The potential negative impact of the misuse of Transparency International’s corruption index by the financial services industry
| Published date | 17 July 2020 |
| Pages | 3-17 |
| DOI | https://doi.org/10.1108/JFC-05-2020-0091 |
| Date | 17 July 2020 |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
| Author | Graham Baldock |
The potential negative impact of
the misuse of Transparency
International’s corruption index
by the financial services industry
Graham Baldock
University of Portsmouth, Portsmouth, UK
Abstract
Purpose –This paper aims to raise awareness of the potential misuse of Transparency International’s
Corruption Perception Index (CPI) within the financial services industry and outline the potential negative
impact thismay have on society in certain developing countries.
Design/methodology/approach –This piece of research adopted a mix-method approach across
three strands; an online line anonymous survey, consisting of 24 questions, face to face interviews with
10 anti-bribery and corruption compliance officers and three focus group, one in Hong Kong, India and
Mexico.
Findings –The results of the research have evidenced that there is a lack of understanding of the
methodology used to compilethe CPI within the financial services industry and there is a potentialadverse
impact if misused.
Research limitations/implications –A potential limitationwas the fact that the survey was written in
English yet was distributed to some countries where English was not the respondents’first language. As
such, it was accepted that there may have been context challenges or a misunderstanding of what the
questionasked.
Practical implications –By raising awareness of the methodology of the CPI and the advantagesand
disadvantages of its use, it will enable the financialservice industry to better understand the implications of
using such an index and the impactsof its misuse.
Social implications –This research highlights that through the potential misuse and lack of
understanding of the CPI by the financial services industrythis may have an adverse financial, growth and
developmentimpact on societies in low ranked countries.
Originality/value –This paper draws on a sub-set of results from a wider piece of research that was
undertaken for a Professional Doctorate. This research combined academic knowledge with practitioner
research skills,providing an original contribution toknowledge surrounding corruption from a moretargeted
focal point, particularly with input from anti-bribery and corruption compliance officers in the financial
serviceindustry.
Keywords Perception, Financial Services, Corruption, Bribery, Transparency International
Paper type Research paper
Introduction
Each year, since 1994, Transparency International (TI) publishes a Corruption Perception
Index (CPI), which ranks countries/territories by their perceived levels of public sector
corruption. Many organisations, particularly those in the financial services sector, have turned
to the TI-CPI as a means of assessing and managing bribery and corruption risk; however, it
would appear that the Index is being used as a means of assessing other risks, such as money
laundering and fraud across different countries. This raises the question as to how appropriate
Financial
Services
Industry
3
Journalof Financial Crime
Vol.28 No. 1, 2021
pp. 3-17
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-05-2020-0091
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
To continue reading
Request your trial