REGULATION TECHNOLOGY: Enabling More Than Compliance Post The Pandemic - TripleOKLaw
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ISSUE 007
REGULATION TECHNOLOGY:
Enabling More Than Compliance Post The Pandemic
EDITION
IN THIS
DEC ISSUE 007 2020
ISSUE
11
PUBLISHER
TripleOKLaw Advocates LLP.
EDITOR
Oscar Mbabu
EDITORIAL TEAM Evolution is the nexus
Tom Onyango between Hedge Funds and
Stephen Mallowah
Catherine Kariuki Mulika Legal Service Providers
Janet Othero
Leyla Ahmed
Franklin Cheluget
Kivindyo Munyao
Joyanne Njau
Faith Kerubo
Yohana Baraza
Becky Genga
ART & DESIGN
Smith Creative
www.smithcreative.co.ke
FOR FREE SUBSCRIPTION, go to
www.tripleoklaw.com
ACK Garden House, 5th Floor, Wing C
First Ngong Avenue, off Bishops Road,
P. O. Box 43170 - 00100, Nairobi, KE
Pilot Telephone: +254 20 272 7171
Email: info@tripleoklaw.com
Web: www.tripleoklaw.com
A HAPPY NEW YEAR 14
Nairobi
22
The Adoption of Artificial
Legal Awards Intelligence (Ai) by Kenyan
Entities: Pertinent Legal Issues
COVER IN THIS Editor’s Note
STORY ISSUE T
he evolution of law and society
is often portended by a time
of catastrophe, uncertainty
and disillusionment. With
debt collection and its promise for both legal
and financial services.
This Issue does not promise Utopia, nor does
most economic sectors grappling with it create a reality that is altogether fantastic.
the reality of the coronavirus, firm executives are faced with a It is a tasteful articulation of the steps other
burdensome reality, they must evolve their businesses or die. legal practitioners have taken to add value to
12
The legal profession is no different, and its hesitation to innovate their jurisdictions through the incorporation
proactively is manifested by the apparent lack of innovation of law, finance and technology.
within the legal industry.
At TripleOKLaw, we dare ourselves to pioneer
This edition explores a futuristic view of the legal profession the evolution of our legal industry every day
Regulation and the numerous ways it is set to contribute to today’s digital and we hope that the readers of this issue will
Technology: economy. Our capable authors pushed themselves out of the find a kindred spirit in these Articles and thus
status quo to write articles on the advent of Regtech to the
Enabling more then challenge themselves to bring the promise of
Kenyan legal industry and how its proliferation may disrupt legal the Future into today’s reality.
compliance post the practice as we know it today, highlighted the next level of financial
pandemic services and how the legal profession can be a key contributor,
delved into the various applications of Artificial Intelligence (AI)
into the legal profession and discussed the realm of amicable
Oscar Mbabu
Managing Partner’s Note
07 26 A
n attitude of gratitude is the verifiable sources. As a firm, we usher in
biggest favour that we can the age of information with a conviction
give ourselves when in a to contribute to the facts and ultimately
difficult crisis. In this year we to the truth. I hope you enjoy this edition
have faced wave after wave of uncertainty over the holidays and that we will meet
Amicable Legal and been forced to approach our business in the new year with a renewed sense of
Debt Awareness from a different perspective. Consequently,
how we work, how we communicate and treat information
purpose. Merry Christmas and Happy
New Year.
Collection Week
that we come across has necessitated a big mindset shift.
Post Covid-19 I believe that the new format of our newsletter will enable
you to receive more qualified opinions from real, and John M. Ohaga
DISCLAIMER: The information contained in this newsletter is for general information only and is not intended to provide legal advice. Information
contained herein should not be acted upon in any specific situation without appropriate legal advice. We do not accept responsibility or liability to
users or any third parties in relation to use of this newsletter or its contents. All copyright, trademarks and other intellectual property in or arising
out of the materials vest solely in TripleOKLaw LLP, Advocates. For further information, contact us on
info@tripleoklaw.com
THE ABOVE STANDARD THE ABOVE STANDARD
Finalists at
THE John M. Ohaga
Senior Counsel C.Arb, FCIArb
AFRICAN
LEGAL
Amicable
AWARDS
2020
Technology Media and
Telecommunications (TMT)
Debt
Collection
Post Covid-19
W
e are honoured to have
been shortlisted for the
African Legal Awards
2020 alongside other top legal
practitioners from the African
continent.
TripleOKLaw - Client/External
Evance Odhiambo | Benta Moige
C
OVID-19 has presented unprecedented challenges to the entire word. The spread of
the disease has severely impacted the political, economic, and social orders in many
countries. With combating the virus being the world’s priority, normalcy in all activities
has been disrupted leading to widespread uncertainty and hardship hitting many
industries. In Kenya, the commerce sector especially the trade on credit is one of those areas that
have been severely hit. There has been a drastic shift in both corporate and consumer conducts,
with several business closing and numerous job losses generating substantial loss of income and
financial insecurity.
6 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 7
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There are a host of processes that amicable collectors a) Paying attention to
can effectively execute. They trace debtors and identify
their assets as well as establish their financial standing.
contextual circumstances
The debt collection department applies various
Effective debt collection post Covid-19 will involve
techniques when realizing debt. In fact, studies have
strategies that pay attention to the new circumstances
revealed that while a number of companies use debt
and economic climate. Therefore, it is advisable that
collection agencies, debtors have responded effectively
debt collectors work on nurturing relationships with
to law firm-based debt collection. This is because debt
their consumers, even before they start paying. This
collection based within law firms tends to be faster and
will help them clearly understand the context and the
more effective because if for instance a debtor fails to
viability of any methods applied to collect the debts as
respond to the debt collection department, the same
well as properly understand consequential risks if any.
can be forwarded to the litigation department within
the same firm hence saving on valuable time in case a
decision to litigate has been reached.
b) Coming up with flexible
There is a spike in loan delinquencies and non- Professional Debt Collection Furthermore, debt collection processes originating
payment of financial commitment among individuals, options
from law firm-based structures are done in accordance
small, micro-medium enterprises and corporate Aside from the traditional debt litigation, law firms
with the law and the client is exposed to minimal or Consumers and borrowers will all need flexible options
entities. Financial institutions should brace for a such as TripleOKLaw which have adopted amicable
no risk at all. The recovery methods employed entail to pay the debts owing as to when they can despite the
flood of loan delinquencies and defaults as unstable Debt Collection can as well serve as debt collection
approaching each case with its own uniqueness with an economic hardships. Effective debt collectors therefore
economic times lead to higher default rate. Borrowers agencies. The amicable collection approach has
ethical and legal strategy formulated and put in place. need to employ methods and modifications such as:
are now struggling to repay their loans due to immense benefits to the creditor who will save money
Therefore, the essence of engaging debt collectors
the shrinking purchasing power. As a result of the that would have otherwise been used in the litigation
is to ensure amicable settlement of claims without
described conditions, late payment and non-payment process. Further, the creditor is able to ensure timely
necessarily going through the court processes. The
01 Debts restructuring,
is increasingly becoming of great interest for business. debt recovery thereby strengthening their working
Judicial settlement avenue should only come in as a last
capital position and reducing their gearing levels.
resort and in the extreme circumstances furthermore,
02 Payment deferrals,
In the ever-increasing unstable economic environment,
engaging a law firm in debt collection is that even
proper and effective debt collection strategies are On the other hand, the debtor benefits from saving
while pursuing amicable collection mechanisms,
03 Extensions of repayment terms, or
important particularly as we head to a ‘new normal.’ costs that are associated with litigation, the also get to
there is a high degree of sensitivity and utmost
This should basically entail the most effective set of preserve a trading relationship with a valued supplier
confidentiality following the lawyers’ professional code
04 Other insignificant delays in payment.
procedures with the aim of preserving the reputation and remedy their credit position with the Credit
in engagement with clients.
of the business as well as good relations with its Reference Bureaus. Conclusion
customers. Further, good debt Collection Strategies
will help a firm take control of its accounts receivable
COVID-19 presents banks, money lenders,
and save time and potential legal hassle down the Amicable debt collection
administrators, entities in general trade and debt
road. strategies post COVID-19 collectors with a unique set of risk management
challenges. In this fast-moving environment, the needs
There is expert consensus that as the world settles into
a ‘new normal’ those involved in collecting debt should the debtor benefits from It is important to understand that the strategies of your customers and guidance from governments
adopted by a business when collecting debts impact may seem to change daily at times. Therefore, there is
be prepared for unpredictable payments based on the saving costs that are not only on the profitability of the business, but also need for proper, efficient and amicable debt collection
ever-evolving economic situation. There is in fact a shift
in consumer and borrower behavior necessitating a
associated with litigation, the the brand and reputation of the business. A good strategies post the COVID-19 period.
debt collection strategy will recover the debt and still
new tact to debt collection that is adaptive to the new also gets to preserve a trading build good relations with customers thus maintaining
challenges. Particularly, there is a need to understand relationship with a valued the image of the credit business. Any debt collection
how this consumer and borrower behavior changes For more information on this, contact
and adopt an empathic yet effective method of debt
supplier and remedy their method used should pay attention to ensure that it
eodhiambo@tripleoklaw.com
does not lead to loss of business in future. Therefore,
collection. credit position with the Credit for an effective debt collection strategy, a firm should
Reference Bureaus. have an effective and documented debt collection
plan for easy implementation.
8 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 9
Congrat
ulat
ions
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JINARO
KIBET Evolution
ON YOUR APPOINTMENT TO: is the Nexus
THE WORLD ATHLETICS between Hedge Funds
GOVERNANCE COMMISSION
and Legal Service
WORLD ATHLETICS HUMAN
RIGHTS WORKING GROUP Providers
P
artner Jinaro Kibet was this year appointed
to the World Athletics Governance
Commission and the World Athletics
Human Rights Working Group. The Governance
Commission provides expertise to the World
Athletics Council and their role is central to the
organisation’s mission to Lead in the sport.
Mr Kibet been an avid ally of the Athletics
fraternity, currently serving as Vice-President of Bryan Mylo | Oscar Mbabu | Fardosa Mustafa
Athletics Kenya. His role in the Human Rights
O
Working Group will see him work with colleagues
from diverse nationalities in formulating
operations, policies and rules towards developing
ne of the harbingers of an evolving financial market is the apparent implementation
a human rights framework for World Athletics. of sophisticated investment strategies by various market participants. With the recent
creation of the derivatives segment of the bourse and the masterpiece of a reverse
merger which brought CBA Bank to the public market through the acquisition of NIC
Bank, the time has come for regulators and investors alike to recognize that Kenya’s financial
market has the necessary stability and maturity to sustain and generate returns from more complex
financial plays.
10 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 11
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This reality is best manifested by the growth of The Legal Profession needs to evolve as well
a nascent hedge fund industry in Kenya whose
complex investment strategies in various verticals In order for the legal profession to contribute significantly to the rise of Kenya’s financial markets, we anticipate that
such as equities, junk and government bonds and Generally, hedge funds are the following evolutionary changes will be essential to legal service providers in Kenya:
commodities, continue to enrich both sophisticated
and retail investors in Kenya. A prime example of special investment vehicles
such a fund is the famed Mansa-X fund, established that pool funds exclusively
in December 2018 which is housed by Standard 01 A different take on recruitment: Diversity in
Investment Bank. The latter consists of a Global Multi
from sophisticated accredited skill and perspective is an essential requirement
for law firms who are eager to create value for
Asset Strategy Fund that invests in the global online investors for the purpose of hedge funds and other sophisticated investors
foreign exchange markets whose primary objective is generating returns irrespective as classic legal practice may not be sufficient.
for the investor to achieve capital growth. In its first year
of trading Mansa-X achieved a formidable, annualized
of the market’s direction. An investment in people with skills such as data
analysis, computer science, economics and
return on investment of 24%. finance could optimize a firm’s capability for
legal support in these areas.
Generally, hedge funds are special investment
vehicles that pool funds exclusively from sophisticated
accredited investors for the purpose of generating In its first year of 02 Adopt technologies that enhance your
efficiency: Speed and efficiency is essential to
returns irrespective of the market’s direction. In Kenya, trading Mansa-X achieved the provision of legal services in the financial
this distinction has not been made and funds can be
raised by both retail and institutional investors. 24% a formidable, annualized
return on investment of
sector. In order for legal practice to find
relevance in financial markets, it is key to invest
24%. in technologies that hasten M&A due diligence,
In Kenya, hedge funds are customarily regulated as contract drafting and other activities.
special collective investment schemes. The latter are
primarily governed by Capital Markets Collective the deductions general partners make on their assets
Investment Schemes Regulations 2002 and the Capital under management. Investors have often felt that risk 03 Invest in the education of your team: Kenya’s
legal education is yet to reflect the considerable
Markets Authority (Market Intermediaries) Regulations is disproportionately shared with the fund in the event
developments in the way of doing business in the
2011. However, in instances where the fund undertakes of loss as they are entitled to a share of assets under
world today. Firms should consider educating
investment activities in the online forex market, the management irrespective of the outcome. Lawyers
their associates through internal training sessions
CMA Online Forex Trading Regulations, 2016 must be should be aware of this pain-point as it may be a cause
on emergent areas of law, attendance of local
complied with. for conflict in investment agreements in Kenya.
and international conferences and invitation of
guest lecturers. Further, specialization is highly
Hedge funds are typically structured as limited liability A major development in the world of finance has been
encouraged.
partnerships, whereby the general partner shoulders the utilisation of technology in the provision of financial
most of the legal liability and risk arising from investing services. Hedge funds, being the elite force of finance
the monies pooled from various investors. The incidence market participants, characteristically emphasise on 04 Understand your clients: There exist several
types of market participants in Kenya’s financial
of the risk upon the general partner is reflected in the quantitative approaches to investment strategies which
markets. With the influx of private equity funds in
fund’s compensation structure and control matrix, require the development of heavy-duty algorithms and
Kenya, foreign direct investments and recently,
whereby the general partner pilots the investment the analysis of vast amounts of financial data in order
impact investors; we are in the midst of exciting
strategies taken up by the firm and receives most of the to derive maximum return on their investments. In no
times. As a profession, we have a responsibility
compensation generated therefrom. Customarily, for singular market vertical is the Kevlar of being right so
to understand the needs of each market player
the immense task of managing the fund’s investment apparent as billions of dollars of values can be unlocked
and service them accordingly.
portfolio, the general partner charges a 2% fee on by a single, correct investment strategy. The reward is
asset under management and a 20% commission on balanced by immense risk as one misstep could cost
gains generated. Through a waterfall mechanism, millions in losses. Thus, the latter coupled with a hyper
funds generated by this structure trickle down to the competitive business environment creates an ideal For more information on this, contact
limited partners who are proportionately compensated market for software companies, who profit from the bmylo@tripleoklaw.com
with their level of success. Recently, these funds’ demand for digital products that increase these funds’
compensation scheme has been under fire due to efficiency and accuracy in their investment activities.
12 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 13
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LAWYER COMMUNITY YOUG LAWYER
OF THE YEAR SERVICE AWARD OF THE YEAR
John Marysheila Leyla
Ohaga Onyango-Oduor Ahmed
A P O
s a legal practitioner, John Ohaga has excelled artner Marysheila Onyango-Oduor is renowned ne of the most promising and talented lawyers
in his practice and set the standard for many a for her focused and solution-oriented service at the firm, Leyla is always at the ready to
young lawyer. Some of the reasons cited for his among her clients and fellow practitioners. Her help and knows nothing less than excellence
win include his reputation for excellent client service endorsement for the Community Service Award was in her work. Her belief on providing access to justice
that has made him the go-to arbitrator, counsel anchored in her spearheading the move to e-filing for is proven through her involvement and growth in
and legal practitioner for many top level local and lawyers in the court systems thus enabling continued the arbitration practice locally and internationally.
multinational corporations. He espouses legal service delivery in the middle of the pandemic Winning the Young Lawyer of the Year Award is a
this doctrine in his leadership as earlier this year. She is extensively involved in the testament to her hard work, humility, and strategic
Managing Partner, championing Law Society of Kenya initiatives nationally and locally, thinking. Congratulations Leyla.
consistent innovation consistently shaping the future of the
and excellence in daily Kenyan legal practice. A sincere
operations both internally congratulations
and externally. This year he Marysheila!
topped it off by reaching
the pinnacle of the legal
practice: attaining the
rank of Senior Counsel.
A big congratulations to
John Ohaga for winning
the Lawyer of the Year
Award.
Large Law Firm
of the Year:
W
e are honoured to have been part
of the Nairobi Legal Awards 2020
hosted by LSK-Nairobi Branch. The
awards gave us a chance to end the year on a
high note with 3 awards and were shortlisted
for the Large Law Firm of the Year. A hearty
congratulations to our winners John Ohaga SC
CArb FCIArb for Lawyer of the Year, Marysheila
Onyango for Community Service Awards and
Leyla Ahmed- FCIArb for Young Lawyer of the
year.
https://lnkd.in/d_bCEYF
#TripleOKLawLLP #nairobilegalawards2020 #celebratingexcellence
14 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 15
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While regtech started with the goal of reducing the
COVER risk of non-compliance it has grown significantly into
STORY something beyond this allowing for creative uses (some
that are consumer facing) within industries such as
Financial services. Regtech uses various technologies
to achieve its goal and these include but are not limited
to: artificial intelligence,
cloud computing, machine learning, augmented reality
and big data. Since it become a buzz word regtech has
had its own sub types that have mushroomed, and
these include:
01 Identity management [Know Your Customer
(KYC), anti-money laundering (AML)];
02 Regulatory reporting;
03 Risk analysis; and
04 Operational risk management.
Regulation Catastrophic events are known to push the human
race to new heights. The dawn of a new technology
regulatory era first came in 2008 after the worst financial
Technology: crisis since the Great Depression was experienced in
the USA. As the scale of the worldwide novel Corona
Enabling More Than Virus pandemic (Covid-19) becames more apparent,
government institutions and private organizations
Compliance Post have embraced technology to ensure the seamless
transition to working remotely and this includes the
The Pandemic implementation regtech. Further, risk and compliance
teams stay above the rising tide of regulation by
Regulatory Technology allows leveraging technology to help solve the challenges of
companies to easily adapt
R
regulatory compliance.
egulation Technology “regtech” first
coined in 2015 as a subset of Financial
to the increasing regulatory Regulatory Technology as a technology allows
Technology “Fintech” has grown into reporting processes. It is companies to easily adapt to the increasing regulatory
its own identity transcending financial economical, secure, ensures reporting processes. The technology is economical,
services and moving into other industries. secure, ensures that process automation is done
Catherine Kariuki | Janet Othero | Michael that process automation is seamlessly, aids in the process of monitoring data and
Regtech focuses on the use of technology
Michie | Nelly Tuitoek to help organisations meet their compliance done seamlessly, aids in the provides simplification of the process of regulatory
necessities. With the use of big data and machine-
challenges. With the rise in complex process of monitoring data
learning technology, Regtech reduces the risk to
requirements set by industry regulators and and provides simplification a company’s compliance department by offering
legal complexities, organisations have had
to find a more sustainable and efficient way
of the process of regulatory data on various activities such as money laundering
activities conducted online; activities that a traditional
to stay afloat throughout this regulatory necessities. compliance team may not have been privy to due to
pressure. the increase of underground online marketplaces in
16 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 17
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addition to the vast amount of data required to be Electronic Transaction Management System to ease
sifted through in order to find the such activities, a task the processing of transactions at the Ministry. The
which is overwhelming. Regtech has now grown with Land Registration Act permits electronic processing of
the aid of advanced technology to help organizations instruments relating to land, and so instruments may
even perform forecasting a process which enables be both processed and executed electronically. Finally,
them to predict future risks of non-compliance to one of the most conservative yet sensitive industries
accurate levels. accepted and implemented the use of tech in its
processes in order to achieve improved public service
delivery.
The Paradox Of Compliance
Regtech will soon be implemented throughout PHP
various institutions in order to implement the Data C++
The battle between risk and reward is one that is JAVA
endless. We tend to create a nexus between the Protection Act (“the DPA”) 2019 that was assented to
increase of risk with an increase in potential reward. at the height of the debate on protection of personal
Compliance is generally perceived as a hinderance data and the promotion of innovation. Based on the 0110100101011 0
to potential revenue generation. However, Regtech General Data Protection Regulations (“GDPR”), the
undertakes to relieve the burden of compliance Act navigates through provisions, classifications and
therefore improving insight and yield to organizations rules that give effect to Article 31(c) and (d) of the
allowing for more calculated risks. The technology Constitution of Kenya. The DPA establishes the Office
incorporated in companies’ internal and external of the Data Protection Commissioner; makes provision
controls is as a result standardized and automated with for the regulation of the processing of personal data;
workflow management systems. Some of the internal provides for the rights of data subjects and specifies
control mechanisms that need to be in place to detect, obligations of data controllers and processors. This
prevent, and correct compliance issues in companies will be accomplished through the implementation of
include published standards and policies, documented Regtech that quickly separates and organizes cluttered
procedures, training, monitoring and the undertaking and intertwined data and sorts through extract and
of internal audits. Regtech in external compliance transfer load technologies. Regtech can also be used
is applied through platforms such as fulfilment of to generate reports quickly.
In addition, companies ensure external compliance by The Element Of Convenience For
guidelines, policies and government regulations which
implementing various regulations such as the Central
have been utilized to stimulate technological change
Bank of Kenya (CBK) Prudential Guidelines, Capital Law Firms
in government institutions and organizations.
Markets Authority (CMA) rules and regulations such
as the Capital Markets (Online Foreign Exchange Regtech offers law firms and in-house counsel teams
The risk-reward paradigm might one day become a the opportunity to transform the trusted advisory
Trading) Regulations, 2017 which seeks to monitor
reward-risk paradigm where organizations aided by role, and legal professionals are embracing the shift
Regtech use this technology to improve the quality of
Regtech in external internet based trading systems through which
toward more collaborative relationships within the
foreign exchange trading is conducted, Competition
service and/or goods they offer to the market allowing compliance is applied through Authority of Kenya (CAK) guidelines on Consumer regulatory ecosystem. While the global financial crisis
them to focus more on creating value for consumers platforms such as fulfilment protection and mergers and acquisitions and the demonstrated a system is only as strong as its weakest
and innovating and less on the hurdles of compliance. link, collaboration around Regtech development
of guidelines, policies and Communication Authority’s sector regulations. Other
ensures all players work together to strengthen the
regulations that have ensured the implementation and
Recently, with the implantation of the Business Laws government regulations which the use of Regtech include the Elections (Technology) system as it continues to evolve.
(Amendment) Act, 2020, lawyers have embraced the
use of e-signatures in the registration of documents
have been utilized to stimulate Regulations, 2017 under the Elections Act and the
Elections Amendment Act which provides for the The attack on many Wall Street law firms forced firms
which may now be kept in electronic form as per technological change in use of the integrated electronic electoral system that to improve their overall cybersecurity hygiene and
the Registration of Documents Act (“the RDA”) government institutions and included biometric voter registration and the Movable practices, which resulted in a lower than average
and stamping documents by marks embossed or amount of nuisance cyberattacks as compared to
impressed by electronic means as per the Stamp
organizations. Property Security Rights Act of 2017 that provides for
other industries like healthcare, manufacturing, and
new forms of property to be offered as security by
Duty Act. Furthermore, the Ministry of Lands and energy. In Kenya, law firms are tasked to evaluate
borrowers other than the typical and conventional
Physical Planning announced the upgrading of the their clients through a system characterized as Know
immovable property types.
18 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 19THE ABOVE STANDARD THE ABOVE STANDARD
Client
if institutions make wrong vendor selection or fail to
utilize the solution to its potential. Legal professionals
need to upskill into compliance and leverage Regtech
Client Service
as their tool of trade to aid organisations meet
In Kenya, law firms are
complex regulatory requirements. Legal professionals
tasked to evaluate their will soon be feeling the competition from non-legal
clients through a system organisations leveraging Regtech to provide solutions
Portal Launch
for organisations.
characterized as Know Your
Clients programs (“KYC”) to The aim of a high performing compliance system
combat money laundering is not only to meet obligations, but to create value
for the business. Law firms and legal teams have an
and other fraud related risks in opportunity to transform their role using Regtech
financial transactions involving beyond it being a compliance system and create new
clients. niche markets and market players.
DOC
STORAGE
For more information on this, contact
tmt@tripleoklaw.com
Your Clients programs (“KYC”) to combat money
laundering and other fraud related risks in financial
transactions involving clients. The implementation of
PROGRESS
KYC requirements became a statutory requirement in
Kenya after the Proceeds of Crime and Anti-money REPORT FEE
Laundering Act was passed in 2009. NOTE
As the year 2020 ends, companies recognize the UPLOAD
demand for governance, regulatory, and compliance
(GRC) software. Studies have shown that regtech
DOWNLOAD
solutions could lead to a 600 percent return on
investment with a payback period of under three years.
TripleOK Law LLP has implemented various tools to
aid in its compliance to various laws and regulations
such as data minimization and improved KYC systems
and policies. Law firms and legal service providers have
T
also embraced Regtech as not just an internal tool but
as a service offered to their client allowing the client to he client portal is designed to improve the client experience
focus on their core business and leave the regulatory and efficiency, allowing for our clients to track progress of
compliance to the law firm. matters, track fee notes, download documents and get reports
that show insights into the practice areas the firm is handling.
Conclusion The portal also seeks to reduce the turnaround time of getting
feedback from an advocate and improve transparency for the client.
Regtech players in the market are increasing
exponentially especially in the areas of identity Reach out to our IT team for your onboarding session on the email:
management and control, general compliance and
monitoring. Choice can become counter-productive cp@tripleoklaw.com
20 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 21THE ABOVE STANDARD THE ABOVE STANDARD
embrace technology to ensure continuity during the pandemic period. As part of the effort
to build resilience, educational institutions adopted online-based instruction methods across
various media. Many organizations and businesses accommodated remote work arrangements.
AI
Legal Issues arising from the use of
AI
AI is a series of underlying The use of AI involves the designing, building, using
and evaluating cognitive computing and machine
technologies such as learning to improve the management of services. This
machine learning and ultimately advances the decision- making process in
predictive analysis that can designing and implementing policies and associated
governance. Entities with big data apply AI and
be brought together within machine learning technologies to harness synergies
The Adoption a cloud-based environment
to store and process huge
and innovate within their operations and processes.
of Artificial Intelligence (Ai)
As the Kenyan economy is increasingly propelled by
amounts of data so that data-centric businesses that leverage on AI, there are
machines can perform certain key legal issues that the stakeholders should
by Kenyan Entities: Pertinent sophisticated tasks without consider.
the assistance of humans. 01
Legal Issues
Government and Regulators should adapt
existing regulatory frameworks to cater for AI,
where possible. For certain types of AI, it may be
necessary to create some form of system where
these can be registered. In 2018, the Kenyan
government through the Ministry of Information
Artificial Intelligence (AI) has played an important role in Communication and Technology set up a task
enabling this shift hence the need for its consideration force to develop a strategy for encouraging the
and adoption for both private and public entities in adoption of blockchain and AI in Kenya.
Kenya. Its adoption is also important and ultimately
inevitable in the face of the global fourth industrial 02 Legal rights and duties: These arise around
revolution gradually taking place through disruptive property law where questions on whether the
technologies. AI is a person or personal property. The issue
Catherine Kariuki | Joyanne Njau | Lucy Mwaura of who owns the AI should be addressed in any
AI is a series of underlying technologies such as related contracts. Further, AI systems are not
machine learning and predictive analysis that can be agents in any legal form and do not possess any
P
brought together within a cloud-based environment legal personality.
rior to the COVID-19 pandemic, both the public and private sectors were already on a path
to store and process huge amounts of data so that
to increased adoption of disruptive technologies like AI, cloud computing and blockchain
to harness certain advantages. From March this year, when the government announced
machines can perform sophisticated tasks without the 03 Data Protection and privacy: Following
assistance of humans. Through AI, machines can learn, enactment of the Data Protection Act, 2019,
certain restrictions, organizations, whether small or large, have been increasingly finding there are certain restrictions around the use of
reason and provide solutions to problems by relying on
new ways to operate efficiently and ensure that the needs of customers and employees are met the data fed to them. automated decision making. Further, certain
while strictly observing the various COVID related regulations including social distancing, self- conditions must be met when processing
isolation and quarantine measures. For instance, as part of the response to the health crisis, many In the Kenyan market, almost every facet of the fin-tech data that falls under the category of personal
governments, and private hospitals in high- and middle-income economies quickly embraced industry makes use of AI or blockchain technologies to information. There are also minimum
online healthcare to provide solutions. Likewise, other industries in the economy were quick to harness efficiency and improve end user experience. requirements relating to protection of personal
22 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 23THE ABOVE STANDARD THE ABOVE STANDARD
(b) Align business processes to existing data (c) Use of different techniques like encryptions,
protection laws and best practices to secure hardware and multi-party computation
ensure that leveraging on AI does not for end-to-end protection can help in preventing
expose entities to breach of personal retrieval of data by third parties. The government
data protection laws. This requires an must accelerate building enabling infrastructure
intelligent system that automatically and digital connectivity across the country.
Through AI, machines can learn, creates links, sorts data and provides This will make it easier for government to
required data in edited form that does invest in e-government solutions and gradually
reason and provide solutions to not expose a subject to profiling. Data shift online to interact with individuals and
problems by relying on the data protection and data innovation have businesses. Private entities likewise should focus
opposite premises in that the former on digitization and upgrading the skillset of
fed to them.
requires a clear and defined purpose for their workforce to ensure maximum adaptability
processing of data and the latter is based within institutions.
on exploration of data to find purpose
and function properly. Thus, due to the (d) The efforts in developing digital government
conflict of the two concepts it may lead strategies after the COVID-19 crisis should focus
to the violation of the right to privacy of on improving data protection and digital inclusion
their customers and the provisions of the policies as well as on strengthening the policy
Data Protection Act, 2019 (DPA). Entities and technical capabilities of public institutions.
can effectively resolve this issue by: We recommend public-private partnerships as
they are essential for implementing innovative
(i) Coming up with mechanisms to technologies. However, we recognize that
provide data subjects and data government leadership, strong institutions and
controllers with the means of effective public policies are crucial to tailor
defining the purpose of information digital solutions to the countries’ needs as well
gathering and sharing. as prioritize security, equity and the protection
data. This hurdle should be addressed when How entities can navigate the of people’s rights. The COVID-19 pandemic
designing the AI. (ii) Using technical measures to has emphasized the importance of technology,
legal issues
enforce the use of data acquired and its success depends much on an effective,
04 Intellectual property and proprietary rights:
01 Use risk-based approaches in the adoption
from a data subject only for the inclusive and accountable government.
As use of AI facilitates innovation around the way defined purpose. This can be done
of AI to calibrate data controller’s obligations
of doing things, issues surrounding patentability by combining AI and blockchain (e) Entities must differentiate themselves based
on privacy and personal data protection. The
and ownership rights which were not anticipated technology. Blockchain and its on AI-driven insights. It is pivotal for them to
combination of anonymized and pseudonymized
by the traditional IP law may arise. For instance, ledger can record all data and understand that while making full use of AI is
data puts at risk personal information being
key questions surrounding copyright ownership variables that go through a decision an ongoing journey, making AI and machine
capable of retrieval by third parties thus the use
in works generates by AI systems should be made by AI. learning an integral part of their solutions is a
of tools to assess and prevent such risks are very
addressed by contracting parties where one necessary venture.
important.
outsources services to develop and AI system. (iii) Implementing risk-based approaches
The relationship may give rise to an assignment to calibrate data controller’s It is not in doubt that AI will continue evolving and
or License arrangement. 02 Additionally, to enable successful use of AI in
obligations on privacy and personal the stakeholders will always be playing a catch-up
these entities they must design and implement
data protection. role. To keep up with the speed, stakeholders must be
policies that promotes the collaboration of
05 Rights and Liabilities; This mostly surrounds
skilled workforce, risk management frameworks,
cognizant of the legal issues, arising from harnessing
product liability in relation to the owner and the (iv) Use of risk and mitigation of AI, to effectively navigate any hurdles and mitigate
secure systems, and modern technologies.
user or third parties. For mobile AI, issues such as mechanisms increasingly in an any risks while achieving any organizational strategies.
nuisance and trespass and other torts may arise online and automatic fashion in
and need to be anticipated by the designers and 03 Data protection:
order to react to changing the risk
owners of the AI system. In a contract context, levels during operation and use of For more information on this, contact
(a) Invest in good data governance and
unwanted outcomes and remedies to follow personal data. tmt@tripleoklaw.com
privacy policies in the entities to comply
should be addressed by the terms therein.
with the applicable data protection laws.
24 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 25THE ABOVE STANDARD THE ABOVE STANDARD
LEGAL AWARENESS WEEK
DAY 05
P A N E L I S T
Janet Othero
PARTNER TMT
ACCESS TO JUSTICE THROUGH
THE USE OF INFORMATION
COMMUNICATION &
TECHNOLOGY (ICT)
ICLG Publication
https://iclg.com/practice-
areas/international-
arbitration-laws-and-
regulations/kenya
26 MAY 2019 TRIPLEOKLAW.COM MAY 2019 TRIPLEOKLAW.COM 27THE ABOVE STANDARD 28 MAY 2019 TRIPLEOKLAW.COM
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