Compliance Corner with Alex Henderson: Issue 1 – Mock Audits

Meet new iGamingFuture columnist Alex Henderson.

Currently, Group Head of Compliance for GIMO and NetBet Enterprises Ltd, Alex began his career working within UK law enforcement agencies as a Financial Investigator and AML expert advisor.

He’s now bringing his 15-years of top-level experience to iGF, with a not-to-be-missed monthly column.

Read On. And get Alex’s exclusive take on Compliance, Ethics, Risk Management and Inclusion.

During one of a thousand meetings today, I was discussing our existing procedures – and how we could do things differently. 

Someone made an important, but contentious, comment which is commonly used throughout society in everyday life: “If it ain’t broke, don’t fix it”. To which I replied: “Evolution and innovation should not be prompted by failure, but fired by a progressive pro-active determination and commitment to be better”.

This was not a flippant comment. It is something I believe most profoundly, hence the need to quickly jot it down and make it into a fancy-looking quote.

Returning to my meeting, and the purpose of this article, I wholeheartedly disagree with the comment from my colleague, and, to be blunt, anyone who takes this approach. But I value differing points of view, even if I disagree with the mindset. I can also appreciate why such a stance is commonly adopted. 

As we all know, with change comes risk. And with risk comes the potential to fail.

But the fear of failure should not be a deterrent to striving for greater success.

I would much rather be innovative, and fall flat on my face, than follow the crowd of mediocrity on the mere premise that it was safe. 

In many ways, this is the approach taken by regulators: whereby today’s rules and regulations are based on yesterday’s failings; reactive, not proactive, dormant until awoken by the non-compliance of an operation. Of course, it’s near-impossible for regulators to predict tomorrow’s challenges.

But a lack of vision and awareness–to be forward-thinking–is what leads to problems, which then need to be fixed. 

Pretty much all of us in the gaming industry are hoping that the long-delayed gambling White Paper and Gambling Act review do not follow the historical repetition we have seen for the past 20 years. This cycle benefits nobody. Investment into what might be tomorrow’s problems is key. We must ask ourselves: “What can go wrong? And how can we prevent it?” 

It’s apposite to concede, here, that, indeed, something that is not broken does not need to be fixed. Yet we should always guard and protect against the possibility of breakdown, noncompliance, and failure. Any effective compliance team, or business for that matter, knows this. Within compliance, we should be constantly reviewing our policies, procedures, guidance and day-to-day tasks. 

A perfect example can be found within Anti-Money Laundering, whereby a company chooses to set certain monetary thresholds as part of its protocols to reduce risks. While these processes might be initially effective, it’s a certain bet that over time they will need to be updated. A fresh set of eyes, a different perspective and technological enhancements are all opportunities to make progress. We should not be waiting until a negative issue occurs for these procedures to be reviewed and developed. For all of us, our company’s growth depends on the compliance department’s ability to innovate – as well as the wider organisation’s overall effectiveness. All processes, all the time, should be under constant review with the aim of improving them. 

As part of my approach to innovation and evolution within compliance, there are two highly important aspects of my blueprint that I implement within every organisation I work with. 

1. Regular mock audits and assessments:

Most businesses conduct mock audits as an approach to finding areas of vulnerability before a regulatory assessment. Whilst this is beneficial–and indeed a secondary aspect of why mock audits are vital– it is not my main objective. I like to find areas of every single process that could have even the slightest tweak that makes it beneficial to the business. Reviewing and analysing every part of the operation. Even though it may not be “broken”, I am certain that every review my team and I undertake presents an opportunity that would otherwise have been missed. To date, I have not been part of a single mock audit that did not lead to a change. I will speak more about this in the next article.

2. Encouraging creativity and autonomy:

It sounds simple enough, but I have been a part of many organisations and teams that have no acceptance, or opportunities, for the more junior employees (in terms of time in an organisation and not rank) to bring forward their ideologies. Some of the best ideas and compliance improvements I have seen over the past few years have come from either new colleagues or members of different teams that were finally given the opportunity to speak. I want everyone who works with me to feel as though there is no hierarchy and that their views are appreciated. 

I have gained so much knowledge and heard previously unearthed ideas from my team members, purely as a result of giving them the freedom and encouragement that they deserve.

I have worked with a VIP manager, whose sole focus was to generate money for the business and find ways to do this. The last thing you would expect is for the person holding this position to be working with compliance to discuss ideas to improve processes that could ultimately impact their wallet. But they saw the bigger picture. They brought their thoughts and strategies to the table, and as a result, helped to produce a system that in the long run achieved a higher goal.

This key creative strategy allows ALL employees–and not just my immediate team members–to bring their best ideas and suggestions to the table. Employees see that they are valued, and the organisation develops. This, for me, represents success in every sense of the word.