How can organizations thrive with integrity in the new normal?

According to EY’s Global Integrity Report, 98% of respondents surveyed in India stated that the disruption caused by COVID-19 poses a critical risk to ethical business conduct. Over one third believed that unethical behavior will increase further because of the crisis.

Ethical and integrity challenges are likely to spiral upward in volatile times like these. As a result, compliance, risk and legal departments will look to use modern technologies such as Artificial Intelligence, Machine Learning and Robotics Process Automation as an enabler to remodel compliance programs, emphasize a culture of integrity during COVID-19, manage potential risks, manage a virtual workforce and meet regulatory requirements in this digital age.

With this background, EY’s Forensic Outlook 2021 highlights key considerations for organizations to confront the complex and integrated risks of today as they strive to thrive with integrity.

Fraud and corruption trends in a socially distanced world

As the size and scale of the electronic data increased with remote working and in-person investigation methods were no longer a viable option, digital forensic reviews and remote investigations became essential. In 2021, organizations will continue the digital transformation of compliance and opt for remote investigation procedures and interviews as preferred avenues. Redefining organizational culture in the new normal will be paramount. They will also need to deploy a combination of several techniques to detect and mitigate document fraud.

Managing remote workforces in the new normal

Organizations will need to take concerted steps to manage the post pandemic workforce through e-learning programs. Digital learning or e-learning capsules became the preferable mode for remote set-ups and will see continued proliferation in 2021 as well and beyond. This year will also see organizations incorporating digital verification techniques and technology solutions in their background screening processes when onboarding new talent. This can help dealing with the challenges of managing remote employees to a large extent. As the threat of cybercrime and unauthorized access looms large, companies will need to go all out to mitigate cybercriminals from attempting to steal and exploit critical business data. Protecting data in the new normal, data privacy and information governance are now more important than ever to safeguard critical digital assets, so it is not shared externally or misused.

Claims and disputes amid the pandemic

Emerging disputes amid COVID-19, issues around contract breaches and Intellectual Property Rights (IPR) infringements may cast a dark shadow on companies unless they have a holistic risk management strategy which supports business continuity plans. With a rise in IPR disputes around counterfeit drugs and health products, the focus would be greater toward resolution of urgent cases soon. The current year is expected to see greater growth of the construction and infrastructure sector, led by favourable reforms and schemes under the Union Budget. Consequentially, the sector is also likely to witness an uptick in potential disputes and litigation amid the pandemic.

Integrating environmental, social and governance (ESG) in compliance and governance frameworks

Rising expectations from different stakeholder groups around ESG issues will accelerate the pace for ESG compliance, compelling corporates to proactively approach and manage ESG risks as part of their growth strategies. One of the key drivers here is the recent announcements by the US Securities and Exchange Commission (SEC) on creating a Climate and ESG Task Force in the Division of Enforcement Division to proactively identify ESG-related misconduct. In the coming year, organizations are expected to integrate ESG issues with their risk, compliance and integrity programs. A robust ethics and governance program can also open access to large pools of capital, build a stronger corporate brand and promote sustainable long-term growth which will eventually benefit all stakeholders. Boards will also need to do more and have a proactive approach to keep a check on ESG polices and issues.

Emerging trends

Challenges around digital piracy have been plaguing global media companies for several years and over-the-top (OTT) media providers are being increasingly targeted by digital pirates. Amid the restrictions in the second wave of the pandemic, digital content consumption will soar, and piracy can result in substantial revenue losses for streaming platforms and content companies. Additionally, institutions and exam conducting agencies will have to gear up and outwit fraudsters indulging in malpractices such as candidate impersonation, cheating, collusion (with exam centres), and using unethical agents who offer shortcuts. 2021 will see many organizations turning toward differentiated buying behaviours where they will explore managed services. Compliance, ethics and legal departments will see a shift in mindset and seek to accelerate technology adoption.