who their customers were doing business with. So I do think things of that nature need to be considered more broadly than they ever have been before,” she said. 

Now, compliance programs need to be able to withstand the increased opportunity for fraud to occur due to digitalization. 

“This used to just be a financial institution issue because they were looking to be in compliance with regulation. It's no longer that. It's spanning corporate across the board, and it is sound business practice to have something in place that says, ‘do we really know how money flows in and out,’” said Bailey. 

In terms of how the C-suite needs to work together to mitigate these risks, there is a certain mix of skills that can create the most effective strategy, according to Bailey. 

“There is greater collaboration amongst the C-suite than we've ever seen before,” said Bailey, “you have the CEO, chief technology officer, chief risk officer, looking at problems together and supporting the business operations in different ways, and then you have your inner play with the chief operating officer. I think those key individuals at the table are a powerful trifecta,” she said.