Corruption has long been recognized as one of the most significant barriers to socio-economic growth worldwide, with the developing world being particularly hard hit. The situation has only become worse as a result of the coronavirus crisis. These facts underscore the need for all institutions – government, business, civil society, and multilateral organizations – to address corruption through collective action and public-private cooperation in technology development.
As much of the world has adopted more digitally-oriented ways to interact and transact, the pandemic highlights the need to modernize our approach toward anti-corruption systems by embracing new technologies. This view is shared by many business leaders who are tasked with meeting these challenges every day as they manage compliance risks across a wide range of industries around the world. We have had the good fortune to work with these experts in our capacity as Chair and Co-Chair of the B20 Saudi Arabia’s Integrity & Compliance Taskforce. Over the last nine months, we collectively developed policy recommendations to be considered by world leaders next month at the G20 Summit.
These recommendations focus on: (1) consistent digital identity standards; (2) increased adoption of public registers of beneficial ownership information; and (3) public/private partnership to support technologies that improve data quality in, and data sharing among, national registers. We urge global leaders to focus on building a culture of high integrity in the private and public sectors, including improving transparency in public procurement and leveraging emerging technologies to manage risks relating to corruption and fraud, by embracing these recommendations.
We strongly champion the adoption of consistent digital identity standards for both legal entities and natural persons. The G20, the UN, IMF, World Bank, and the Financial Action Taskforce have worked on these issues for years. The time and climate are ripe to comprehensively and consistently adopt digital identity standards, including identifiers used by decentralized systems. Achieving this in practice would significantly improve third-party due diligence efficiency and eliminate many redundant, paper-based processes.
Further, third-party risk management will be improved substantially by adopting the G20 Member States of national registers of beneficial ownership, built on open data standards, and available to the public. Such registers will bolster corporate due diligence quality while continuing to provide law enforcement with data to support investigations. While national registers are now present in dozens of countries, and public registers are now required in the European Union, there is much room for improvement across the G20.
Data quality within registers remains a challenge – and ultimately, data sharing among national registers will become a critical issue too. Managing data privacy requirements while improving quality and sharing will require advancements in privacy-enhancing technologies, like federated learning and homomorphic encryption. Public-private cooperation, building on the experience of the UK’s Financial Conduct Authority and the Global Financial Innovation Network through “tech sprints” and RegTech sandbox exercises, may hold the key to advancing these nascent technologies.
As we approach this month’s G20 Anti-Corruption Ministerial meeting, Member States have a historic opportunity to reaffirm the critical role of emerging technologies in global compliance efforts and to develop a framework for a strong public-private anti-corruption partnership, aligned with the G20 Anti-Corruption Action Plan 2019-2021.
History shows us disruption is deeply intertwined with risk and corruption. 2020 has given the compliance community, global businesses, and governments an opportunity to rethink how technology can combat corruption, with integrity as its foundation.
Mathad Al-Ajmi, pictured above left, is Chair of the Integrity & Compliance Taskforce at B20 Saudi Arabia and Vice President and General Counsel at Saudi Telecom Company (stc).
Karen Griffin, above right, is Co-Chair of the Integrity & Compliance Taskforce at B20 Saudi Arabia and Executive Vice President and Chief Compliance Officer at Mastercard.