A new resource created by Australian tech leaders has set out to address the problem of sexism and discrimination in the Australian tech and investment industry.

Within the resource, “Addressing Sexism in Australian Tech & Investment“, solutions for bullying, harassment, abuse and assault are all suggested. It also explains why companies and individuals can struggle to speak out against the issues. This is in addition to the cost of inaction, and the characteristics of the technology industry that can make it particularly susceptible to sexism.

Its creation was spearheaded by Human VC founder, Elaine Stead, and supported by climate, tech, and finance PR agency Third Hemisphere. The intention is for the resource to be a ‘living’ document that will be added to as new approaches and solutions are offered up by additional sector leaders.

The resource contains a compilation of industry codes of conduct, methods of reporting, and enforcement measures from prominent groups and individuals such as Blackbird, the Australian Investment Council, Southern Angels, and ANDHealth operations director, Jenna Polson.

Work is not done yet

Stead is now calling for any diversity, equity, and inclusion (DEI) specialists, more Australian VCs, and other tech sector leaders, to contribute their expertise to the resource in a bid to achieve group momentum and critical mass in tackling the issue as an industry.

Elaine Stead, founder of Human VC, said: “When we put out a public request for input to this industry-wide resource, many people proactively asked ‘how can we help?’. Yet in the ensuing forty-plus conversations we had, it became clear that many tech sector leaders had no idea how to address the problem, and weren’t aware that they were contributing to the issues themselves in various ways.

“Many companies were also notably small with limited resources, time, and training to deal with the issues, even if they had the best of intentions. So we wanted to lower the barriers to entry for avoiding and addressing poor behaviour, by making a one-stop-shop of pre-existing resources available to any interested party, free of charge.”

Hannah Moreno, founder and managing director of Third Hemisphere, said: “I applaud every individual and organisation who contributed their time and expertise to this resource, and to the many conversations that informed its contents. An industry-wide problem needs an industry-wide approach to finding a solution. It also shouldn’t fall solely to victims to solve an issue they didn’t create.

“We will continue to see an escalation of very public action on sexism in this, and many other, industries moving forward. Getting on the front foot and joining this movement is not just the right thing to do: it is the best way for companies and individuals to avoid being penalised by the public, media, and capital markets.”

The global risk landscape has never been more complex. With the war in Ukraine triggering a wave of sanctions against Russia, sanctions activity reached record heights in the first half of 2022 – the importance of proactive risk management cannot be overstated.

With over two decades of experience in financial services, Dalbir Sahota, a seasoned executive, leads product management transformation at LexisNexis® Risk Solutions. In this article, he delves into the mounting challenges posed by a shifting sanctions landscape on payment processes.

Lists maintained by the four key regulators – the United Nations (UN), European Union (EU), Office of Foreign Assets Control (OFAC), and the Office of Financial Sanctions Implementation (OFSI – UK) changed constantly, with entities added, deleted and modified at an unprecedented pace.

Although the number of updates for the first half of 2023 is down by 31 per cent, sanctions activity remains at historical highs, and is likely to continue for the foreseeable future.

All this activity puts pressure on firms to find new and better ways to safeguard the payment process. Banks and other organisations conduct sanctions screening to comply with anti-money laundering/countering the financing of terrorism (AML/CFT) regulations. While sanctions change constantly, the regulatory requirement to screen for sanctions remains steadfast. Doing business with a sanctioned bank or other sanctioned entity puts every participant in the payments chain at risk.

Automation that identifies sanctions early saves time and improves customer experience

Keeping pace with ongoing changes to sanctions lists is a considerable challenge for all organisations, but the cost of non-compliance is steep. Globally, sanctions violations and anti-money laundering and know your customer (KYC) compliance issues cost financial institutions nearly $5billion in 2022, according to the Financial Times. That’s a 50 per cent increase over the previous year.

Although the initial sting of a fine or financial penalty for non-compliance may be painful – and trigger increased regulatory scrutiny and onerous ongoing audits – the reputational damage caused by such a lapse can be even more detrimental and long-lasting. Screening for sanctions early in the payments process provides an important layer of defense that strengthens compliance, saves time, and reduces friction for the customer. 

Greater control through early identification

 To keep pace with changing sanctions, ensure compliance, and prevent payment delays, organisations should consider technology that provides greater control over sanctions screening earlier in the payment process.

Several technology solutions are available to instantly validate customer-entered account details to ensure payments are routed to the correct account holder. They typically alert the payer in the event of an error, so changes can be made before the payment is sent to the bank. However, these systems do not check for sanctioned banks.

Screening for sanctioned banks before initiating payment to the payee offers numerous benefits to all participants in the payments chain. In addition to reducing repairs and costly failed payments, saving time, and improving straight-through processing rates; early sanctions screening provides a smoother customer experience with fewer processing delays. Most importantly, early screening delivers an additional layer of security that strengthens compliance. When combined with accurate, up-to-date data, early screening also enables organisations to automate payments with confidence.

Everyone benefits from early sanctions screening

 At most organisations, the payments process from sender (‘payer’) to recipient (‘payee’) leaves the sanctions ‘door’ constantly open, exposing banks, payment service providers (PSPs) and businesses to risk when sending or receiving payments.

Typically, the payer organisation checks customer-entered information against payments data requirements (e.g., bank name, IBAN number) and corrects errors before the payment is initiated. Screening for sanctions occurs later in the payments process – after the validated payment is sent to the bank. If the bank then identifies a sanctioned entity, the payment cannot be executed and is returned to the payer for further action, slowing the payments process. By contrast, the new technology identifies the sanctioned entity before the payment leaves the payer, saving time and expense.

This improved process benefits all participants in the payments chain:

• Banks can offer improved customer/remitter experience by incorporating sanctioned bank warnings into payments channels, such as mobile banking. In addition, earlier detection reduces the burden on operations professionals who would otherwise need to remediate alerts and manage customer frustration when funds sent to sanctioned banks are quarantined.
• PSPs can avoid returned payments by warning customers in real time that the bank they plan to send money to is sanctioned.
• Corporates can perform real-time screening before sending payment instructions, which reduces the likelihood of blocked payments and subsequent costly operational corrections.

How costly are failed or stopped payments? In 2020, an estimated $118.5 billion was lost to failed payments globally. But it is not just lost revenue that is concerning, failed payments negatively impact the customer experience and can threaten the entire relationship. With more than 70 per cent of organisations indicating that they are not satisfied with their payment failure rate, it not surprising that reducing failed payments and boosting straight-through processing are a high priority.

Leveraging technology

LexisNexis® Bankers Almanac® Validate has recently added sanctions screening to its arsenal. In addition to instantly verifying domestic and international payment information and driving automation wherever it is needed in the payments flow, organisations can now also see if the bank to be paid is sanctioned – empowering organisations and their customers to cease payment at the point of initiation.

With data updated daily from OFAC, EU and UN sanctions lists, organisations can reliably increase compliance posture in a way that complements existing financial crime compliance controls and improves customer experience.

Looking toward the future

The brisk sanctions activity these past 18 months may very well be the new normal. Taking steps now to ensure payment systems and processes can meet the demands of this challenging landscape with its changing political pressures and increasingly complex regulatory environment makes smart business sense.

Screening solutions that enable organisations to instantly check for sanctioned banks before initiating payment to the payee offer an early line of defence to preemptively identify sanctions risk in the payments flow, all while improving customer experience.

 

Adobe, IBM, Nvidia and five other companies have endorsed U.S. President Joe Biden’s voluntary artificial intelligence (AI) commitments, including watermarking AI-generated content. 

This announcement was made by the White House on Tuesday, Sept 12. The White House Chief of Staff, Jeff Zients, emphasized the urgency of leveraging AI’s advantages, mitigating its risks and rapid action, stating, “We’re collaborating with the private sector and utilizing every available resource to achieve this goal.” Additionally, Palantir, Stability, Salesforce, Scale AI, and Cohere have also joined the commitments.

The initial commitments, unveiled in July, aimed to prevent the misuse of AI’s capabilities for harmful purposes. Google, OpenAI, and Microsoft, a partner of OpenAI, endorsed these commitments during the same month.

The private commitments endorsed by the Biden administration are viewed as a temporary measure, as discussions within Congress regarding potential AI legislation have been ongoing but with little concrete progress in terms of introduced bills or substantial legal changes. Concurrently, the White House is actively developing an executive order related to AI.

Related: Gary Gensler confirms SEC’s use of AI for financial surveillance

In June 2023, a bipartisan group of U.S. lawmakers introduced a bill aiming to establish an AI commission to tackle issues in the swiftly expanding sector. The Biden Administration has stated its commitment to working alongside international allies such as Australia, Canada, France, Germany, India, Israel, Italy, Japan, Nigeria, the Philippines, and the United Kingdom in the formation of a global framework for AI.

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