Intensifying regulatory pressures are top of mind for business leaders, with 78% expressing increasing concern about data protection and data privacy compliance.
This is according to the third biennial EY Global Forensic Data Analytics Survey, which examined the responses of 745 executives from 19 countries, including 40 from South Africa and analysed the legal, compliance and fraud risks global companies face and the use of forensic data analytics (FDA) to manage them.
With less than four months to go until the General Data Protection Regulation (GDPR) comes into force on 25 May 2018, only 33% of respondents state that they have a plan in place to comply with the EU legislation.
While the average response of those in Europe was more positive, with 60% indicating they have a compliance plan in place, there is still much more work to be done in other markets where significantly fewer companies indicated readiness for GDPR compliance including Africa and the Middle East (27%), the Americas (13%) and Asia-Pacific (12%).
In South Africa, 40% of the respondents say they are not familiar with GDPR, 35% have a plan they are currently working on towards complying with GDPR, while 18% have not heard of the regulation and 8% are studying the GDPR and its scope.
Sharon van Rooyen, Africa leader for fraud investigation and dispute services at EY, says: “There has been unprecedented development of data protection and data privacy around the world, which can create serious challenges for companies and regulations such as the GDPR, are in response to these challenges. In South Africa the soon to be enacted Protection of Personal Information Act (POPIA), is one such example.
“However, businesses that make use of FDA technologies to manage legal, compliance and fraud risks, will be better able to mitigate risks, while increasing business transparency.”
According to the report, respondents expressed a strong belief in the value of FDA and its benefits for an organisation’s governance programme, which is evidenced by a 51% increase in average annual spend per respondent compared with 2016. Companies have significantly developed beyond relying on the basic FDA tools of the last decade, with 14% of respondents stating that they are already using robotic process automation (RPA) to manage legal, compliance and fraud risks, and a further 39% stating they are likely to adopt RPA within the next 12 months, followed by artificial intelligence (AI) at 38%.
In South Africa, the adoption rate of FDA techniques is higher than the global average of 70%. This is specifically in behavioural analytics, which is 78%, compared to the global 55%, the adoption of social media analytics is 76%, against the 56% global figure, while AI adoption is 58% and only 38% for the global respondents.
The survey found that 42% of businesses believe that data protection and data privacy regulations have a significant impact on the design or use of FDA. The survey further revealed that 13% of respondents indicated that they currently use FDA to achieve GDPR compliance, with more than half (52%) of the respondents indicating that they are currently in the process of analysing exactly which FDA tools they would use to assist them with achieving compliance.
Of the South African respondents, 59% have data monitoring and reporting tools in place that allow them to be in compliance with the GDPR, 29% are currently not using any FDA techniques to support the GDPR and 12% are in the process of analysing what FDA tools can assist in achieving compliance.
Overall, the report highlights how increased adoption of, and spending on advanced FDA technologies, needs to be matched with greater investment in skilled resources. Of the respondents surveyed, only 13% feel that their organisation has the right technical skills in FDA, and only 12% believe they have the right data analytics/data science skills.
In terms of technical skills, 20% of South Africa’s respondents believe that they currently have the required skill sets and 18% believe that they have the right data analytics/data science skills.
“FDA has a vital role to play in regulatory compliance, data protection and data privacy. It is important that businesses understand its value and how it can mitigate risks and increase business, transparency. To achieve the full potential of FDA, companies should aim for better integration; leverage the right technologies, data and people; and secure strong leadership support,” says Lance Poon, Africa director for forensic technology and discovery services at EY.