Thanks to the 2008 financial crisis, the compliance industry experienced a significant boomtown phase for years. For a while, the compliance functions at various companies expanded at a rapid rate. 10 years later now, the game has changed once again. Not surprising in an industry where change is the only constant and roughly 120 new regulations get added per day, globally.
The truth is – the compliance landscape is changing, there’s a new frontier to explore, and companies have to either find ways to keep up or fall behind.
“We have to focus on doing more with less. What we need to do now is act smarter, not bigger,” Cherie Axelrod says.
Axelrod is the Senior Vice President and Deputy Chief Compliance Officer for Western Union. She oversees budgets, human resources, fraud programs, remediations and project management for this global enterprise. Before spending the last six years at WU, Axelrod spent 25 years in the telecommunications industry. She’s not only witnessed the compliance boom firsthand, she’s helped drive it forward.
As a panelist at Compliance Week 2018, Axelrod had plenty of wisdom to share about creating a risk-based compliance program and doing more with less.
When you’re a large company trying to manage risk, the truth is you simply cannot be everywhere all at once. Especially, as in the case of Western Union, when your business spreads across 200 countries.
“At Western Union, we’ve definitely experienced a compliance boom. We increased our investment by over 200% over the past several years. We’re now spending approximately $200 million per year on compliance, and have about 2,500 employees in that space,” Axelrod says.
However, Axelrod admits, the company understands that at a certain point, the compliance function can’t just expand into infinity.
When you’ve hit a ceiling on how many people you can hire and how much manual oversight you can manage, there’s only one place to turn to for improved resources – technology.
“We understand that we can’t just keep growing [compliance] every year. We can’t go from 2,500 people to 3,000 people. So we’re using data and technology to be smarter about what we look at and how we look at it.”
The question now, not just for Western Union but for all companies concerned with maintaining an effective global compliance program, is how to invest their money in the right technology, and how to use and analyze data to improve their technological approach. The ultimate goal? It’s not just to improve efficiency and reduce costs, it’s also to more effectively manage the company’s risks.
As an international money-transfer organization, Western Union faces two primary risks:
- Risks concerning the consumers using their services
- Risks concerning agents and other front-line associates
So how does WU use technology to better manage their risk?
The key lies in the data their technology enables them to pull and the real time insights it provides. In real time, Axelrod mentions, tech can monitor consumers using WU systems to ensure transactions are legitimate, or to alert the right people in the right location quickly and efficiently if there’s any problem.
Without the right technology in place, however? The logistics of trying to manage that level of oversight on a global scale would be unattainable.
While it’s a simple law of physics that you can’t be everywhere and see everything all at once, with the right technology, you might as well be omniscient. Not a bad spot to be in if your job is to enforce compliance.