Seeing the Future

2 May

A long time ago, when I was an Assistant DA, I remember saying to myself, “why would anyone buy a book online, then wait two days to get it, when there are bookstores everywhere and you can have immediate gratification?  That company will never last.”  Of course, Amazon is still here.  So when I’m about to predict the future, I should confess that some earlier attempts have been dramatic failures.

That said, I’m confident in these predictions.

Part of our job as compliance officers is to see around corners.  It’s great that we’re reacting to the last issue, but what’s the next one going to be?  So here you go: the next three big issues.

  1. Privacy.  Yes, I can hear you already.  Privacy was one of the last big issues, right?  And that’s true.  But privacy is a growth industry, my friend.  The increasingly strict regulatory environment—including the new Dodd-Frank whistleblowing provisions—will make internal investigations more thorough, more lengthy, and more invasive.  As investigations grow in scope, personal privacy will become more and more of an issue.  Combine that with a global movement toward European-style thinking about privacy (i.e. it’s a human right), and you’ve got a whirlwind of activity around it.  It’s relevant now, and getting more so.  If I were you, I’d dust off those old Privacy textbooks and get to reading.
  2. Anti-money laundering.  Once again, I know that AML is a huge industry already.  In my opinion, the big is about to get much, much bigger.  I’m skeptical of the idea that the financial crisis fundamentally changed things.  I think Wall Street will go back to its old tricks as soon as attention wanes.  Maybe I’m just letting my cynical side run loose a little.  But with the Consumer Financial Protection Authority coming into being, and with the criticism of the Fed and other financial enforcement authorities for missing major events in the last couple of years, enforcers will try to look tough.  And no one looks tougher than someone taking on someone who has a lot of money.  Criminal forfeiture is the next big thing.  You can already see it, of all places, in the UK, with their Proceeds of Crime Act.  Here, expect to see money laundering charges leading to forfeiture proceedings.
  3. Information management.  I said it several months ago: 2011 is the year of the records retention compliance officer.  Getting “data from data” is the new priority one.  (Made easier, in my opinion, with certain sophisticated technology made, not coincidentally, by my employer, Recommind.)  With the apparent cost of incremental storage approaching zero (the actual cost is much higher, but not generally visible to the average employee), people save save save, and IT departments don’t delete data.  Data immortality is the next huge problem that companies must face.  Right now, they’re in denial.  Review costs, however, are skyrocketing.  What used to be a couple of Gig to review now can go as high as 1-2 terabytes.  That’s a lot of data.  One judge called it mathematically impossible to accomplish with manual linear review (i.e. a person looking at one document after another).  It would take too much time.  And as we’re all painfully aware, time is money.

So start preparing for these three things now.  You’ll thank me later.


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