Newsletter

Dear ACC Northeast Chapter Members and Friends,

I have recently seen several headlines claiming the role of in-house counsel has evolved. Experts claim we now have a seat at the business table.  We are considered strategic partners to the business.  The corresponding articles then set out and list all the skills needed to succeed in this new world order for in-house counsel--skills apparently not taught in law school.  The coveted in-house role, according to these experts, now requires not only technical legal knowledge but also the ability to manage resources, create a deck, communicate legal analysis only in bullets, manage a budget, learn the business and so on.  The so-called soft skills, such as listening, empathy, time management, and teamwork, for example, are also highly valued now more than ever.

Some law schools have evolved and are teaching these new types of skills.  (Not sure how they teach empathy, but that’s for another day.) Certainly, the legal interns lately are getting more impressive.  But for those of us who have not seen the inside of a courtroom, never mind a law class, in a while how are we to develop these skills that are so in-demand right now?  And how does the law school graduate without such training qualify for and succeed in such a role?

For answers to these questions, you’ve come to the right place.  Well, not me, but the ACC.  This community is the one community that can demonstrate how one can win at fulfilling the in-house role.  It is, after all, the only organization designed by in-house counsel, for in-house counsel®.  With more than 45,000 in-house legal professionals in 85 countries, ACC is well-positioned with access to experts, thought leaders, and a myriad of other resources.  In fact, the membership includes over 10,000 organizations, including an astonishing representation from 99% of Fortune 100 companies.  There are 8,500 CLOs who are members. That’s a lot of legal leaders.

The numbers are impressive, but let’s look behind the numbers at the personal side.  The side that tells the real story.  There are educational programs, roundtable discussions, and workshops organized by substantive networks and chapters around the world designed to bring the critical subjects to your desktop or to a meeting venue near you. There are written resources to educate and persuade. Networking opportunities abound, too, including leadership roles providing extracurricular on-the-job experiences to complement your day job.  All curated to address the timely issues facing companies today.

Even our Northeast Chapter community (one of the largest chapters at the ACC) is thriving with the latest membership number including over 1,400 members, representing over 6% growth since I took over as president two years ago.  Our Chapter has not seen this level of membership in several years nor has it seen the level of sponsor engagement we have seen this past year.  The ACC community is an engaged and robust one offering not only access to experts globally but strong local networks for in-house counsel to engage in and grow.

I know all about this community because I’ve been deeply involved with the ACC for well over a decade.  I attribute much of my career progression to skills I have honed and knowledge I have gained through this involvement, like leading this chapter as its president for two years.  I would encourage you too to take advantage of everything the ACC has to offer to grow your skills.  This community addresses the evolving nature of the job of in-house counsel every day.  You will up your game, so to speak, as a result, and what you learned in law school will grow to the next level.

I am on the ACC soap box today because I am coming to the bittersweet moment where my term as president of the ACC Northeast Chapter is coming to an end.  I will soon turn over the leadership reins.  Like all leaders I hope I have made some impact over these last two years such that I have left the organization better than when I found it. The time never seems long enough, but then at the same time, it seems too long. I do believe a leader should be judged by the impact they have directly on the people in that organization.  It’s not about attendance rates or lovely lawn parties, really.  It’s about helping our members, no matter the role, background, law school, or skillset, realize their dreams. Dreams of landing that next coveted in-house role or even just the recognition that your skills are valuable to the business. The ACC community has helped me fulfill my career dreams, and I hope the efforts of our Chapter over these past two years have had an impact on your career, too. I encourage you to grow your involvement in the ACC Northeast Chapter.  We will be better with your involvement, and you will also benefit.

Thank you to my colleagues on the Board for trusting my leadership and to all of you for the opportunity to lead this great organization.  I want to especially thank our executive director, Julie Duffy, for her efforts managing, well, literally everything. Our job running the chapter would be nearly impossible without her.  I hope to see you at a Chapter event soon.

Sincerely,

Stephanie Lambert
President, ACC Northeast Chapter, 2021-2023

FOCUS recently sat down with Rashima Shukla, Senior Staff Counsel at PTC, a large global computer software and services company headquartered in Boston. Rashima is an active member of ACC Northeast, volunteers on the DEI Committee, and has been participating in our inaugural NextGen Peer Connect Program. Find out a bit more about Rashima, her role at PTC, and how she got involved with ACC Northeast.

Please tell us a little bit about your company and your role there. What are your responsibilities and what does a typical day look like?

I serve as Senior Staff Counsel on the legal team at PTC, a large global computer software and services company headquartered in Boston. PTC’s software suite is used by some of the world's most innovative manufacturers, including in the federal aerospace and defense (FA&D), automotive, industrial machinery, life sciences, and consumer products industries. My role primarily serves the Americas business support function, with a focus on PTC’s Federal Aerospace and Defense (FA&D) group. This entails negotiating a variety of deals in support of the defense sector, including with the U.S. Department of Defense and multinational defense contractors.

More recently, I have been providing a legal perspective within PTC on the rapidly evolving topic of artificial intelligence (AI), helping to shape governance and assess the potential risks and rewards of AI.

What was your career path? What drove you to become a lawyer? How did you get to where you are?

After graduating from law school, I joined the in-house team of a small, privately-held technology company that provides innovative GPS and navigation technology to the U.S Government. As part of a small business, in-house attorneys often wear several hats, and it was a good opportunity to get involved with a broad array of matters and take on significant responsibility early on. I spent around ten years there before starting my current role at PTC under three years ago to take on a new set of exciting challenges.

As for what drove me to become a lawyer, I’m the first lawyer in my family, and growing up as a second-generation American, I was often asked by my parents to help with consumer issues or other matters - unfortunately, they sometimes found that a Boston accent got more traction than an Indian accent. This gave me a firsthand appreciation for the importance of being able to advocate for a position and navigate sometimes complex terms.

How did you hear about ACC Northeast? What made you excited to get involved in the ACC Northeast, and how has your experience been participating in the ACC Northeast Peer Connect program?

I heard about ACC Northeast through colleagues in the legal department, as well as colleagues who are members and/or serve on the Board. Thereafter, I began attending interesting panels, social events, and joined the DEI committee.
The ACC Northeast chapter has been a great resource for career development, networking, and furthering my commitment to diversity in the law. With respect to career development, the opportunity to hone leadership skills by participating in the ACC Northeast Peer Connect program has been a fantastic experience. The program includes both in-person and virtual sessions designed to connect members from areas companies. In addition to hearing from experienced ACC attorneys who have led successful legal teams, in each session, participants collaborate on effective approaches to various hypotheticals that are similar to situations faced by in-house attorneys.

What are your interests and hobbies outside of work? What do you do to decompress and relax?

Tennis, being the fun aunt to my little nieces and nephews, and searching for the best tacos in Boston!

Do you have any advice for members, either professionally or personally? This can be advice for those just starting in their careers, or tips for experienced lawyers.

I have found that getting actively involved in leadership roles within area bar associations and groups can be very rewarding, both personally and professionally. By serving as past-president of a local affinity bar association (SABA GB, South Asian Bar Association of Greater Boston), I’ve made close friends and developed an incredible network of hundreds of supportive colleagues in the area legal community. Joining the DEI committee of the ACC Northeast chapter meant instantly connecting with new colleagues as well, so if the opportunity to serve in a leadership role arises, I’d recommend taking it.

HomeStart's goal is to end and prevent homelessness through targeted one-on-one interventions with low-income at-risk individuals and families residing throughout Greater Boston. HomeStart provides comprehensive services to those at all stages of homelessness and housing crisis, moving people from shelter into permanent housing, providing housing retention and stabilization services to those who are formerly homeless and have been recently housed and preventing homelessness among households on the verge of eviction.

Since its start, HomeStart has helped more than 14,000 people who were experiencing homelessness to find and move into a safe, stable place of their own and prevented more than 4,000 low-income households from being evicted– with 95% of those households remaining securely housed even 48 months after the intervention.

Thanks to groups like the Association of Corporate Counsel and Day Pitney, LLP HomeStart has been able to give clients duffel bags of housewarming home essentials to help turn their bare-bones new apartment into a home.

HomeStart is proud to have Housing Search advocates working out of all the adult emergency shelter sites in Boston and Cambridge. Just recently we took a car full of Welcome Home Packages to Rosie's Place, to give to women who have moved into a place of their own with the help of their HomeStart advocate.

To support HomeStart with a donation, visit www.homestart.org/donate or for more ways to get involved, visit www.homestart.org/corporate or reach out to Carrie Neff, Director of Community Engagement at neff@homestart.org | (857) 415-2242.

The Communications Committee focuses on information sharing within the ACC Northeast chapter through the recently redesigned quarterly newsletter, the Around-the-In-House podcasts, and social media channels.  Its goals are to foster more interest in programs, create access to ACC Northeast Board members, and act as an informational resource for members.

The quarterly newsletter is the one source for a review of the Chapter’s past activities, upcoming programs, and specialized articles of interest to the membership.  The Newsletter offers members an opportunity to learn about Chapter activities firsthand, plan relevant content for members, and publish short articles from time to time.

Now well into its second season, Around-the In-House podcasts feature conversations with ACC Northeast members and highlights the diverse range of experiences within our community.  Members share their career journey, memorable experiences with ACC, and helpful knowledge that they have developed.  For more information, check out this issue’s Board Recommendations.
 
ACC Northeast’s social media channels are the most active at the ACC, offering members an opportunity to create timely content for channel followers.  ACC Northeast’s LinkedIn page shares news of upcoming events, photos, and other announcements relevant to ACC Northeast members. Our YouTube page contains videos of interviews and other content from members and sponsors. Be sure to follow these accounts to stay up to date!
 
If you are interested in volunteering with the Communications Committee, please reach out to Julie Duffy at juliesduffy@gmail.com.

For the first time since the pandemic, Summerfest was back in full swing on July 20, 2023 at the Moakley Courthouse in Boston. Despite the crazy weather the Northeast has experienced this summer, we could not have asked for a more beautiful Boston summer evening. ACC NE members mixed and mingled with the Board of Directors and ACC NE sponsors, enjoying signature cocktails – I can personally vouch for the hibiscus margarita - and a wide array of delicious food. My favorites were the crab cake sliders and quinoa tacos!

The highlight of the evening was a speech by the Massachusetts Attorney General Andrea Joy Campbell. AG Campbell highlighted the importance of fostering connections with legal leaders in our communities--whether at firms, in government, or in the private sector--and she talked about her own path to becoming the first woman of color elected to statewide office in Massachusetts--an incredibly inspiring story! After her remarks, Ms. Campbell circulated to meet the members and enjoy the food along with the delicious New England-themed desserts, which represented a delicacy which represented each of our member states:

Maine – Maine Blueberry Cheesecake
Massachusetts – White Chocolate Cranberry Cookie
New Hampshire – Mini Apple Cider Donut
Vermont- Strawberry Rhubarb Pie in a Jar
Rhode Island – Dells Frozen Lemonade

As the sun began to set over the Boston harbor, the caterers began to pack up and members hesitantly began to leave, but the overwhelming consensus was that Summerfest 2023 was a hit, and we hopefully don’t have to put it on pause again. If you were able to join us, thank you, and as always, a HUGE thanks to our sponsors. See you all next summer!

How to Protect Your Company in the New World of AI
By Amy Morrissey, Partner at Bowditch

The new technology advancement using artificial intelligence ("AI"), ChatGPT (Chat Generative Pre-Trained Transformer) is a computer model that uses machine learning to generate relevant responses that mimic human-like conversations.  According to a February 2023 analysis by Swiss Bank UBS, ChatGPT is the fastest-growing app of all time.  The analysis estimates that ChatGPT had 100 million active users in January 2022, only two months after its launch.  For comparison, it took nine months for TikTok to reach 100 million users.  With its widespread use, corporate counsel should be aware of the risks of using of AI and ensure that those risks are mitigated as much as possible for the company.

One concern is that ChatGPT (and similar machine learning platforms) is still in its infancy.  Although there are millions of users, ChatGPT launched less than a year ago and through its own admission, is still in the testing phase.  There is simply not enough data to ensure its accuracy.  Indeed, the data in the base model does not consider data prior to 2021 (paying subscribers have the ability to use real-time data via a Bing plug-in) and also does not have access to real-time information or knowledge beyond its training data.  This leads to inaccurate results.

Privacy and confidentiality in using ChatGPT are also concerns.  ChatGPT records every conversation and shares that information with other companies and its AI trainers.  When an employee types confidential information into the dialog box, it’s recorded and saved on ChatGPT’s servers.  If that data contained a trade secret of the company or personal information of another employee, the information is now used in new ChatGPT searches, exposing the company to data privacy breaches.  For this reason, companies such as Amazon and Apple have largely restricted employee use of ChatGPT.

ChatGPT also creates ethical issues, such as bias.  Language models like ChatGPT are trained on vast amounts of data, which can inadvertently introduce prejudice in the training data.  OpenAI, the owner of ChatGPT, states on its website, “[w]hile we have safeguards in place, the system may occasionally generate incorrect or misleading information and produce offensive or biased content” (emphasis added).  Such biases, if relied upon, could lead to discrimination claims within an organization.

The last major concern is data security.  ChatGPT can be exploited by malicious actors to develop programs and platforms that mimic others.  These actors can also use the chatbot to create applications meant to install malware on users' devices.  Additionally, phishing emails become harder to notice because ChatGPT can mimic a person.  This puts companies at greater risk for cyber-attacks.

While corporate counsel cannot eliminate these risks within a company, the risks can be mitigated by putting in place some processes and procedures.  

1. Corporate counsel should draft polices about acceptable use of ChatGPT.  These policies should include internal use and external use.  Think of this similar to corporate policies around internet usage.  Among other things, the policy should include language about validating the ChatGPT data and using confidential information.
2. Companies should invest in comprehensive training and awareness programs to educate employees about the responsible and secure use of AI tools like ChatGPT.  This training should cover topics such as data protection, confidentiality, privacy best practices, and the potential risks associated with AI-powered technologies.
3. Make sure IT has additional safeguards in place and routinely audits such safeguards.  For example, some companies have created a custom pop-up notice about security each time an employee uses an AI platform.  By doing so, security teams can mitigate these risks and help safeguard against potential security breaches.

These three steps can help corporate counsel protect its company from misuse of ChatGPT.

Mark Your Calendar and Plan to Attend!

ACC Northeast offers a variety of programs, webinars, and events designed for our members' unique interests.  Keep your eye on the Chapter Events calendar on the website and be sure to participate in a few or ALL of the Chapter Programs happening in 2023.

Dear ACC Northeast Chapter Members and Friends,

I would not be where I am sitting today if it were not for the ACC.  I mean, literally, I would not be physically located in this very spot.  I am currently in an office as a member of the NetScout Legal Department only because I met the General Counsel when I volunteered twelve years ago to work on a committee at the ACC.  At the time, I had no idea the career path that would take me from there to here.  That’s the uncertainty we all encounter while networking: will the connection I make today be meaningful at some point tomorrow?  Is networking worth the effort? Based on my past how could I tell you it is not?!

Some consider networking uncomfortable, a chore, a necessary evil that takes us out of our comfort zone. Others thrive on meeting new people and can be considered great connectors. For those of us more on the introverted side, it can even be exhausting at times.  Nevertheless, we all persist with the hope that today’s efforts will yield a meaningful connection whatever and whenever that may be.  We all know the pandemic put a halt to in-person networking, which seemingly set us all back, some back into our introverted shells and out of practice.  With the recent resurgence of in-person events, however, it is safe to say that in-person gatherings have made a resurgence and networking is now stronger than ever. It’s time for all of us to come out of our shells and make up for lost time.

The ACC Northeast Chapter is excited to invest in this resurgence. In response to the feedback from our member survey and follow up “listening tours,” we have and will continue to host interesting gatherings to foster member networking. We do this recognizing that the connections made today do indeed present future opportunities for all of us.  Given the value in-person networking presents to each of us and our employers, I would like to highlight some of our recent events, held in various locations throughout the Chapter, and provide a peek into what’s coming next.

In late April, our DEI Committee was pleased to host, along with our sponsor Goodwin, a gathering of affinity bar associations.  Feedback from attendees was extremely positive, particularly on the networking aspect of the program. “It really encouraged people to network and share their current goals, struggles, and achievements,” said one enthusiastic participant. How good is that?!  Due to the resounding success of this gathering, we hope to hold another again soon. 

In May, Thomson Reuters hosted a roundtable conversation in Cambridge on managing legal priorities. Not to be outdone, Pierce Atwood, our Maine sponsor, completed the second of a four-part series of in-person programming in Portland on the top three things in-house counsel need to know. Also, halfway through a three-part in-person program, Armstrong Teasdale hosted us in Boston for various GC hot topics such as legal department impact, layoffs, and compliance, with data protection and privacy planned for September. Later this month we begin the first peer-to-peer development program for Next Gen in house lawyers in Burlington, designed to foster networking among the next generation of legal department leaders.  And, of course, Summerfest will be back with a roar in July!  The annual summertime gathering of law firm and legal department leaders is making a comeback after several years hiatus due to the COVID impact. Networking outside on a summer evening in July in the city doesn’t get any better!

As you can see, we have hosted and planned a mix of new and returning in person events because these present opportunities for each of us to get back on track making meaningful connections in our profession. Stay tuned to future communications via LinkedIn and email, or simply head to our website, for additional in-person networking opportunities in the fall. I, for one, look forward to getting back on my feet (literally again!) meeting and networking since, well, past is really prologue for me.  See you soon!

I would like to take the opportunity to thank the members who took time to share their thoughts with our leadership through the member survey and listening sessions.  Special thanks also to James Coughlin, Mitch Applebaum, Gemma Dreher, Len Ho, Kathleen Patton, Ruchi Shah, Larry Weiss and Patrick Wu for their contributions to the survey or listening sessions. We are better because of your input and involvement.

Sincerely,

Stephanie Lambert
President, ACC Northeast Chapter, 2021-2023

FOCUS recently sat down with Benjamin Wojcik, Director, Head of Litigation at Covetrus, a global animal-health/technology company based in Portland, Maine. Benjamin is an active member of ACC-Northeast and volunteers on the Programs Committee.

Please tell us a little bit about your company and your role there. What are your responsibilities and what does a typical day look like?

I am Head of Litigation at Covetrus. While my role involves management of all aspects of active litigation, I am also responsible for advising various business units on ways to avoid or resolve disputes before reaching that stage. In addition, I regularly advise on how to handle various other types of legal processes (i.e. – court orders, subpoenas, garnishments, etc.). 

What was your career path? What drove you to become a lawyer? How did you get to where you are?

Like many before me, a family member led me to recognize law as my calling. That was my father, whose selflessness and willingness to apply intellect toward serving the professional needs of others was (and still is) highly motivating. I was fortunate to have practiced law with him for over three years in a regional law firm setting, where I was exposed to a lot early on. My focuses there were both business and real estate transactions, along with commercial litigation. I subsequently spent another five years at a prominent international law firm, where I was responsible for representing some of the world’s largest banks and lending institutions in financial services litigation. My time in private practice was preceded by a judicial clerkship in Washington, D.C. I left private practice around four and a half years ago to pursue a career as a corporate in-house attorney, where I remain today.

How did you hear about ACC-Northeast? Can you describe your experience with ACC-Northeast? What made you excited to get involved in the ACC-Northeast?

I became aware of ACC-Northeast through legal department colleagues who either were or had been members. The Northeast Chapter has been a fantastic source for things like networking, continuing education, tools for legal department development, as well as opportunities to grow professionally outside of traditional responsibilities associated with one’s day job. Fellow ACC member and ACC-Northeast Board Member, Kelly Whetstone helped pique my interest in getting more involved with the ACC through service on the Northeast Chapter’s Programs Committee.

What are your interests and hobbies outside of work? What do you do to decompress and relax?

Golf, distance running, and skiing.

Do you have any advice you have for members, either professionally or personally? This can be advice for those just starting in their careers, or tips for experienced lawyers.

Be open to different opportunities to learn what you have a passion for, or don’t. And when there doesn’t seem to be a ton available, don’t wait for one to come to you. Take action and don’t be afraid to create!

Final question: What’s something that you are excited about this summer or later this year?

Taking in all that summer in New England has to offer with my family. And probably the Mount Desert Island Marathon in October.

Project Citizenship is a non-profit legal services agency based in Boston, MA, that provides free, high-quality legal services to assist eligible lawful permanent residents (green card holders) apply for U.S. citizenship. Our mission is to increase the naturalization rate across New England with a focus on the most vulnerable populations. Engaging volunteers in naturalization work allows us to scale up and keep services free for all: Since founding at the end of 2014, we have helped over 11,200 immigrants apply for citizenship!

Volunteer opportunities are available for both non-attorneys and attorneys. Join us at in-person and virtual citizenship workshops to assist pre-screened clients with their applications, as an interpreter for eligibility intake, or as a representative at naturalization interviews for applicants with disabilities. We carry malpractice insurance for volunteers; volunteers are neither named as preparers nor representatives. Required training, support materials, and real-time mentoring provided. Learn more about our upcoming volunteer opportunities on our website and contact volunteer@projectcitizenship.org with questions.

ACC-Northeast Launches Next Gen Leadership Development Program.

A special, five-part leadership development program for participating ACC-Northeast members and hosted by the Next Gen Committee kicks off this summer. The Peer Connect Next Gen Leadership Development Series (the “Program”) consists of 5 separate group sessions focused on key leadership skills and concepts for in-house counsel. Geared toward new and aspiring managers, the Program will cover essential topics in leadership, including influencing skills, strategic agility, decision-making, team building and change management, leading in a global environment, and diversity, equity, and inclusion matters. The Program begins with an in-person kick off session in June, continues with three virtual sessions throughout the summer, and concludes with an in-person capstone session in the fall. In addition to the group leadership sessions, participants will have mentorship opportunities with senior ACC-Northeast Members to discuss their own personal aspirations and expand their professional networks.

The ACC-Northeast Next Genc Committee provides networking and camaraderie among the next generation of in-house attorneys in the greater Boston area. The target demographic for the NextGen Committee is lawyers who have practiced in an in-house setting for ten years or less, but events are open to all ACC Northeast members. This Committee allows lawyers new to in-house to connect with others setting out on the in-house journey at the same time.

As the Bruins and Celtics recently learned in their respective playoff losses, failing to adapt to changing circumstances can have disastrous consequences. The same is true for legal departments that fail to embrace advances in technology. In-house lawyers who want to stay ahead of the curve and avoid being left behind should listen to the best legal technology podcast: The Legal Toolkit.

Hosted by legal technology expert and entrepreneur, Jared Correia, The Legal Toolkit is a must-listen for in-house lawyers who want to stay informed about the latest developments in legal tech. The podcast features interviews with leading legal tech innovators, entrepreneurs, and investors, providing listeners with insights into the latest trends and developments in the industry.

One of the reasons why The Legal Toolkit is so valuable is that it covers a wide range of topics. From artificial intelligence and blockchain to e-discovery and cybersecurity, the podcast explores all aspects of legal technology. This breadth of coverage ensures that listeners are exposed to a diverse range of ideas and perspectives, helping them to stay informed about the latest developments in the industry.

Another reason why The Legal Toolkit is so valuable is that it features interviews with some of the most influential figures in the legal tech world. Guests on the podcast have included the likes of Richard Susskind, the world-renowned legal futurist, and Mark Cohen, the CEO of Legal Mosaic and a leading commentator on the legal industry. These interviews provide listeners with unique insights into the minds of the people who are shaping the future of the legal industry.

In addition to its informative content, The Legal Toolkit is also highly engaging. Jared Correia is an excellent host, and his interviews are always lively and engaging. He has a knack for asking insightful questions that get to the heart of the issues, and his guests are always forthcoming with their answers. This makes for a podcast that is both informative and entertaining.

One real-life example of a law department utilizing a technology discussed on The Legal Toolkit is the use of contract management software. In a recent episode, Jared Correia interviewed the CEO of a leading contract management software company. The interview provided listeners with insights into the benefits of using contract management software, including increased efficiency, improved accuracy, and reduced risk. Following the episode, a law department at a large corporation implemented the software and saw significant improvements in their contract management process.

Overall, The Legal Toolkit is the best legal technology podcast for in-house lawyers. Its wide-ranging coverage, high-profile guests, and engaging format make it an essential resource for every legal department.

OpenAI API. ChatBox. May 24, 2023. Prompt by Sean Devlin: “Please write a 400- word article for the Northeast Chapter of the Association of Corporate Counsel newsletter about the best legal technology podcast and why member in-house lawyers should listen to it. Include references to Bruins and Celtics playoff performances. Include a real-life example of a law department utilizing a technology discussed on the podcast.”

Understanding SupTech for a Regulated Organization’s Corporate Counsel
By Peter McLaughlin and Ashfin Islam, Armstrong Teasdale LLP

Regulators are facing a big data problem. Amid rapid innovation and steadily increasing rules across the regulated entity landscape, the number of firms, disclosures and complaints they must manage is increasing rapidly and is straining limited resources. SupTech, short for supervisory technology, is the application of emerging technologies to improve how a regulating or supervising agency in any sector – financial, export control, or data protection – conducts its regulatory duties. (Of course, the opposite side of SupTech is RegTech, which is focused on the use of tech to support an organization’s compliance efforts.) There are varying but similar definitions of SupTech. According to a World Bank Group report, SupTech “refers to the use of technology to facilitate and enhance supervisory processes from the perspective of supervisory authorities.” The Bank for International Settlements (BIS) defines SupTech as “the use of technology for regulatory, supervisory and oversight purposes.”

SupTech is focused on maximizing efficiency by applying automation, optimizing operational and administrative operations, and digitizing the working tools and data. SupTech can be at its most robust when incorporating variants of artificial intelligence (AI) and machine learning (ML). At its most transformative, SupTech can unlock the potential of mountains of data, robust communication workflows and deep regulatory knowledge. At its best, it can serve as a springboard to more comprehensive risk oversight and better, more useful regulations.

What is the leadership of a regulator to do with all of this? It is impossible to simply put aside the challenges of resources, but the status quo is untenable. Likewise, building a proprietary system that reflects the agency’s identified needs is nearly impossible – technology budgets simply aren’t large enough. That means the most logical way forward is usually to work with a third-party SupTech provider with the necessary skills and experience. This presents opportunities for both regulators and sophisticated technology providers, especially in the AI/ML space. Regulators will evaluate potential SupTech providers based on several important technological factors, including flexible, scalable technology; collaboration and communication; expert content; and their ability to manage people and change.

First, the ideal SupTech is flexible and scalable. Solutions should be able to integrate and communicate with just about any other system or content in the supervisory workflow. The benefit of using AI/ML is to collect and analyze huge troves of data. One of the benefits of cloud infrastructure is enhancing computational performance so that regulators spend less time worrying about server capabilities and more time on core supervisory functions. However, some supervisory institutions, such as central banks, have reportedly been slow to adopt completely cloud-based infrastructures. One solution is a hybrid model where the cloud infrastructure works together with on-premise technology. The ability of a SupTech provider to be flexible and scalable with the needs of a supervisory entity is key to fostering adoption.

To further encourage acceptance, SupTech should be able to collaborate and communicate with all varieties of systems or content in the supervisory workflow. SupTech must facilitate smooth communication and collaboration between the regulator and the regulated entity as well as requesting/complaining individuals at every step of the process. For example, ChatGPT and advanced large learning models (LLMs) empower chatbots to interact with regulated organizations and consumers more efficiently. Similarly, natural language processing technologies (another AI/ML flavor) can more efficiently absorb and audit documentation produced by an organization under review. These impressive tools and technologies are less helpful if the SupTech cannot talk directly and efficiently to the systems it seeks to supervise.

Next, the system should offer prebuilt templates. If we take the example of data privacy space, this will mean configurable forms for the EU General Data Protection Regulation (GDPR) or relevant national and state laws out-of-the-box. Further, an effective system will also have a strong ability to implement specific content and rules supplied by each adopting regulator. For example, the Irish Data Protection Authority (DPA), the Japanese DPA and the Australian DPA individually have their own supervisory processes and experiences, not to mention pain points. The incorporation or rather the translation of regulatory content into machine-readable regulations may enable a computer system to process those rules against an organization’s policies and procedures. The effectiveness of SupTech solutions is currently limited by both poor data quality and ineffective use of supervisory tools. SupTech solutions that place an emphasis on global and local expertise are able to more readily adapt their technologies to the required regulatory landscape. More emphasis placed on expert content will lead to better data quality and allow AI/ML capabilities to more accurately analyze data with respect to the regulatory scheme.

Despite SupTech’s rapid evolution, the human element of regulator activities remains an important fulcrum. The complexity of rules and their interpretation is a part of this, but also the difficulty of managing change within any organization (even a government body) cannot be underemphasized. All of this cutting-edge technology must benefit the individual regulators and be managed as an assisting tool rather than a looming threat. And, any change to tools and systems requires some level of change in how people do their jobs. Therefore, the best SupTech will be developed with people in mind. While SupTech can assist with the supervisory functions, it is still people who are ultimately responsible for interpreting the AI/ML analysis into actionable enforcement. Ideally SupTech will keep in mind the human element, understanding that SupTech by itself is not the final end point of regulatory supervision.

Despite the seemingly endless benefits of SupTech, all integrated AI/ML systems face similar and daunting issues. First, the increasing variety of interconnected systems that make SupTech so enticing also presents a huge data security risk. As systems and platforms become more connected, the scope of potential cyberattacks grows. There are more entry points for cyberattacks and more voluminous data for potential bad actors to target. This additionally leads to operational risk. Discrepancies in regulated institutions’ network infrastructure, whether it be non-conforming policies and procedures or data breaches, can have negative cascading effects on a supervisor’s activities. A breach in one of these interconnected systems can cripple entire regulatory ecosystems. Second, an issue that looms in the undercurrent of the AI/ML revolution presents significant risk. The programming and algorithms are still developed by humans with inherent bias and ignorance. The conclusions reached by SupTech are invariably colored by this risk. Massive amounts of data are processed, and the technology spits out a result. It is difficult for supervisors to understand the algorithm’s logic or decision-making process. This black-box issue leads to further legal issues. Supervisors who take action based on algorithmic decisions create a new set of problems. Any regulated institution should be able to request a full accounting of the decision-making process. If the SupTech’s engine is proprietary, it might become very difficult to audit these automated decisions. Finally, SupTech must take into account the number of legacy processes used by supervisors and regulated entities such that these processes can be linked to the SupTech solutions and ensure that there is no data loss. Otherwise, the SupTech’s decision-making process is compromised with an incomplete data set.

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