In 2015, after taking over the mantle of the Nigerian Presidency having won an election based on driving change and fighting corruption, President Muhammadu Buhari visited the United States and met with Nigerians in Washington DC.
A weary Buhari noted, “When you fight corruption, corruption fights back.” Buhari’s story is the tale of every self-proclaimed corruption fighter. A quick realization that corrupt systems are good at hiding the mechanisms through which money moves from its intended purposes into the coffers of those who will fight back.
In my 37 year experience working as an accountant and auditor in the United States, I know that there are now reliable tools for tracking corruption. Gone are the days when we had to go through mountains of documents to navigate the maze of corruption.
Thirty years ago, one could have an excuse for delays and inaccuracies. Not anymore. Commendable as our anti-corruption campaign is, what we need to do in Nigeria is employ the modern tools available in the market to do a thorough job, thereby making corruption and its associated handmaidens of money-laundering and economic distress things of the past. The world now relies on Artificial Intelligence (AI) and Data Analytics to make corruption unattractive.
As Nigeria and other parts of the African continent continue the journey to more transparent economies, they must embrace the use of data analytics and artificial intelligence (AI) in their war against corruption. Here are four ways in which AI and Data Analytics can help in the corruption fight.
Analytics enabled Audits
Instead of relying on the traditional process for internal audits that are proven not to work in many countries, data analytics-enabled auditing involves analyzing data to identify areas and trends that require further investigation. For example, traditional audits may require looking at transaction receipts for evidence of payment. Data analytics audit will review the detailed bank transfer data or data that feed the payment systems. The result is higher quality audit evidence as data analytics allows the auditor to review more data than they could have with sampling.
Predictive Models for Fraud Detection
Using AI, just in time, fraud detection models that leverage specific data signals can identify potentially fraudulent transactions. When potential fraud is detected, for example, withdrawal of vast sums of money, escalation signals are sent to investigative groups. For years, fraud examiners have used predictive models to detect suspicious activity and predict fraud in many sectors of the financial services industry.
Profiling – Creating profiles of bad actors enables for better monitoring.
Data is used to create and analyze patterns of customer purchasing behaviour. The same methodology can be used to develop risk profiles of bad actors, high-risk companies, fraud, and risk events. A library of risk profiles enables you to proactively conduct risk assessments and build in monitoring to mitigate potential fraud risk.
We are all familiar with the project that cost one hundred times the expected price. Benchmarking project pricing against a database of comparable projects across the world can detect fraudulent patterns in billing, payments, and project materials delivery. Data Analytics will allow you, not just to compare total project cost, it will also allow for much granular comparison of underlying unit cost details so you can identify illegal inflationary pricing.
During that summer of his first term, President Buhari had quickly come to realize, as he stated in Washington DC, “Corruption has become part of our culture.” Now in his second term, President Buhari has made some progress on his fight against corruption. However, corruption continues to fight back. If he is to win this fight before the end of this term, he will need to add new weapons to his arsenal — Data Analytics and Artificial Intelligence. Fighting corruption, important as it is, affects every aspect of life in every sector of our society — finance, health, aviation etc. Stealing of public funds and its associated vices usually create deficiencies in the budget to run the affairs of the state, since the funds are usually pocketed by individuals. It requires proactive engagement and willingness of the authorities charged with the responsibilities of fighting the corruption
If corruption is not brought down to a minimum, corruption will consume all of us. A word of caution, though, for our foot-soldiers in the anti-corruption war lest they become infected by the disease they’re trying to eradicate. `The philosopher, Friedrich Nietzsche warns, “Whoever fights monsters should see to it that in the process he does not become a monster. And if you gaze long enough into an abyss, the abyss will gaze back into you”.
–Ekwensi is former chief risk and compliance officer, AMCON.