Compliance and procurement professionals’ confidence in decline as environmental, regulation and fraud concerns begin to escalate
Dun & Bradstreet’s 2019 Compliance and Procurement Sentiment Report finds that confidence around the effectiveness to prevent fraud, manage regulation and Brexit-related change and identify environmental, social and governance concerns has fallen.
The findings show that confidence in the current effectiveness of compliance and procurement decision-makers is down 7% since June 2018. The future effectiveness of compliance and procurement functions has also decreased by 4% to 87%.
Although compliance and procurement professionals are generally positive about the effectiveness of business functions, 53% say that existing regulations have increased the risk to their business in the last three months. Retail and Government sector business leaders display the biggest decrease in confidence overall.
The benchmark report uncovers and tracks areas of short-term and long-term success and concerns for compliance and procurement professionals.
Environmental, social and governance (ESG) Concerns for ESG rose dramatically, with more than 43% confirming it’s difficult to identify ESG within customer due diligence processes. Professionals are struggling to identify, account for and monitor the issue within third party risk management programmes
Supplier risk management and compliance converge There’s an ongoing convergence of the two departments, which 13% of professionals feel would have a ‘negative’ or ‘very negative’ outcome on the business. Half (50%) say it will have a ‘very’ or ‘fairly positive’ impact. While it’s unclear if the two functional groups will actually merge, the findings demonstrate a lack of clarity in business
Corporations continue to experience fraud The ability to detect and respond to fraud is a challenge that procurement and compliance professionals around the world need to solve. Managing supplier, customer and third party relationships is gaining complexity and fraud is therefore harder to detect. 56% of respondents said that technology and policy are the top contributing factors to fraud
Impact of regulations and Brexit Just under half (44%, in fact) of respondents believe that regulations are a barrier to doing their job effectively. In addition, a third say that Brexit is a liability to their business. Respondents believe that treating the European Union as a separate country will add to the complexity of customer due diligence
Commenting on the findings, Brian Alster (global head of supply and compliance at Dun & Bradstreet) said: “The report has shed light on the increasing pressures that today’s professionals are under to maintain compliance in an ever-changing economic, business and political environment. Gaining full insight and transparency into all third party relationships, suppliers, customers and vendors is critical to managing risk for both compliance and procurement officers. Fraudulent activity and Brexit-related regulatory change are complex issues, but by knowing the processes needed within each department, businesses can successfully ensure that today’s requirements are being met, while also planning for the future.”