Using data analytics for FCPA and anti-corruption compliance, with Parth Chanda, CEO of Lextegrity

Episode Summary

​​In this episode of Signals, Nick Mazing sits down with Parth Chanda from Lextegrity. They dive deep into data and its role in preventing corruption in global organizations. Experts estimate that 5% of an organization's revenue is lost to fraud and corruption. Data, as they discuss, is a powerful tool to combat this.

The conversation then shifts to the Foreign Corrupt Practices Act (FCPA), a fundamental US law prohibiting transnational corruption. Its enforcement has far-reaching implications, affecting US-based companies and those interacting with US capital markets.

With his rich experience as a white-collar defense attorney, Parth Chanda brings unique insights into FCPA-related laws. His expertise adds depth to the discussion, making this episode a must-listen for anyone interested in data, corruption, and the law.

Guest-at-a-Glance

💡 Name: Parth Chanda

💡What he does: Founder and CEO 

💡Company: Lextegrity

💡Noteworthy: Parth is a lawyer by training with 20 years of experience in compliance work, particularly related to the FCPA and anti-corruption. He has a rich background, starting as an intern at the World Bank, becoming a white-collar litigator, and later an in-house anti-corruption lawyer at large global companies. Now, he leads Lextegrity, a compliance data analytics and workflow platform that helps international organizations prevent and detect corruption and fraud.

💡 Where to find Parth: LinkedIn

Key Insights

Harnessing Data Analytics for Effective Compliance

Parth emphasizes data analytics to ensure effective compliance. He differentiates between traditional metrics and the insights that can be drawn from deep financial data. For example, organizations can prioritize high-risk transactions for review by risk-scoring every transactional line item in real time. Such an approach reduces false positives and provides a multi-dimensional view of every transaction. Notably, the components of the risk algorithm should be customizable to cater to each organization's unique risks and historical patterns.

The Changing Landscape of Anti-Corruption Measures

The podcast highlights the evolution of anti-corruption measures over the past two decades. Parth Chanda points out that 20 years ago, organizations could deduct bribe payments on their taxes in many countries. Today, the focus on governance has increased significantly, and the traditional approach of process checks and balances, while necessary, is not sufficient. The challenge lies in identifying the small percentage of employees who may bypass the process or collude with vendors, making data analytics a crucial tool in modern compliance programs.

Data-Driven Compliance: The Future of Anti-Corruption Efforts

Parth predicts a more data-driven future for compliance. Traditional approaches may not provide sufficient comfort to leaders about the effectiveness of their compliance programs. However, data-driven strategies, which involve comprehensive testing of all transactions, can provide more objective comfort about the level of compliance or non-compliance in an organization. The shift towards data-driven compliance is good news for leaders, as it promises more effective anti-corruption efforts.