Using digital tools and bringing services online to detect and disrupt avenues for corruption.
Technical solutions can be applied at all stages and are often successful in reducing corrupt practices, as they are less open to manipulation or influence. There are many good examples in which cash handling has been taken out through the use of IT, thereby reducing opportunities for corruption.
Cryptocurrency is still a much-favoured instrument for organised crime and corruption; tackling digital corruption requires ending the use of anonymous companies to improve the transparency of ownership and operators.
Due to the nature of corruption and how difficult it is to prove, traditional controls and IT both need to be tailored to equip organisations for identifying and preventing it. Below are a number of examples where technology has been deployed to help combat corruption.
Examples and further resources
Data to detect corruption
A symposium on data analytics and anti-corruption was co-hosted by the World Bank and the Korea Development Institute School of Public Policy and Management in October 2021. The event covered various topics around how data can be used to detect corruption and measure its impacts, as well as looking at the effectiveness of anti-corruption initiatives. Recordings of all the sessions and further resources are available to view on the site.
Leaving cash behind in Ghana
Ghana launched a series of policies in 2020 to promote the shift away from cash and towards digital payments. Working alongside the World Bank and United Nations, their Cash-Lite Roadmap sets out how this transformation can make the government more efficient, transparent and accountable. A digital economy is also more inclusive, enabling more women to participate in the economy and generating wider social benefits.
Digital currency and aid
The World Economic Forum have published a paper on Digital Currency Governance and the use of blockchain platforms to distribute aid across borders. This paper explores examples of pilot projects conducted by humanitarian aid organisations, which aim to test whether blockchain-based tools and currencies can enable cross-border aid transfers in a more efficient, transparent and less costly way than cash, commercial bank payments or e-money.
Detecting fraud in sport
Sportradar’s Universal Fraud Detection System (UFDS) is a unique service that identifies betting-related manipulation in sport. The system uses sophisticated algorithms and a constantly maintained database of odds that are leveraged for the purpose of detecting match-fixing.
The UFDS monitors odds movements, including Asian and European bookmakers, betting exchanges and state lotteries, regulated and unregulated markets in order to get the most complete overview of global betting market.
By tracking odds changes and liquidity across such a wide range of markets, the UFDS is in an unrivalled position to detect irregular betting patterns in real-time, both pre-match and live (in-play). With specialist knowledge of the betting markets and the sports (team news, local rumours, match action), the team can reach a conclusion regarding the integrity of any match. In each case where fraudulent activity is suspected, a comprehensive report is compiled within 72 hours; providing a platform for any potential disciplinary proceedings or criminal investigations into match-fixing.
Tax via app in Tanzania
Tanzania has developed an app to verify and help regulate the sale of spirits, which are issued with electronic tax stamps. The Tanzania Revenue Authority uses these tax stamps on cigarettes, alcohol, sweetened non-alcoholic beverages. and music and film items. The app enables government officials to confirm that the electronic tax stamp is genuine and prevent counterfeit items being distributed.
Integrity and digital solutions
The UN Department of Economic and Social Affairs issued a paper in January 2022 on ‘harnessing the integrity dividends of digital government for reducing corruption in developing countries’. Trust with integrity considers the benefits of data-driven digital government innovations and how they can support public integrity and reduce corruption and the channels that support it. It also considers how transparency can be better achieved and how individual discretion can be reduced to prevent corrupt behaviour.
Three ways that governments can harness technological solutions to prevent corruption are set out in the article Integrity tech for Apolitical. Citing examples from Latin America, Carlos Santiso sets out strategies such as going ‘paperless’ for services and transactions, using open data to improve transparency, automating processes to reduce bureaucracy and working with start-ups to disrupt avenues for corruption.
Online services in Estonia
e-Estonia is government initiative to help Estonian citizens engage with the state via digital channels. The shift away from paper and cash reduces opportunities for corruption. Services that can be accessed online include voting, taxation, banking, education and training. Estonia scores highly on cloud usage, remote working and employment of IT specialists, demonstrating the country’s strengths in digital development. Estonia also has a high number of start-ups compared to similar countries.
Technology to support reform
The report Digintegrity: Digitally transforming the fight against corruption analyses how digital technology is being harnessed in supporting public integrity and anti-corruption policies. In 2019, CAF – Development Bank of Latin America undertook a comprehensive analysis of the progress and challenges of the anti-corruption agenda in Latin America and identified different fronts for action and institutional reform to promote greater integrity in public policies.
The paper Hacking corruption in the digital era explores how businesses can work with governments in public/private partnerships to leverage new technologies and data intelligence to curb corruption and strengthen integrity. Big data is a vital weapon in the war against corruption. It is essential that data-driven, tech-based anti-corruption solutions are applied to facilitate transparency, disrupting corruption risks and boosting integrity systems. Recent scandals such as the Panama and Paradise papers would have been far more difficult to uncover without the application of advanced analytics and artificial intelligence. These tools can be used to better detect and reveal issues through the raising of red flags and indicators in high-risk transactions and suspicious financial flows by data-matching and cross-referencing public databases.
Analytics and risk management
The OECD has issued a report on the use of data analytics to undertake corruption risk assessments. Analytics for integrity outlines various methodologies and tools, including the creation of risk dashboards and turnkey coding scripts, using infrastructure projects as an example for application. The OECD has developed frameworks to support policy recommendations in this area at a whole-of-government and institutional level, as well as capacity-building initiatives to facilitate knowledge-sharing, skills development and risk awareness.