Ounce of prevention, Compliance


Compliance Analytics

Ounce of prevention

A new approach to predictive analytics can more effectively help organizations foresee likely avenues of disruption and focus efforts to head them off with positive steps.


Who on your team is following all the rules today, but has a latent propensity to bend them tomorrow? To mis-serve a customer, take undue advantage, or precipitate poor morale? Or, who has already started down that slippery slope, but has been working undetected?

What if the answers were lying unseen in front of you–in the patterns that emerge when scores of otherwise innocuous data points come together? What if inappropriate behavior, or worse, had a “DNA” whose markers were ripe for detection?

The answer is more than academic. It may spell the difference between prevention and remedy–between setting an employee on a better path today or having to dismiss that same employee tomorrow amid loss and scandal with potentially damaging effects to your brand, reputation, and market capital.

There are few organizations that remain to be convinced of the value of analytics. The use of new tools to extract useful insights from big data has helped transform financial modeling, marketing, and other critical functions. And in industries that face complex regulatory requirements, analytics has made inroads within the compliance function as well.

Compliance is about more than monitoring adherence to rules and regulations outside the organization. True compliance starts on the inside–with the attitudes and actions of the people who conduct business every day and those who supervise and manage them. The risk inherent in giving employees decision-making autonomy is inseparable from the performance the company demands from them.

Because stamping out that risk would hobble performance, companies must recognize and manage it instead. An organization with a strong ethical culture with leadership from the top may still be drifting if employees in the middle do not align with the organization cultural values.

Looking ahead by looking inside

Now, a new approach to predictive analytics can more effectively direct the compliance spotlight inward. It can help foresee likely avenues of disruption and focus efforts to head them off with positive steps. But to benefit from this new approach, organizations first need to be open to the possibility. They need to be willing to embrace the positive and appropriate opportunities inherent in a practice that might strike some people, at first blush, as a big brother-style overreach.

Many organizations are already looking at ways to implement a targeted, risk-based approach to identify behavioral indicators among their employees that create a propensity for ethical misconduct–and to identify individuals or groups who could ultimately harm an organization’s culture or cause severe reputational risk.

Having the ability to predict risks or negative events could save millions of dollars in regulatory and civil penalties, protect the brand image, prevent operational and strategic disruptions, stem financial losses, or simply improve culture. Predictive analytics can help enhance an organization’s ability to keep valuable employees in the fold for the long term.

For many organizations, evaluating employees this way will require an enhanced reliance on existing data-gathering systems and analytical tools. For some, it will require the development of new capabilities.

Back to top

“Philosophically, risk assessments are not designed to see what’s coming around the corner. You’re definitionally looking backwards.”
— A financial services industry chief compliance officer

Get in touch

Elia Alonso
Principal | Deloitte Risk and Financial Advisory
Deloitte & Touche LLP

John Lucker
Principal | Deloitte Risk and Financial Advisory
Deloitte & Touche LLP

Ana Valentin
Senior Manager | Deloitte Risk and Financial Advisory
Deloitte & Touche LLP


Back to top

Did you find this useful?