How technology can help prevent corruption
Corruption is one of the biggest issues plaguing society today. Reports of corrupt activities and scandals are regularly on news, signifying the global presence of this vice. Bribery and corruption are often characterised by the misuse of positions of authority by powerful people. Corruption is not a contemporary problem, as historically, human beings have shown corrupt tendencies, ever since they organised themselves into societies. In modern times, corruption is present in both private businesses and government organisations. According to a report by CleanGovBiz, an initiative by the Organisation for Economic Co-operation and Development (OECD), bribes paid globally amount to $1 trillion annually, and results in loss of $2.6 trillion for the global economy, about 3 percent of the world's gross domestic product (GDP). According to the World Bank, the world's GDP was about $85.8 trillion in 2018.
It is important to take necessary steps towards prevention of corruption, for building trust in the society and the stakeholders. And undertaking such steps should not be limited to government organisations. Private enterprises also need to address the issue of corruption. According the 20th Global CEO Survey conducted by PwC in 2017, there has been a growing awareness in private corporations worldwide about their responsibilities towards transparency and governance.
While government and private organisations are taking steps to prevent corruption, technology is going to play a crucial role in preventing corruption. Technology, particularly emerging technologies, are going to help these organisations in managing risks and preventing corruption. In Bangladesh, government and private organisations are going through a phase of technology transformation, by implementing various software systems, including enterprise resource planning (ERP) and business intelligence (BI)-based systems. The executives of these organisations should use this phase of technological transformation to explore opportunities to prevent corrupt practices, by deploying and utilising technologies in required areas of concern.
For example, artificial intelligence (AI) is expected to play an important role in prevention of corrupt practices. In the next five years, automation technologies are going to improve the speed and quality of anti-corruption processes significantly. AI will enhance the overall effectiveness of anti-corruption practices, by speeding up generation of meaningful insights and identifying problem areas faster. This will enable the senior management of organisations to faster decide upon the type of corrective measures to be taken.
The emergence of real-time intelligence will be key to combatting corrupt practices. AI is going to make such implementations successful within organisations, as AI processes are expected to be free of corruption tendencies. Additionally, organisations are working to develop new sets of processes where humans and automated entities, including robots, can work together. According to the CEO Survey conducted by PwC, 52 percent of the respondent CEOs said they were exploring the opportunities to design and develop such workplaces. An automated work process negates the possibilities of corruption in the workplace and is expected to reduce corrupt practices to a great extent.
Introduction of technology in compliance reviews and risk assessments will make them more effective. Advanced technologies such as machine learning (ML) will work on the data generated from all over the enterprise, through sensors and human-machine interfaces. Such technologies will be able to develop and deploy sophisticated risk management algorithms to produce important and informative insights faster and deliver them to stakeholders across the organisation.
Additionally, the new generation tools on fraud detection and analytics will be integrated with the learning management platforms of an organisation to deliver customised trainings to each employee, depending upon the employee's vulnerability to corruption. Such software will also be able to monitor the employee's performance, before and after completing the trainings. Organisations should train their staff to use such technologically sophisticated tools and seek expert help from professionals whenever necessary.
AI-enabled digital assistants and conversational interfaces will make data input jobs of the compliance function much easier. Such tools will be able to assist employees by providing them real-time guidance on compliance, preventing problems related to corruption from taking root.
Technology-led transformations in the payments sector are also expected to prevent corruption to a large extent. Many countries are in the process of replacing cash with digital currency. According to a New York Times report, notes and coins now account for only 2 percent of Sweden's economy. For the United States and Europe, notes and coins account for 7.7 percent and 10 percent of the economy, respectively.
Mobile financial services (MFS) is one of the popular means of electronically transferring money in Bangladesh. According to the data published by the Bangladesh Bank, MFS had facilitated average daily transactions of Tk 1146 crore in August, 2019. Additionally, technology start-up companies are coming up with new e-wallet products and working on building the payment ecosystem around it. Such initiatives are going to drive the growth around electronic transactions and replace cash transactions gradually.
An electronic transaction always offers a higher degree of traceability and helps in detection of bribery and corrupt practices. Hence, growth in digital transactions will also help in preventing corruption to a large extent.
However, it should be noted that though technological transformations in transactions may minimise the instances of bribery, they may not necessarily be enough to minimise the motivation behind corrupt practices. The bigger challenge would be to minimise the motivation for corruption, particularly in areas of institutionally endorsed corrupt practices, both in government and private organisations. A broader set of change management activities should be undertaken to build awareness on the unpleasant side of corrupt practices. Simultaneously, effective remediating measures should be taken in the cases of detected corrupt behaviours. Both public and private organisations should have comprehensive policies to deal with corruption.
According to the data published by the World Bank Group, Bangladesh has recorded GDP growth of 7.9 percent in 2018. With such high growth, new business opportunities are flourishing, resulting in new risks of breeding corruption. At the same time, the global community would expect the country to minimise corruption and to make Bangladesh a more suitable destination for investments. A technology-assisted approach across private and government sectors in Bangladesh will help in combating corruption over time.
The writer is a partner at PwC. The views expressed here are personal.