The Red Flag Group®
hotline programme

Why app-based misconduct reporting solutions work better than traditional landline hotlines

Why app-based misconduct reporting solutions work better than traditional landline hotlines

The last three years have seen a surge in the number of well-known companies being fined heavy penalties for failing to act on reports of misconduct within their organisation. Even for corporations that have FCPA-approved compliance programmes or have engaged the ‘big four’ for their auditing and accounting services, the task of closely monitoring illicit conduct in their organisations appears to be a huge hurdle as fines continue to double in amount year on year.

For companies with a presence in the United States this is a big concern because, even with the proliferation of anti-bribery and anti-corruption compliance solutions readily available on the market today, companies still fall prey to the Department of Justice and Securities and Exchange Commission for Foreign Corrupt Practices Act–related violations.

Many companies have been fined a fortune for simply not acting on reports placed by tipsters on their ethics lines. Failing to follow up on the smallest reports of misconduct has ruined the reputations of several major global brands.

So, what exactly is happening?

Studies and past examples have shown that tipsters are generally discouraged from reporting illegal activities because they feel insecure. Even in companies with well-established cultures of ethics, whistleblowers are afraid to report for fear of retribution. And the chance of them reporting is even less if the reporting system involves talking to another human being.

However, if the reporting system makes them feel secure and anonymity is guaranteed, whistleblowers are highly likely to report.

This is where artificial intelligence (AI) comes in. With AI getting integrated in our daily lives, coupled with ever-developing handheld technologies, there has been an explosion of mobile apps, tools, systems, products and solutions that are using the power of AI to enhance the way we do things.

For example, medical centres in developing countries are using AI-powered apps to assess patients’ conditions to help them prescribe the right treatment. It has been found that patients generally feel uncomfortable speaking to a physician through a telephone helpline, especially when the ailment is of a private nature. This has led to more medical centres deploying app-based helplines manned by conversational chatbots that can sustain a conversation like a human being would.

The future of misconduct reporting

App-based hotlines or helplines can be more reliable and user-friendly than those serviced by human beings. For the compliance industry, this provides an exciting opportunity to maximise security, anonymity and confidence among potential whistleblowers by changing the way misconduct reports are received and managed. Now is the time for the entire industry to ditch human-serviced telephony ethics lines and move to app-based ethics hotlines manned by chatbots.

Picture this: your junior accounting executive has discovered several irregular pay-outs to a local government official in a high-risk country who has been helping your company obtain governmental contracts. However, the junior executive is unlikely to report this irregularity to the chief compliance officer because she is scared that she may be dismissed. Imagine how much more likely she would be to make the report if she could download a free app on her smartphone and make the report from the comfort of her home, without ever having to talk to anyone in the company?