So in order to be effective, compliance management needs monitoring, measures and metrics that will offer assurance to the board of directors and the executive management who had established these procedures and policies in hope of fostering compliance management process. Without the effective management of compliance risks, the organization is simply reactive, at best, and can be noncompliant, at worst.

For a majority of companies, complex accountabilities based on compliance have developed in an ad hoc manner over period of time. Since new procedures and policies are developed, they are added into the existing management structure, thus forming quite a few elements of compliance management that have become common in many companies. These include, reduced organization transparency, high audit costs, inefficient communication, redundant queries of risk and process owners, lack of automation, outmoded infrastructure and unstable control environments.

Acknowledging these elements as a status quo does come with a cost, since it can contribute to an inefficient and ineffective control structure.

However, the true cost of compliance comprises of three different elements:

1. The cost of efforts when referring to internal compliance that consist of particularly identifying functions that are embedded into the processes.

2. The cost of inadvertence throughout all levels of the organization.

3. And the cost of noncompliance, which includes loss of brand equity, loss or revenue, penalties fines and many others.

If the management would undertake a quality perspective on managing compliance with the same zeal it does with improving other core operating processes, cost could substantially be reduced in key area, since confidence is gained knowing that compliance risks are effectively being managed.

There are however, certain key elements of an effective and efficient compliance program that the board and executive management might want to consider such as:

Board Inadvertence

A positive understanding of over-sighting particular compliance programs and significant compliance risks by the board or by one of its member can help build an effective tone at the top of the hierarchy.

Executive Management Oversight

Management and coordination of the compliance program by an elected senior executive is crucial for an organization that consists of diverse and complex operations.

Reporting Mechanisms, Policies, Procedures and Standards

These particular elements need to be kept up-to-date and should be documented as well as should be communicated to employees throughout the organization.

Due Diligence and Risk Assessment Activities

The process of risk identification should integrate precise considerations of compliance risks. Appropriate subject oriented experts should be responsible for monitoring changes in the environment as well as identifying amendments required in certain compliance risk area(s), for which they are accountable.

In conclusion, companies need to make sure that their established procedures and policies offer a reasonable assurance that the organization is following the processes according to the laws and regulations and internal policies.

• The scope of this methodology will increase even more and will start supporting more regulatory requirements under the scrutiny of the government. These requirements are bound to grow in immense numbers, especially in businesses that belong to the financial and health-care industries. Any company that has limited resources will probably find it difficult to track legal and regulatory changes in requirements and then assess the impact of these modifications on the organization itself. Such a business would also have trouble updating their own registers. No matter what issues have to be faced, all these tasks will have to be accomplished, even though they do not directly result in increase in profits.

• For all those companies who follow the checklist approach towards compliance risks will have to change their methodologies because this method will become ineffective. This is because with the passage of time, the standards which are used for measuring compliance will modify from a one – model – fits – all structure to tailored models that are largely based on risks. What this implies is that assessments which are based on checklists will not be useful enough and can even harm businesses because they do not analyze risks effectively.

• Risk management will keep on developing as specialization, and companies will eagerly hire individuals who achiever this. Compliance risks will continue to occupy even greater portions in a company’s complete risk portfolio. As such, the need for individuals who have gained expertise in this will rise. True right now, risk management is not exactly recognized as a proper professional specialization, but as time changes, so will this in the long run.

• Compliance risk assessment activities will gradually become a continuous and dynamic process. As of now, companies perform these assessments on a yearly basis. After this, the compliance register is often thrown off in the shelves, only to be taken out in the subsequent year. However, now lawmaking is becoming more prominent and is accelerating at a rapid pace. As such, companies will need to reassess their compliance risks on a regular basis.

• Risk assessment will also start addressing third party risks so that they can be managed in a better way. Often, risk managers do not consider the regulatory and legal risks that are associated with vendors, suppliers, outsourced companies and the like. This approach often results in an error. Though in every business, all these outside agencies are an integral part, you cannot be sure if they will comply with the legal polices or not. As such until everyone follows the same methodologies, proper management cannot be achieved.

The concept of the Chinese Wall is incorporated in various environment situations, which includes journalism, law, network security, project management, software development, business, and the financial industry.

The term ‘Chinese Wall’ originated after the disastrous stock market crash in 1929, when the widely unregulated United States market suffered a 40% plunge between the months of September and October. According to a theory, the crash was a result of inflated stock values, which were created by insider trading and price manipulation. It was after the crash that Congress passed a law mandating separation of both investment and commercial banks, in an attempt to prevent a conflict of interest. Instead of enforcing corporate and physical separation, the law only stated that the policies need to be in place in order to create a logical partition between these divisions.

In theory, a Chinese Wall serves to restrict information flow to those individuals or groups who need it to perform their jobs. In practice, however, the Chinese Wall is highly dependable because it relies completely on the honor system. The information is restricted by the meticulousness and discretion of the parties involved. Regulations that identify the need for legal requirements for information security are incidentally more inclined towards improving compliance.

An example of the Chinese Wall is in software development, where the Chinese wall also referred to as the “clean room technique” is a reverse engineering approach by which programmers work on codes to separate groups. The first group will convert the program’s “machine code” into “source code” and then “document” the process, but will write no new code. The second group, however, will not be referring to the original code, but develops a new program based on the first group’s ‘documentation’.

The basic purpose of the exercise is to make sure that the new program’s code cannot be derived from the original program’s codes.

The Chinese Wall is typically an indication of the ‘Great Wall of China’, which had been built 2,000 years ago in order to protect its populace from invaders. However, there are other theories that exist such as in a Wikipedia entry, for instance, the author debates over the term being derived from a diplomatic machination during the Late Imperial Era in China, “…if a junior mandarin saw a senior mandarin on the road he was expected to bow and present his compliments. In Beijing this tended to happen quite a lot and so traffic was frequently blocked. Instead mandarins came up with a method of pretending they did not see each other on the road by the clever placing of a retainer with an umbrella. Because they did not “see” each other, they were not obliged to stop.”

Of course, online marketers who understand the Big Data are obviously going to build better customer experiences based on evidence and hard data, rather than making guesswork and hunches. Instead of working with crude analytics or on intuition, you might consider using definitive data to design product pages to attract best and potential customers directly towards your shopping cart. Plus, you’d know exactly when to introduce your special offers and promotions and you would even know what promotion would work best according to your customers profile. In addition, you could even optimize your online interface, that way you can make sure that everything from registration to search to placing orders would be completely frictionless.

However, getting to that point does require you to first acquire the data. It’s not a small feat to gather huge amounts of data from various sources. It’s even trickier to understand and translate that information into fuller shopping carts and visits.

The good news is, there are tools and technologies that allow you to find that gold at the end of the customer data rainbow and will allow you to use it by refining your online marketing strategies with precision. However, there’s a way of thinking concerning the collected data that involves shifts in culture, according to where your company stands right now.

So, here are a few steps to help you tame your big data:

Don’t Think Instantaneous, Focus on Continuous Iteration and Evolution
Yes, Big Data has the ability to fundamentally cause a shift in the way you do business, but don’t change everything at once. It’s actually far more productive to adopt the “test and learn” approach rather than the “hit and run” philosophy. A dozen incremental changes in the sites personalization, design or word can get you further than simply trying to “innovate” all at once.

The most successful online marketers are continuously refining and optimizing. They steadily move forwards, by taking over a thousand baby steps, finding improvements along the way.

Incorporate Big Data Goals With Your Own Individual Goals
You need to set up separate projects and initiatives for your business goals like increasing lifetime customer value, improve customer loyalty, increasing conversion rates or acquiring new customers. This approach makes it easier to determine the kind of data you need to obtain, and how you need to use it. Remember to make your team focus on one project objective at a time.

Internally Sell the Concept
In some organizations, shifting towards a more evidence-based, data driven marketing might require some extra communication, especially if you want everyone on the same ‘page’.

• Let everyone know what you know, encourage continual learning and knowledge sharing.
• Simplify everything by using graphs and pictures.
• Present the data and the outcomes in a way that’s easy to understand allowing managers to make more accurate decisions.
• Don’t Hide the end results, make sure you communicate achievements and plans across the organization.

Form One Big Family
You need to include Web developers, analytical gurus and marketing strategists as well as the creatives, who might feel a bit threatened when working with hard evidence. Then integrate those responsible for site optimizations and e-commerce.

And finally, you need to dedicate, obsessed and committed executive who will drive and combine the process and will also act as the focal point for future customer experience innovation.

Once, you do all of this, you can know for sure that your customers will always be coming back to fill their shopping cart.

If a conflict of interest results in financial or economical loss to the organization through waste, abuse or fraud, then criminal, civil and administrative remedies can be pursued as the situation or policy dictates.

What is Conflict of Interest?

Conflict of interest is usually described as any situation that would involve a person’s “self-dealing”, “non arms length relationships”, “serving two masters” or even “related party transactions” all of which could result in the gain or benefit for one party at the expense of another. A structured definition of the conflict of interest is:

• The convergence between an individual’s personal relationships/obligations/interests and his/her professional obligations towards the organization.

• So much so that an independent observer can rationally question the actions, outcomes and motives regarding the actions taken and decisions made by the particular individual, employee, director, officer as well as

• The individuals immediate family, third party or organization that might have a business association or interest where they might receive “things of value” as a result of the actions taken or decisions made by the particular individual whether they’re an employee, officer or even the director of the organization.

What Are “Things of Value”?

“Things of value” include various forms of financial benefits, such as commissions, salaries, raises, bonuses or even promotions that are not offered by the organization. It could even include receipts of automobiles and gifts of nominal values, there could be receipts of investments, annuities or even paid vacations. Payment of credit card bills, or any other forms of personal expenses, receipts for bonds, stocks, insurance policies which will be paid by the third party, a promise or offer of employment, realization of unfair competitive advantage, business profits or any other forms of compensation being provided by the organization to its employees, officer and directors.

Is Conflict of Interest a Crime?

In the U.S, conflict of interest generally is not considered as crime unless the individual with the “conflict” is actually a government employee or works with a government employee. However, if the conflicting interest of an employee, officer or director results in economic or fiscal loss or loss of competitive advantage of the organization then an intentional act of abuse or fraud which involves bribery or receiving rewards can be considered as a crime punishable by law.

Common Examples of Conflict of Interest

The following are considered to be the most common examples concerning conflict of interest:

Administrative Funding/Decisions:

An employee or officer hires a consultant who is related to them without getting any approval by the organization.

Business/Consulting Interests:

An employee, officer or director makes referrals to a business venture in which that particular individual, a member of his family or an associated entity, has some financial interest.

Use of Services, Materials and Equipment:

An employee or officer uses the organization’s resources and facilities for external business activities or private consulting.

According to the survey conducted by fraud experts from the Associate of Certified Fraud Examiners (ACFE), companies that believe they’re taking all of the necessary precautions to prevent fraudsters from wrecking havoc can also become victims.

To help businesses protect themselves, here are a few tips you should follow in order to protect yourself against fraud attacks.

Make Sure You Do Background Checks

Make sure you research and verify each of your employee’s backgrounds. The US Chamber of Commerce has estimated that employee theft can cost an organization over $40 billion per year. This value is 10x times greater than the value of street crimes in the US.

Verify Creditworthiness

Your customers come second to your employees, especially to the importance of your business. However, any kind of organization is susceptible to customer fraud, whether they’re from return frauds, stolen credit cards and bad checks. Organizations that conduct customer credits checks will always avoid any form of lost revenue.

Tighten Security

Organizations need to incorporate the use of physical internal and external security in the form of personnel, cameras and locks. One of the easiest ways to commit fraud is to obtain access to personal business files and leave with the material.

According to the Javelin 2013 Identity Fraud Industry Report, 2012 itself had seen over one million fraud incidents costing around $21 billion.

Passwords Should Be Changed Frequently

This is an essential ‘must do’ strategy; employees are simply required to change their passwords frequently in order to protect confidential information from leaking out. In accordance to the 2011, Cost of a Data Breach Study: United States, in 2012 alone, the cost per company on reported breaches amounted to $5.5 million

Use a Tip Line

Most fraud incidents are identified by whistle blowers in the company. An organization needs to either set up a text number, website, email address or phone number, ensuring the provider with complete security, if they identify any form of fraud incidents. The Associate of Certified Fraud Examiners (ACFE) said that most frauds are identified through whistle blower and tipsters from within the organization.

Always Be Prepared

Form a knowledge based team who will be ready to aggressively investigate, address and correct any issues, irregularities and concerns in the organization. In order to perform such a task, the individuals in the team need to have strong working knowledge of the company’s policies. The team needs to be capable enough to handle various incidents that may arise, through snail mail, social media phone, email or fax.

A dynamic and flexible case management system that is capable of assembling pieces from various sources is highly crucial. Technology offers access to various pieces, no matter where they’re hiding, and knowing when the incident occurred is important too. Today, smart phones and tablets are the perfect tools for the knowledge worker and the success of your business relies heavily on the support of these devices.

The agenda of the meeting is to discuss a reduction in bond buying later in the year, which has sparked a selloff not only in local, but global markets as well. This week it has bruised not only emerging market assets, bonds, stocks, but has also battered the dollar.

The U.S. currency continued to be sluggish against both the euro and the yen on Friday, but had gained a footing against the Japanese unit, which was around 95 yen, but was at an all time 2 month low at 93.75 the previous day.

With the unexpected U.S. retail sales data rising overnight, and with the impact of selloffs on riskier assets beginning to settle, the market noticed some degree of relief. In fact, the European stocks rose to 0.3% as they followed a rebound from the Asian shares.

The markets have been panicky because of the idea that the Federal Reserve could start pulling in its support, which has been known to increase asset prices over the past 4 years. However, Philippe Gijsels, who is head of research at BNP Paribas Fortis Global Markets, said that growth seemed a bit patchy; he wasn’t expecting the Fed to move till the end of the year.

“If you have easy monetary policy and improving economic conditions, which will also help companies to produce good earnings, … then you have a lot of the building blocks in place (to drive stock market gains),” he added.

Most of the major stock markets including the MSCI’s world index have substantially fallen for 4 straight weeks now; along with Europe right on course with a drop of 1.5% this week, Japan’s Nikkei is still trying to recover from its losses of a 15% fumble since mid-May, despite rising 2% on Friday.

The Japanese stock market has been on a constant roller coaster ride; being hurt by the stimulus has caused worries that have unveiled the government’s pro-growth package.

Peripheral Image

In Europe’s own debt market, the southern euro zone bonds in particular were back on top after a turbulent session, which includes the German bonds that rose up 43 ticks adding to this week’s gain. Standard and Poor’s rating agency helped the euro zone margin by keeping Spain’s debt over the ‘junk’ status, even though it does leave the country at a risk of being downgraded since it will be maintaining a negative position on the bonds.

Commodities, including metals have been avoided because of the striking swings seen by currencies and equities this week. However, they too were affected by the stimulus concern by the Feds.

Copper had edged itself up to $7,094 a ton, after recovering from a six week low drop on Thursday, while precious metals such as platinum and gold lingered on their recent lows.

Brent Crude rose up to $105 a barrel for the first time in recent months, even though analysts had suggested that the volatile dollar would have its impact.

According to Ric Spooner, Chief market analyst at CMC Markets, “The key driver of oil has been the weakness in the dollar rather than any fundamental factors,” he further went on to say that, “Traders are wary about pushing things higher because they are confronted with a situation of plenty of supplies when seasonal demand is supposed to pick up”.

An appraisal of the brand and loyalty marketing emails received by many reveals that only a few of them mention any form of relationship that had existed between the user and the company, whether it’s an address or a past buying behavior. This is a serious oversight made by many companies, since research has shown that if companies provide customers with relevant personal information, they’re much more likely to buy something from them.

In fact, the unfulfilled promise of using big data was even presented during the DM News Roundtable. Although, there were a small number of people on the panel who had paid to combine, “research, analytics, and transaction data… in the hope of creating a more tailored form of communication”. The conversation between the panel members was simply all talk and no work.

However, there was one statement that took place on the roundtable that was true, and it simply sums up the current situation of the big data. The statement came from the straight shooter IIana Rabinowitz, the CMO at Lion Brand Yarns, who said, “I think that for most small and midsize companies Big Data is irrelevant. It’s like the Wild, Wild West of information. You can’t use it, you don’t have people who can analyze it, and if it’s there, you don’t know how to get to it.”

It may seem like a derogatory statement, but it’s true nonetheless. Plus there were concerns with big data extending into the loyalty marketing business also. In a recent report by Retail Wire a question had been raised that: “Why Aren’t More Companies Connecting Big Data Dots for Loyalty Programs?” the online publicist referred to the lack of effort by marketers, and concluded that, ““While most respondents feel the need to engage customers based on their needs and expectations, they’re not leveraging the data in a way that maximizes the potential loyalty offered by customers.”

We can try to explain it a bit simpler using a football analogy. Simply big data feels like a potential superstar player who came from the first draft pick, but still hasn’t proven himself while he’s on the field. Plus, the coach isn’t really sure on how or when to use him. So, for the time being, he’s confined to the bench; he may get a chance to play in the future, but it’s anyone’s call when he gets to play.

Since, it appears that most marketers haven’t quite understood how to use the big data, it’s perhaps time to go old-school. Again quoting Ernan Roman, “Customers, both B2B and B2C, are sophisticated enough to recognize that to receive increasingly relevant offers, they must share detailed preference information.”

So, if you’re not capable of leveraging big data, the next best way to collect ‘customer preferences data’ is by sending out surveys, both online and offline. With this approach, you create a form of communication between yourself and the customer, offering them personalized communication, featuring services, products as well as benefits that could interest your customers.

It was written by Viktor Mayer-Schoenberger who’s a professor of Internet Governance and Regulations at Oxford Internet Institute and Data Editor of the Economist, Kenneth Cukier.

What’s so ingenious about the piece is that it puts Big Data into a much larger context, as if you would be dipping back in time to the 3rd Century BC, where the sum of all human knowledge existed only in the Library of Alexandria, which would be about an estimate of 1,200 exabytes. However, by doing so Mayer-Schoenberger and Cukier have changed how we perceive Big Data. According to them, Big Data changes the playing field not just for technology, but for all data types and our understanding of them.

In their piece, both Cukier and Mayer-Scheonberger have identified three ways Big Data will change our understanding of data:

Sampling from Some To All

Before the inception of Big Data, the only way to truly understand human behavior was based on sampling of specific segmented group. Now, with Big Data, the size of the sample is much larger. In fact, we can even go as far as saying “all”.

“Big data is a matter not just of creating somewhat larger samples but of harnessing as much of the existing data as possible about what is being studied,” the authors write. “We still need statistics; we just no longer need to rely on small samples.”

Moving From Organized To Clutter

Data Management experts will spend most of their time discussing the importance of data governance and data quality. There have been discussions on how these disciplines could be incorporated in the use of Big Data; that way you can make informed decisions.

The problem, however, lies in the fact that you’re talking about data that’s not under your control nor is it under an easy governance program, but when you’re dealing with larger data sets that’s generally not the problem. The only reason you believe in it is that statisticians will tell you that, but you need to remember that when you’re talking about the quality of the data set, you might encounter such problems with Big Data.

The article cleared all that up by describing the history of computer aided language translation. For instance, in the 1990’s IBM made an attempt to create a translation machine that used masks, perfect translation of parliamentary transcripts and probability. It wasn’t really appreciated, nor was it that great.

Moving forward to today, what do you look for when you want on the spot translation? You look for Google. The company has accomplished something quite astounding; they’ve used “messy” data from the internet which includes billions of translations from all over the web, resulting in a translation of over 65 languages.

“Large amounts of messy data trumped small amounts of cleaner data,” the authors write.

Its one thing to know, it’s another to actually grasp the idea of understanding data sets and moving forward with Big Data and according to the writers it’s the reason for the third shift of how we comprehend data sets, which is our focus on correlations, instead of causations.

Trying to put together a business case that requires financial investment in today’s environment can be a daunting task. So things are definitely much tighter. However, most organizations still realize that if they stop investing in new processes, projects and personnel altogether it would be a really big mistake. It just means that in today’s day and age, senior managers need to have greater evidence and confidence about how new investments in technology and systems can improve the organization overall.

Investing in risk management software is simply no different. So, let’s take a look at the few benefits that organizations can receive if they decide to invest in risk management software.

Seizing Opportunities

Through the process of risk analysis opportunities can be seized and recognized. However, the problem faced by many organizations without a dedicated risk management software system is that they do more than capture easily identifiable, historic and obvious risks with no consideration to their relevance. This reactive approach to risk management systems can help organizations “tick boxes” as well as comply with standards, but it adds very little value to the organization itself.

Risk management has actually become a necessity for corporate governance, so why not focus on it completely? Taking a more proactive stance like implementing a fully functional risk management software and embedding clear strategies would allow an organization to relate risks according to departments, objectives, and even a simple search could identify opportunities and threats much more efficiently and quickly.

Enhancing Project Risk Management

Trying to achieve your project objective in a timely manner and within budget is not easy, thus risk management is important for project managers to ensure the best possible outcomes. By using risk management software, project managers can actually delegate ownership of control and risk measures to relevant departments and personnel, making sure that they are kept up to date through the generation of automatic reminders.

A dedicated software system ensures that the projects risks are all identified, managed and that accountability has been well defined. It even prevents issues such as “fire fighting” which are failures that should have been prevented.

Consistency and Communication

Communication is very essential for risk management, but with large and global scale projects it can be quite difficult. And as a result consistency can be lost if departments decide to hold their own risk registers and employees who could benefit from access to these risk registers do not have access to it.

The risk management software needs to be flexible. Employees can be given access to single and multiple departments or even the entire organization, which would allow simple assessment ensuring that there’s a uniform approach when it comes to maintaining risk.

Clear Strategy for Risk Based Audits

Risk based auditing is actually becoming an increasing practice. Many organizations have been experiencing significant advantages when it comes to viewing business processes in a risk environment, since risks are often the root cause for financial surprises. This does not just apply to financial audits, but audits covering operations, reputations and various other aspects are all included.

Organizations that manage their risk through spreadsheets often find it difficult to manage version control, especially if multiple users access the document and edit it. Having a highly dedicated risk management software that records a full history and audit trail can make the entire audit process much more effective and easier.