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FISA advice that professional services firms can provide

The preparation of this Financial Integrity System Assessment methodology has shown how much work is required before financial organisations and insurance companies can be assured that they have enough processes in place to identify, monitor, report and ultimately prevent bribery, corruption and fraud. 

This is not surprising since there is currently limited knowledge and experience of the nature of these activities.  For many businesses, the existence of a risk management function is regarded as sufficient protection against risk.  In fact, its role is to lead the steps to reduce risk as it is impossible for one section of an organisation to be all-knowing and all-seeing.

In addition, most financial organisations and insurance companies are even less prepared to develop strategies based on the good reputation that comes from practices aimed at building strong integrity systems to prevent corruption.  This means that there are benefits from a strong reputation – lower costs, market access, loyal customers, committed staff, access to capital and higher returns on investment which sit on the reputation balance sheet with great potential to contribute to increased productivity and returns.  This means that many financial organisations have un-harvested benefits available to them (for example, access to capital on better terms than present, challenging complacency, future proofing) with limited experience of how to realise these benefits.

Professional services providers can equip themselves to assist.  They have some additional expertise and experience already, including capacity in their forensic business divisions with knowledge of how to deal with bribery and corruption when it occurs.  This provides them also with the prevention and risk assessment tools.  They also include team members who can lead growth strategies based on brand, reputation and risk assessments that also identify opportunities.

Currently only a small minority of financial organisations and insurance companies see the risks as priorities and this is a reason that they fail to take advice on risk mitigation. 

An even smaller proportion recognise the gains that could be achieved from having strong integrity systems.  This suggests that when organisations undertake the upcoming survey, they may be in for a surprise about gaps in their awareness, risk management and strategic opportunities. 

This section outlines the way that professional services advisers can help.

The sub-sections below set out the nature of professional advice that enhances the culture and conduct of financial organisations and insurance companies for each of the nine areas covered by the FISA framework. 

Even those organisations with the scale to have this advice in-house would benefit from external advice, often provided from a different perspective and with the knowledge gained from solving similar problems across several financial organisations and insurance companies.

An objective of the FISA is that an annual online self-assessment will identify areas for improvement.  Transparency International NZ will then work with professional advisors to develop tools that can address these areas.   A virtuous cycle of learning will evolve aimed at improving culture and conduct.