Use compliance management to build trust
Digital whistleblowing systems for the subscription business
by Dr. Thomas Altenbach
Especially in business models with recurring payments, trust is the “bread and butter”. Once customer relationships are destroyed, it is difficult to repair or rebuild this loyalty.
It is therefore crucial that customers, partners, suppliers and their employees trust the subscription-based business model as much as the employees within the company. This vital trust can be strengthened and promoted through a well designed compliance management and a corresponding whistleblower solution.

Guest author: Dr. Thomas Altenbach
Founder and CEO of LegalTegrity
Creating trust with compliance management
In the exponentially growing subscription market in the DACH region (source in German: billwerk Subscription Industry Report), the business models are often cutting-edge and innovative. A prerequisite for innovation is a transparent culture, a required and encouraged culture for feedback and mistakes (also known as “trial and error”).
Interestingly, the market development shows that it is no longer just the start-ups that are growing the subscription market. Quite the opposite: more and more medium-sized and large enterprises are working on their business models and adapting their strategy with recurring revenues. Understandable, because the pressure from the market to be an innovative company is immense.
All subscription businesses have one thing in common: they live on the assumption that customers will remain loyal for a long time. This requires not only a good product and strong customer relationships, but also loyal employees who are interested in the company growing organically, improving continuously, and maintaining its good reputation.
Compliance in times of crisis
German SMEs in particular are in the middle of this upheaval of digital transformation and the accompanying challenges in processes and culture. An important part of the challenges that is often underestimated is the issue of compliance.
Especially in times of crisis (such as the current Corona pandemic) and phases of change (digital transformation), companies must encourage integrity, compliance and transparency in order to not only minimise the risk of illegal behaviour within the company, but also to (re)establish trust within the company (source: weforum). Otherwise, the liability risk of the management increases into uninsurable spheres.

But once the good reputation is ruined…
As we all know, it takes a lot of time and effort to build a good reputation as a company and to gain and keep the trust of your customers. But losing your reputation can happen in seconds. The headlines of corporate scandals that we hear about again and again in the media have not escaped anyone. Companies like Facebook or VW survive such things. But for small and medium-sized companies, it can mean their end. Of course, this is just as true for subscription businesses, or for those in particular. Warren Buffet once rightly pointed this out: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Whistleblower systems, the cornerstone of compliance management
Every company has very individual processes and issues where something can potentially go wrong. Depending on the industry, target group and business model, the problems can look very different. This brings us to a very important point: employees naturally know their company very well and every employee can be a whistleblower. But what if this tip does not end up in the press, but first in the company? Then whistleblowers are “pulse meters in the company”. They know exactly where things are going well or where a company may need to make improvements. Irregularities come to light through the use of reporting channels and the company can actively take countermeasures before a reputation-damaging scandal ends up in the press. (German Source: FAZ article from 21.02.2021) For this reason, the core of compliance management in a company is a whistleblower system, which enables whistleblowers to report anonymously and save the company a lot of money. Whistleblowing is an opportunity for companies and employees alike.

At this point, the loop must be brought back to the initial topic of trust and culture, because corresponding tools, such as digital whistleblowing systems, only bear fruit when they are actually used. For this, every company must actively educate about whistleblowing as part of its compliance management, make processes transparent and promote a speak-up culture.
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Need for action: the EU whistleblower directive
Regardless of the obvious relevance of digital whistleblowing systems for the sustainable success of subscription businesses, there is actually also an acute need for action due to the new EU Whistleblower Directive, which applies to all companies in Europe with 50 or more employees. By December 2021, all European member states must have translated the directive into national law. The Whistleblower Directive obliges the affected companies to provide their employees with an anonymous reporting channel through which they can submit written and oral reports of internal misconduct. (More details on the Directive and its implementation in the company in LegalTegrity’s German blog post).

More about Dr Thomas Altenbach
Thomas is the founder and CEO of LegalTegrity. In addition to his work for the LegalTech startup, Thomas is a lawyer at the commercial law firm AC Tischendorf in Frankfurt a.M. Previously, he worked for many years at Deutsche Bank AG and Daimler AG in their legal and compliance departments in various management functions. As a compliance specialist, Thomas is one of the leading advisors on the topics of compliance and corporate liability, conceptual design and implementation of compliance management systems, antitrust compliance, and implementation of legal tech tools with artificial intelligence.
Thomas heard the question “What do we really need?” from many small and medium-sized enterprises that were unsure how they could efficiently meet the compliance requirements of corporations or the public sector. As a lawyer in international corporations and advisor to medium-sized companies, he became one of the most sought-after compliance specialists.
In numerous companies, he was able to personally experience how the introduction of a whistleblower solution helped to increase transparency and reduce violations. His clients appreciate his focus on suitable, simple, and implementable solutions.
More about LegalTegrity
LegalTegrity is the digital whistleblowing solution for small and medium-sized enterprises. The Frankfurt-based legal tech company was founded by compliance professional Dr Thomas Altenbach (CEO), organisational development specialist Pia Michel (COO) and Maraja Fistanic, MBA (CMO), an expert in marketing in the legal industry. The software-as-a-service product is available as a plug & play solution immediately after booking without complex IT integration and its functionality and pricing is geared towards medium-sized businesses. The application for the protection of whistleblowers is EU-DSGVO-compliant and secure in the Deutsche Telekom Cloud. It is very user-friendly and multilingual and guarantees one hundred percent anonymity. LegalTegrity can be used from any device with internet access. The SaaS solution is also available as a white label option.
Whistleblowers can help companies to uncover internal misconduct, minimise risks and avoid fines and sanctions. They therefore not only help to protect the company from financial damage caused by compliance incidents, but also prevent the loss of reputation of the respective company.
Employers who use LegalTegrity’s software solution to protect whistleblowers are setting an example for a working culture characterised by integrity and transparency. Employees no longer need to fear possible repression if they can simply report misconduct anonymously online. For the employer, this increases the chance that misconduct will be reported more quickly and more frequently and that damage to the company will be prevented. Both make the company more attractive as an employer and ensure sustainable business success.