[00:00:00] Alex Pillow: I think the people that truly understand what risk-based approach means are then able to use their particular traits, whether it be the passion and the extroversion, whether it be the detail or it may be deep subject matter knowledge or just great management skills, whatever their particular superpower is, if they’ve understood that principle and they can apply it, then they can use the rest of their talents to to make that happen.

[00:00:23] Voiceover: Welcome to Supply Chain Now the number one voice of supply chain. Join us as we share critical news, key insights, and real supply chain leadership from across the globe. One conversation at a time.

[00:00:35] Scott W. Luton: Hey, good morning, good afternoon, good evening, wherever you may be. Scott Luton with you here on Supply Chain Now. Welcome to today’s show, folks. We have got quite the conversation teed up today. Now, as much as I think that the global supply chain industry can teach other sectors, right, I’m a big believer of that. I certainly think supply chain professionals can learn powerful and actionable and innovative ideas from other industries as well, and that’s happened a lot over the course of history, right?

[00:01:02] Scott W. Luton: All of that is a big theme of today’s show. We’re gonna be exploring the KYC, you know, we love our acronyms. That is know your customer space. Hey, what is it? What are some of the top challenges and developments there, especially those that are highly relevant to global supply chain. So all that and a whole bunch more.

[00:01:21] Scott W. Luton: So stick around for a great conversation that’s gonna offer up, again, actionable insights by the truckload. So let’s welcome in. Our wonderful guest here today, Alex Pillow serves as senior director partnerships and acquisitions with Moody’s. Now most folks know Moody’s, the global organization that’s on a mission to be the leading source of relevant insights on exponential risk.

[00:01:43] Scott W. Luton: But Moody’s is also well known for credit ratings, economic research, and a whole bunch more. Now, Alex has served in a variety of interesting leadership roles for years within the Moody’s ecosystem, and currently Alex and his team are focused on business and pricing strategies, growth and partnerships, and a whole bunch more.

[00:01:59] Scott W. Luton: Now, Alex leverages his ex, his expertise on end-to-end, KYC. Stay tuned more on that compliance transformation, preventing financial crime and a whole bunch more to help fuel organization success around the world. And he hosts a really cool podcast. You gotta check out KYC Decoded, which I had a blast joining a little while back, Alex Pillow.

[00:02:22] Scott W. Luton: Great to have you with us here today. How you doing?

[00:02:25] Alex Pillow: Yeah, very well, thanks Scott. And yeah, delighted to be on a show that I listened to throughout my parental leave period when I was trying to get educated on supply chain. Outstanding.

[00:02:35] Scott W. Luton: Well, we appreciate that. It’s great to connect with you. I admire the great work you and your team are doing in your part of the world over in the, the really big Moody’s universe.

[00:02:43] Scott W. Luton: Mm. And you do great work with that podcast. You’re about to celebrate your 100th episode, is that right? Creeping

[00:02:49] Alex Pillow: up to creeping up to it. I’m not sure if it’ll be end of this year or part of the early part of 26, but we’re, we’re on track.

[00:02:56] Scott W. Luton: On track. That’s right. On track, on time in full. Uh, well that’s gonna be a great anniversary.

[00:03:02] Scott W. Luton: We’re gonna celebrate with you. We all know how challenging it is to put out great content that’s relevant and that helps people on a regular basis. It’s a lot of work, and you’ve got a lot more stuff you do at Moody’s beyond the podcast, right?

[00:03:15] Alex Pillow: Yeah. I I often have to remind people that it’s very much the side gig to my gig.

[00:03:20] Alex Pillow: Somebody did stop me in the elevator one time and they recognized my voice and said, oh, you the guy who does the podcast? Yeah. That’s, that’s me. And. They went, is that your whole job? That’s so cool. And I was like, oh, oh, I wish, uh, no, it’s uh, it’s saying that we’ve managed to squeeze in after I did one for a friend, you know, external to the company.

[00:03:39] Alex Pillow: And then when they were looking for a host at Moody’s, someone said, Hey, Alex has done it before and four years later we’re still going. And I was having a lot of fun doing it. Meet some really, really interesting people. Learn a lot from them. And I think you said it’s hard to put out great content. It’d be very easy to put out bad content, but to really take the time to make sure that people are gonna benefit from it, I think is, well, we’re very lucky that we’ve got a a team.

[00:04:04] Alex Pillow: We’ve got a very talented producer, mark Rundle. We’ve got some fantastic marketers. We’ve got various people within Moody’s that have connections that can bring us the great guests. So I’m just the guy that gets to ask the questions.

[00:04:16] Scott W. Luton: Love it. Well, you do a great job at that and you got a great team behind you.

[00:04:19] Scott W. Luton: And you’re right. You know, we could, you. Get chat GPT involved and crank out all sorts of meh content if I said that right for my kids. Uh, you know, easily. But, um, the human touch, I think, in relevant consequential content is so important, supplemented by maybe ai. But anyway, we’ll save that debate for later.

[00:04:41] Scott W. Luton: Let’s talk about, we’re gonna talk about your role at Moody’s. We’re gonna talk about KYC and, and what it means and, and, and parallels with global supply chain a whole bunch more. But I wanna start with, you’re currently training Alex. For a big marathon. Tell us more.

[00:04:55] Alex Pillow: Yeah, I’ve got a, a marathon in about six weeks and now up in the city of York, an American friend of mine did say to me, that’s so cool, you’re doing New York?

[00:05:02] Alex Pillow: And I went, no, no, no. The original, uh, small city up in the north of England in about six weeks. I basically, I had my firstborn, uh, child this year. I know you obviously knew that was coming. So last year I used to do some rugby, some CrossFit, some running races, some HYROX and anything that, you know, I could get some competition from.

[00:05:21] Alex Pillow: And this year I knew I wasn’t gonna be able to do that. ’cause you know, we’ve got a, another full-time job alongside the day job. And so I just went, let’s have one big race that I’ll build towards and can just sort of, there’s been lots of trading runs at 9:00 PM 10:00 PM There was one time at midnight, ’cause that was the only time I got that day.

[00:05:39] Alex Pillow: But it’s been a good thing to just have that slight distraction from the office and have a little bit of me time. Once, uh, once my son’s asleep. Love it. And

[00:05:49] Scott W. Luton: what is your, I’m not sure how marathons work, but do you have, I know you just want to finish it, which is an accomplishment, but do you have a certain, do you wanna be in the top 25th percentile or how, how do you measure like overall performance?

[00:06:02] Scott W. Luton: Sure.

[00:06:03] Alex Pillow: I, so I have a, a whiteboard in my garage, um, which has a list of various distances and weight lift, you know, weights that you can lift and different movements where I have certain goals for each of those that I want, right. Like nothing to do with anyone else in the world. Doesn’t go on any social media or anything like that.

[00:06:21] Alex Pillow: It’s just if I hit that then I’m happy and I move onto the next thing. ’cause I quite like my variety. So I do have a, a target. It run’s one of my better things. I’m so, it’s a reasonably good percentile. But I always say to people who go, oh that, oh my God, that’s so hard. I’m like, there’s a bigger gap from me to the.

[00:06:38] Alex Pillow: Truly elite people, the Kipchoges of the world than there is from me to the average. So it’s all relative.

[00:06:44] Scott W. Luton: It is all relative as everything else in life it seems. But we, we look forward to pictures. We look forward to hearing about where you placed and how you finished, and, uh, kudos. Uh, that’s a, a, sounds like a great element of your overall health journey.

[00:06:57] Scott W. Luton: And it helps, I bet it helps de-stress with the normal stress that comes along with just living life these days, huh?

[00:07:03] Alex Pillow: A hundred percent. And somebody gave me a tip a couple of years ago. They said, quit the headphones. And I was like, really? Like, do you not get bored? And they were like, just quit the headphones.

[00:07:12] Alex Pillow: Trust me. So in incredible amount gets worked out and, you know, dealt with by the end of a, you know, one or two hour run. When you don’t have music blasting or, okay. I occasionally there might be a podcast that’s just Supply Chain Now that I need to listen to. But, uh, when I don’t need to fit that in, then I, I, I go about, and I’m quite lucky where I live outside of, outside of the London area, it’s more green space out where I am.

[00:07:38] Alex Pillow: So there’s plenty of country lanes and just nice scenery when it’s not raining. But uh, you have to take your moments. That’s right.

[00:07:46] Scott W. Luton: Country lanes. That just sounds like such a, uh, paint such a picture. Well, we got a lot to get into, uh, but I’m gonna revisit that country lanes image in my mind regularly.

[00:07:56] Scott W. Luton: All right. So a lot of folks know Moody’s, right in the news, in the research space. Of course, all the ratings and econometrics, I’ll call it, and a whole bunch more as we, as we look to try to, uh, at least in part, optimize our risk management, which is so important these days. Of course, that’s part of the name of the game when it comes to global supply chain.

[00:08:16] Scott W. Luton: But would you share for those that may be new to Moody’s. Just level set with us on the organization and your current role

[00:08:23] Alex Pillow: there? Yeah, absolutely. So Moody’s, as you say, world famous and over a hundred years of history and credit ratings and really the brand in that space. But about 17, 18 years ago, uh, they started what they called Moody’s Analytics.

[00:08:39] Alex Pillow: And within that business, which is sort of separate from the ratings agency in a number of ways, lots of compliance training to make sure you don’t, you know, share the wrong things between each other, et cetera. We have data, we have analytics, and we have software, and we serve different functional areas, different use cases, all sorts, you know, pretty much every industry that you can think of.

[00:09:00] Alex Pillow: But the real rallying cry, I guess, for lack of a better term, is to be the preeminent. Provider of what we call integrated risk assessment. And the idea really is that you can’t really just think about credit risk in a silo or supply chain risk in a silo or financial crime risk in a silo or cyber risk or environmental risk and so on and so on and so on.

[00:09:22] Alex Pillow: It’s all of these things are interconnected and it’s only when you can see the whole picture that you can make the best decisions for your organizations, whoever they may be. So that’s the part of Moody’s that I’m a part of specifically at the moment. As you mentioned in the intro, I’m looking after a small team that we call partnerships and acquisitions, where we look at those that may have some of those risk insights that we might not.

[00:09:45] Alex Pillow: Or potentially have technology that we might not, but need our risk insights and how can we bring those things together? And of course, if there’s one where it makes sense, then we have some wonderful colleagues in our corporate development team that we will say, look, we’ve, we think we found something.

[00:09:59] Alex Pillow: You should take a look at this. And vice versa, if they think they found something that could become part of the Moody’s family, we’re often sort of first gatekeepers to, ’cause you can kind of figure out if s’s a good partnership, then it might make sense to maybe explore getting married at some point.

[00:10:14] Alex Pillow: Um, no, you have your lots and lots of dating, right? You talk to lots of companies, then you maybe go, you know, go in relationships with some of them, but at some point you might want to get married and make it official.

[00:10:25] Scott W. Luton: I like it. I like it. And I bet you got some great stories to tell from this current.

[00:10:29] Scott W. Luton: Now you’ve been, you’ve had a variety of leadership roles though, as, as you’ve kind of. Worked through your Moody’s career,

[00:10:34] Alex Pillow: right? Yeah. I mean, I think Moody’s has offered some tremendous opportunity. I was part of a company they acquired in 2020, which was a medium sized company, very, very focused on its niche of, of name screening, where we’d check companies and people for sanctions risk, political risk, and what we call adverse media.

[00:10:53] Alex Pillow: So things that might be criminally relevant that particularly a bank or a financial services company would need to know or potentially other types, types of company that also need to know those things sometimes. So I was in that and I was always an individual contributor, but would work across a number of departments just ’cause I was a bit of a, I guess for lack of a better term, I’m a good generalist.

[00:11:13] Alex Pillow: Oh, I like to think generalist. But within Moody’s, there’s so much to do that Yeah, there’s. Those good generalists, right? I’ve had the opportunity to to then lead multiple specialist teams and really try and make sure those things come together and, and serve our customers and serve other stakeholders in Moody’s as well.

[00:11:27] Alex Pillow: So very fortunate for the opportunities they’ve provided. Certainly in a company that size, it’s never down to one team of us and it’s, uh, a huge team effort.

[00:11:36] Scott W. Luton: Well, uh, I’m thankful for all the specialists out there and I’m also thankful, equally thankful for all the generalists out there. ’cause you need both.

[00:11:45] Scott W. Luton: You really need both. Uh, and by the way, going back to, as you were describing, the Moody’s mission, holistic risk. Holistic risk. And the cool

[00:11:54] Alex Pillow: thing about, sorry, I’m gonna, I’m gonna correct you, Scott, integrated risk assessment, otherwise, Brandon are gonna tell me I did wrong.

[00:12:01] Scott W. Luton: Oh, okay. Integrated risk assessment.

[00:12:03] Scott W. Luton: Lemme use those right words, but in the way I’m perceiving how we identify and make visible. Risk in all of its forms is so critical. And the cool thing is here in the golden age of of technology, but certainly the golden age of supply chain tech, being able to see around corners and, and see through walls, I’ll call it.

[00:12:24] Scott W. Luton: It’s amazing what we’re doing and it’s amazing what it’s making. The previously invisible visible and it’s really strengthening our decision making, it’s strengthening our, our ability to mitigate all the risks that just is inherent with doing business, no matter how safe of a business or industry you may be in.

[00:12:43] Scott W. Luton: And certainly planning, planning, planning much more effectively. So Alex, I gotta ask you though, this KYC Yes. Right. Know your customer now. I bet we’ve got a chunk of our audience. And folks, I’m with you. I wasn’t in the know when it comes to KYC, I had to learn from Alex, but I bet we’ve got a chunk of our audience, the smartest audience, solve a global supply chain that’s just thinking like, what the heck is KYC?

[00:13:07] Scott W. Luton: So I wanna ask you, what is it and why is it really critical?

[00:13:11] Alex Pillow: Absolutely. I mean the acronym itself know your customer very much comes out of the financial services, you know, landscape, right? So they did. If you’re gonna provide financial services to somebody, you have a number of obligations that you need to meet to make sure that you’re allowed to do that by the law.

[00:13:28] Alex Pillow: The whole set of processes behind that have been wrapped under this term Know Your Customer or KYC, and it really form forms part of the anti-money laundering obligations of those financial services companies. The interesting thing is you could also probably just call it third party due diligence.

[00:13:45] Alex Pillow: ’cause that’s what it is. It is a. Doing the relevant research and, you know, checking against particular risk types for a given third party, whether that be a person like you or I applying for a credit card or a mortgage or something like that. Or if a, you know, a business going for a, whether it be a loan, whether they’re trying to be a supplier to another company, there’s gonna be some due diligence.

[00:14:04] Alex Pillow: So you can call it KYC, you could call it TPDD, third party due diligence. Okay. Um, hang on, Alex. Yeah. Are you gonna get in trouble with Moody’s

[00:14:12] Scott W. Luton: and the

[00:14:12] Alex Pillow: powers that be by saying third party due diligence? Well, our preferred phrase these days is third party risk management, TPRM. Mm-hmm. Uh, but frankly, I think, you know, I, I like to just call it what it is.

[00:14:25] Alex Pillow: And then, and then you use the acronyms once you’ve got some familiarity to save on the, uh, keypad strokes. Love it. I

[00:14:32] Scott W. Luton: love how you think in that regard. You know, cliches become cliches for all the right re for mostly the right reasons, but sometimes if we start, start and stop with the cliche, we don’t get to the root.

[00:14:45] Scott W. Luton: The accurate meaning. Mm-hmm. And just what we’re talking about. So I appreciate your willingness to break that down. And so most folks will understand why all that’s critical, whether you call it KYC or you call it third party due diligence, or you call it third party risk management. But why, in your view, why is all of that, no matter how you define it or call it, why is it especially critical?

[00:15:08] Alex Pillow: Ultimately, if you don’t truly understand who you are transacting with doing business in any sense of the word, then how do you know that that business was right to do, safe to do, and is business you want to continue to do, right? Like it might be that something is against the law, so it’s just out. You can’t do it.

[00:15:26] Alex Pillow: Something is sanctioned, for instance, given all the geopolitics of the day. You can’t do it. You just need to know so that you don’t get in trouble yourself. It might be that there’s something that goes against your firm’s values, right? Like and you’d wanna know that and you need to have done that due diligence to figure that out.

[00:15:42] Alex Pillow: And it also might be that you are looking into a company and say, well we could do the transaction this time, but it doesn’t have a lot of long term prospects. And every company only has finite resource, right? So like where do we want to put our, our efforts? So I think there’s all those factors that you have to think about.

[00:15:59] Alex Pillow: So do you know who you’re doing business with? Do you know the risks of doing business with them? And then are you able to manage that at that integrated holistic level that we are talking about? All of those things is, is why I think it’s so important and why it’s sort of foundational really to, to any business.

[00:16:16] Alex Pillow: ’cause what is a business about its relationships. That’s right

[00:16:20] Scott W. Luton: Alex. Well said. And you’re already answering ’cause you’re a clairvoyant. At least in part my next question. Because a lot of what you just described, when we think of the supply chain ecosystem, we’ve got to approach it with holistic or integrated risk across the system.

[00:16:35] Scott W. Luton: Mm-hmm. Every entity, every party. ’cause you know, those, our supply chain ecosystems are only as strong as that proverbial weakest link and whatever. We don’t know about every entity in that ecosystem. And there’s a lot of, you know, we’re still making progress with, and we still have some big challenges when it comes to full ecosystem visibility.

[00:16:55] Scott W. Luton: Mm-hmm. But it’s what you don’t know that can bite you and shut down supply chain, shut down factories and, and ultimately let down our customers, which we want to always avoid. What parallels do you see from KYC to supply chain management?

[00:17:10] Alex Pillow: So I think. The thing is the supply chain risk management, as, as my colleagues that, you know, specialize in this, have been talking about it, is it starts with that third party due diligence, right?

[00:17:23] Alex Pillow: You are onboarding a supplier or monitoring your existing suppliers for potential risks. And so whether you call it KSC or TPDD or TPRM, it starts with that, but you just have another set of criteria that are specific to your supplier risks that you’re assessing. So like the crossover, there is almost a perfect Venn diagram.

[00:17:43] Alex Pillow: It’s really just about adding on some additional levels of detail for that specific type of supplier or the particular risk level or criticality. The interesting bit then is what you’re talking about, right? The, the visibility of the ecosystem or what I, people have been calling end tier or fourth tier.

[00:18:01] Alex Pillow: The suppliers. Suppliers and the chain around that, right? And. Really once you’ve figured that out, to whatever extent you are able, right? And I’m seeing different approaches across the partner ecosystem that I deal with day to day, right? Some are piecing together, you know, customs data with logistics data and doing some wonderful things with, you know, probabilistic AI and making connections that you can then verify, you know, at a later date.

[00:18:26] Alex Pillow: Others are aggregating questionnaires with permission so that you, over time are building up this knowledge graph of who is dealing with who and which ones are shared across, you know, major industry sectors, seeing all of that. But once you’ve got the visibility, what, what are you gonna do with it? You get up, do the due diligence, you’re gonna do the KYC, you know, in air quotes on those entities that you think could be critical.

[00:18:52] Alex Pillow: So for supply chain risk professional or supply chain risk program, to be truly effective, it has to have its third party due diligence, KYC or supply due diligence process. Absolutely nailed. Then really it’s just about applying it to whatever level of visibility that you have.

[00:19:10] Scott W. Luton: Mm-hmm. Uh, and empowering solutions and decisions and what to do.

[00:19:18] Scott W. Luton: Right. As I have very arguably stated and has been a part of a lot of our conversations here at Supply Chain now, as much as we all certainly appreciate the visibility gains that this profession and the world has made over the decades, and certainly in recent years, visibility is not good enough because we gotta have the answers of what to do.

[00:19:38] Scott W. Luton: And for our teammate, our teammates need to know what to do. And that’s, that’s the cool thing that I’m seeing in a lot of technologies out there. And it’s making our days easier and it’s allowing supply chain professionals and other, and other sectors, business professionals to be able to spend their time and more fulfilling and more value creating.

[00:19:57] Scott W. Luton: Activities, which is exciting. Are you, are you

[00:19:58] Alex Pillow: seeing the same Alex? Yeah, I was gonna say, I, I couldn’t agree more. And again, there’s a, a similar story playing out on that, that KYC side where you identify the risk, but then as you say, it’s what’s the mitigation, what’s the pathway in the past has been really about someone understand in the policies that are written for the organization and or verifying them or gonna get some of this being a sort of level of manual effort.

[00:20:22] Alex Pillow: And you’re still always gonna need that human oversight ’cause there are judgment calls to make. Right? But with the modeling that’s now available with the compute power, with the, dare I say, ai, uh, because sometimes that term is misused, but with all of these things that, that are coming together, you can significantly short circuit a lot of that work so that somebody then goes, huh.

[00:20:45] Alex Pillow: I’ve got the visibility. I understand that the risk insights that have been provided, and I understand how that applies to our risk appetite as a company and the potential impacts. Now what is my feel for this situation? What knowledge is not in the system? Maybe about a relationship at a supply supplier or their supplier, et cetera.

[00:21:05] Alex Pillow: And what am I gonna do about it? Does this one need to be an email? Does this one need to be a phone call? Does this one need to, right. We were talking about Slack before we hit record, right? Yes. Scott, you know, there horses for courses, they’re a hundred percent are conversations I have in my work where I need to do them face to face.

[00:21:19] Alex Pillow: Others I can send a text message. Others are something in between. And I’m sure that is the same for listeners in their, their supply chain roles. That’s right. Uh, did you say horses for courses? Horses for courses? Is that a British phrase? I thought that was global.

[00:21:34] Scott W. Luton: That is so interesting. So if I’m understanding that that phrase.

[00:21:38] Scott W. Luton: Based on what course or what obstacle or what our target is. We pick the right horse for it, huh? Yeah, exactly. Versus is it a flat track or is it cross country? Like, you know, you pick a different horse. Okay, I’m gonna steal that from you, Alex, or steal that from the whole, uh, European Yeah. Versus for courses.

[00:21:59] Scott W. Luton: Cool. Again, I think folks are probably, our listeners are, I’m sure kind of connect the dots here, but if there’s one particular call out that supply chain professionals can really use from your world in the financial services and, and in that KYC space, what’s one thing you think folks supply chain pros should pick up and maybe look at using?

[00:22:20] Alex Pillow: So I think, again, I, I, because I’ve been getting into this space this year and, and Moody’s is in this space, I just haven’t been in it personally till, till January of this year. But when I look at the sort of journey through the last decade or so that I’ve been working across KYC, the level, the use of.

[00:22:37] Alex Pillow: Third party data and insights paired with orchestration technologies, which are changing all the time now, but like just that business logic really of like if A, do B, if B do C and so on. Yeah. That seems to be applied a greater level and greater speed in KYC because the, the volumes that they have to check in that profession are so vast that they’ve had to go that way in supply chain.

[00:23:02] Alex Pillow: I do see some of it, but there’s still this, uh, quite heavy reliance on questionnaires, quite heavy reliance on that. I’m gonna send this out and even if that’s automated, someone’s gonna fill it in, which is not necessarily automated. Then I’m gonna bring it back in. Then we’re gonna run it against the risk assessment module, and I think there’s still a place for it, but you could probably get a lot further if we embraced a lot of what has already been achieved on the KYC side.

[00:23:28] Alex Pillow: At least that’s my personal view from working in one space and now trying to apply it to this one. There is. So much da good data out there, you just have to know how to use it and how to get it. And then there’s lots of good technology that I know you talk about all the time on this show, right? And it’s not all gonna be from one place.

[00:23:47] Alex Pillow: But the interesting thing is in how do you orchestrate that technology? Which again, is something I’ve worked in, in KYC where it genuinely is not rocket science, but it does take some patience and just rolling up your sleeves and going, I’m gonna learn how to do this model. But once it’s there and you’re just iterating, it’s so powerful.

[00:24:07] Alex Pillow: So yeah, I’d really encourage supply chain risk professionals, sourcing professionals, procurement professionals to carve out some time and really dive into this area. Obviously, very happy to connect them with people if they wanna reach out, you know, because it’s not like I’ve got a, you know. Everything in my head, it’s often regurgitated from smarter people.

[00:24:29] Scott W. Luton: We all, we all follow that approach for sure. Yeah, yeah, yeah.

[00:24:32] Alex Pillow: I, I’ve said if come lot

[00:24:33] Scott W. Luton: there. Yeah. I, I did say yeah, a lot. Twin years, Alex.

[00:24:36] Alex Pillow: Well, it’s, it’s not too bad, but I, I’ve, I, I did say to someone the other week, uh, I think if I have one talent, it is literally just aggregating what other people have said into a simplified form.

[00:24:48] Scott W. Luton: Mm-hmm. I like

[00:24:49] Alex Pillow: that. But like, that’s about it.

[00:24:53] Scott W. Luton: I disagree. Hey, synthesizing data, perspectives, nuggets, you name it. Mm-hmm. That is a, is a very powerful superpower, especially if you can simplify and take the biggest, most important parts and, and simplistically communicate it out on the other end. Mm-hmm. So, um, hey, one, one quick before I shift gears.

[00:25:11] Scott W. Luton: One thing I heard there, I, I think that is in a, in a broader, more universal sense is, you know, rework is one of the, one of the seven. Nine, 10 wastes. I’m, I’m not sure where we are now. Mm-hmm. So you were kind of speaking to the point of if data, if the data’s already out there, we don’t need to rework it.

[00:25:28] Scott W. Luton: Reinvent it, um, recreate it, replicate it. In many cases we can just use it. Imagine that. And, and save tons and tons of our very finite resources. Talk about waste. Um, okay, so let’s talk about major headaches. What was the famous, um, headache powder commercials back in the day? Could have been Anderson, it could be the goodies powder.

[00:25:52] Scott W. Luton: I don’t know. Anyway, let’s talk about some major headaches. We’ll figure out the solution later. But when you think of all the financial crimes Yes. Corruption and even bad actor risk, which talk about where we’re seeing tons of innovation, unfortunately. What recent example have you found to be an an intriguing one, especially one with supply chain

[00:26:09] Alex Pillow: ramifications?

[00:26:11] Scott W. Luton: I

[00:26:11] Alex Pillow: think the one that’s really got the zeitgeist at the moment, and I don’t see it slowing down, is really around organized crime. Focusing on how they can per perpetuate fraud at a massive scale. And it makes sense, right? If you think about the, what a Moody’s, we call deep currents, you know, things that are going on in the world that are just, you know, are really moving the dial.

[00:26:34] Alex Pillow: And if you think about the technology, the automation, the generative AI that can now, you know, you can set, you know, aim and fire it and it will then start doing things. You used a fraudster used to have to target something themselves. They had to get on the phone, they had to go and impersonate someone.

[00:26:50] Alex Pillow: They had to figure out a way to socially engineer their way into a company or, or target an individual to try and take their funds illegally. Now they can automate a lot of that so they can. Either they could make it very complex and very tight and try and make it smarter. Or what we’re tending to see right, is just we can apply a massive multiplier effect so we can shoot out a million attempts rather than a hundred in a day.

[00:27:17] Alex Pillow: And we only have to catch the weakest link to your earlier point to get some sort sort of payday on it. And there’ve been examples, right, where you see, you know, financial departments being targeted to transfer funds. There was a, a story last year where somebody deep faked A CFO got on the, you know, a call or whatever with, with the deepfake to one of their junior team members.

[00:27:42] Alex Pillow: And I think it was something like $25 million transferred from the business out to a fraudulent account. And there are many different ways of doing this. Now you pair that with. The cyber risk that we’re seeing, just hacking at a grand scale, again, with more tools, more attempts, et cetera. So you might find that you’re seeing fraud tactics being applied to socially engineer their way onto someone’s email.

[00:28:09] Alex Pillow: So they click the link, they download the malware without knowing then they’re in the system. Now you’ve got a cyber risk, and if you’ve got a cyber risk in your company, it’s a problem. But it’s also a problem if one of your suppliers has it, which is also a problem if one of their suppliers has it. And we’ve seen examples of that very recently, particularly in the uk.

[00:28:26] Alex Pillow: There’s been a lot of stories around various retail chains when that the big story broke. Lots of other companies then also disclose that they’ve had similar issues. Maybe thinking, well, never a bad, you know, this is the best time to share bad news. Right? Or somebody else is getting most of the headlines and that.

[00:28:44] Alex Pillow: It’s where I think I, I’ve seen JP Morgan InfoSec, you know, leader did an open letter saying, we are no longer gonna select vendors on features, we are gonna select them on their info security because it’s become such an issue. So that pairing of the deep current around fraud attacks and the deep current of cyber risk, just being preeminent is something I’d be learn, I’d be spending a lot of time on if I was in supply chain right now.

[00:29:11] Scott W. Luton: I love how, in one of the examples you mentioned, cybersecurity is all of a sudden the shortlist requirement as we’re selecting suppliers, vendors, you name it, as that’s size it should be. So that’s, that’s a terrific, uh, terrific.

[00:29:25] Alex Pillow: Hear Another example actually of fraud and, and this is from a. I’ve been working with some logistics customers and, and I listened to one of your shows about freight fraud.

[00:29:33] Alex Pillow: Mm-hmm. And they were telling us about their freight fraud and we are in the tens and sometimes hundreds of millions. Right. And I looked at their k their processes for onboarding logistics providers, and they missed a lot of the basic KYC anti-fraud controls. Not because this isn’t a slight right. This just has not been common practice.

[00:29:55] Alex Pillow: And it to our earlier conversation, what can we learn? Well, there are things that you would do. You’d want to understand who really owns these companies. Right, right. And do I truly understand the beneficial ownership structure and that data is available, right? We something that, that we actually spend a lot of time on.

[00:30:10] Alex Pillow: So you get that data, you start to understand networks, and then you might want to actually verify the identity of potentially even the down to the driver level. And that isn’t technology that we provide, but we partner with a lot of companies on that so that you can verify the people at the time and biometrically make sure that they are the person they said they are on their document, et cetera, so that if a cargo load does go missing, you now at least have some recourse, right?

[00:30:35] Alex Pillow: And you have something that you can actually go to police with rather than going, well, it, it went and I’ve got this paperwork. They filled in a questionnaire, turns out they lied on the questionnaire. What can I do? So yeah, that, again, that fraud deep current, yes, there’s the online attacks, but there’s also the freight fraud, which is said I, I, I listened to on, uh, on your show or the conversation about, on your show,

[00:30:55] Scott W. Luton: you know, fraud.

[00:30:57] Scott W. Luton: To your point, exists in so many fashions just across global supply chain. Freight. Fraud, returns. Fraud’s a big one. Yeah. Yeah. So many different innovative ways bad actors are, are making millions, if not billions of dollars. But to your point, you do wanna have recourse. You don’t wanna be like me when my Honda Accord was stolen from my Atlanta condo, and as the police officer arrived.

[00:31:21] Scott W. Luton: We asked the question, Hey, you know what, what’s, you know, what do you think would be done, sir, your car is probably already on a boat heading towards a country where it’s gonna be, you know, chop shop and re be repurposed. No recourse. And then we had to duke it out with insurance to see what they, you know, what they would cover.

[00:31:38] Scott W. Luton: Now there’s a good story, there’s a good finish to that, that story, because actually we found it in the back of a, a doctor’s office in metro Atlanta, which is weird. So they just took it for a joy ride. Anyway, the point is, you want to have recourse, right? Yes. You want to be able to claw back or hopefully more easily than that, the value or the resources or you name it.

[00:31:59] Scott W. Luton: And, uh, that’s an excellent point you’re making. Alex, let’s talk about the ecosystem, the valuable ecosystem that exists when it comes to global stakeholders who fight all of these problems we’re talking about. Mm-hmm. The fraud problems, financial crimes, the corruption, all the geopolitical risks, all the bad actors.

[00:32:16] Scott W. Luton: We’ve got regulators, which I can never say without saying mount up, sorry folks. Uh, practitioners, the consultants, the vendors, really the ecosystem of, um, magic makers that help us fight and mitigate the risk posed by all these problems. So, who, who is the, lemme lemme think of how I wanna pose this question to you across the ecosystem of superheroes, who is the furthest ahead of the game and why?

[00:32:46] Alex Pillow: Sure. I mean, before I jump into the actual answer, one thing I would say, and again, this is me sort of simplifying things from my own mind and hopefully it’s helpful, is I’ve, I, I’ve come from a rugby background team, sport guy. Yeah. So I’m. I very much just think of the bad actors and there’s, there’s bad actor nation states, right?

[00:33:05] Alex Pillow: There’s bad actor organized crime, there’s bad actor individuals, there’s, you know, uh, cyber criminals for hire. There’s money launderers for hire, all these folks. I just think of that as the bad team, the baddies, right? Like in a very childlike way. And, and then I think for these stakeholders that you’ve just mentioned as the good team, right?

[00:33:23] Alex Pillow: And one that, you know, strive to be part of, and I think 99.9% of the world strives to be part of the interesting thing is the good team operates by the rules and the bad team basically says, I can do whatever I like. And unfortunately, there’s no actual referee, right? Because there’s not a neutral ground.

[00:33:41] Alex Pillow: There’s the good guys trying to enforce the rules and trying to make it hard for the bad guys to get away with it. But the bad guys are constantly finding that another way and another way, and innovating a way because there’s no hand break. If the same goes wrong, no worries. Move on to the next one. As opposed to on the, on the good team, it’s like, oh, that project didn’t quite work.

[00:33:59] Alex Pillow: Now I’ve gotta justify why we didn’t get return on the investment, et cetera. And so sometimes that can can hold us back. But to, to answer the question, I just wanted to say that because I don’t want it to seem as a criticism, it’s more a call to action. Yes. When I think about this question, ’cause naturally the regulators have typically waited for there to be a problem, right?

[00:34:20] Alex Pillow: There’s a problem in the world, it happens a number of times. The private sector and private citizens fill the force of that problem or that challenge. The law enforcement is saying, we’re seeing more and more of this. The politicians hear about it. Politicians then say, we need to do something about it.

[00:34:36] Alex Pillow: By the time all of this is done and the regulator is asked to like, Hey, can you try and do something here? It’s back to horses. The horse has already bolted. So it, and, and not just bolted, but it’s done, you know, 16 laps and is, you know, he is actually quite tired now and is, and that, you know, is on to the next thing.

[00:34:52] Alex Pillow: So I think the regulators have that challenge, but I do, I do think it’s solvable. The practitioners, the supply chain professionals, the KYC professionals, the people that are trying to comply and do the right thing, well, they might want to do everything, but often the political will of their organizations is to treat these areas as cost centers rather than grow, rather than as growth enablers, which I think is how they should be seen.

[00:35:17] Alex Pillow: And so they are not necessarily always given the resources to get ahead of the problem and instead are stuck in reactive, reactive mode and they tr and, you know, and wait for the regulators to make them do it. Consultants obviously speaking to everyone in an ecosystem if they’re doing their job right.

[00:35:32] Alex Pillow: So they often have the ideas, but no power to do them until they’re hired. And then you have the vendors, which is obviously where I sit, so I’m probably biased. The vendors can do a lot more than they’re currently employed to do. By which I mean we often have technology that doesn’t get used on mass. It might have a few early adopters or might have people that are, you know, I’ll do this, but can I get buy to do it at, you know, global scale.

[00:35:58] Alex Pillow: So the vendors have people that don’t have to wait for the regulators ’cause they’re constantly trying to beat each other, right. The beauty of right, of good competition in a, in a well, uh, well run market. And so I would say that the vendors are furthest ahead on detecting these risks, coming up with ways to mitigate them or at least enable and empower the professionals to enable them.

[00:36:18] Alex Pillow: But until the consultants and the practitioners are willing to buy in on that and deploy it. It kind of goes nowhere. And the solution to all of this, in my mind and I, we made a documentary about this in 2023 called The Infinite Game, which is cool. We should be thinking about not just what is the, what is par for the course, like what is the, I feel like often the regulation is there to try and catch the slow, the laggards, right?

[00:36:43] Alex Pillow: And try and move them up to an average. We should actually be set in sort of aspirational regulation of saying, we want to see movement in this direction. And you can still have a minimum standard, but if you’re not showing active signs to move to the very best in class, then that’s a problem and you’re gonna get scrutinized and, and that then creates the political environment that I think a practitioner with, you know, the right ambition can go to their C-suite with and say, look, this is what it’s gonna take.

[00:37:11] Alex Pillow: This is, and by the way, those professionals, I’m pretty sure can make the argument of why that’s a growth enabler. They just aren’t always given the opportunity. Consultants certainly have a role in stringing it all together, and the vendors, rather than being ahead. Can then actually be challenged by their buyers to know we need more.

[00:37:27] Alex Pillow: Whereas at the moment, I feel it’s the other way around. The vendors are positioning more and often being told, well, I’d like to, but I can’t. I can’t get the buy-in to get that done. ’cause there isn’t a burning platform set by regulator yet. So that’s my view.

[00:37:42] Scott W. Luton: That is a very fascinating view and I almost can picture a storyboard of all those players as you described, and walk through the relationships and who’s ahead, who’s behind, who’s a.

[00:37:53] Scott W. Luton: How’d you pronounce? Laggard? Laggard, yes. Very elegant. I’m gonna start pronouncing it like that.

[00:37:59] Alex Pillow: I, I, I’m from the south of England, so I pronounce A as R and sometimes it makes it good and sometimes it makes it, uh, sound a bit stupid.

[00:38:07] Scott W. Luton: I could listen to you, uh, read through a telephone book, Alex. Those are still around.

[00:38:13] Scott W. Luton: Alright, Infinite Game really quick. Where can folks find that documentary that’s on the, the Moody’s website, on the thought leadership pieces. It’s free 10 minute episode. Alright, good stuff. Good stuff. And we’re gonna check out Infinite Game, uh, all those places. And folks, you may notice that Alex Pillow is now channeling Darth Pillow.

[00:38:31] Scott W. Luton: Uh, we had to change up cameras that happen sometimes. So Alex, I’m just glad you’re still with us. You were kind of walking us through the ecosystem, who’s ahead of the game and why, who’s behind. But you also really focused on the clarion call. The call to action needs to be put out there. So I wanna ask you along those lines.

[00:38:51] Scott W. Luton: What needs to change to best mitigate the risk that all of these issues we’ve been talking about. Mm. And plenty of others pose to global business and supply chain ecosystems everywhere. How can we overcome the baddies as you were calling ‘

[00:39:05] Alex Pillow: em earlier? Yeah. In my, my immature fashion, but, uh, hopefully, hopefully it helps folks.

[00:39:11] Alex Pillow: So really it’s, it’s literally the title of the, the documentary that we mentioned, right? The Infinite Game. So that’s most people, a lot of people have seen, seen the Simon Sinek, you know, Infinite Game, you know, YouTube clip and sort of talk through the mindset. There’s the actual book and the theory that it’s this.

[00:39:28] Alex Pillow: That’s all based on, but it’s that mindset shift, right? It’s not like there’s suddenly one tool out there and you implement that tool and now you are good. It’s not some dream hire who’s gonna come and save the day and, and do a thing. It’s more everyone adopting the mindset. For me, that is, I’m not going to implement a program and go, right, that’s good.

[00:39:48] Alex Pillow: I can now just. BAU or business as usual, just kind of sit here, you know, not have to work quite as hard. It’s like, no, you’ve gotta be up for the challenge every day that you have the baddies, as we call them, right. Constantly trying to get better. So you better be doing that too. And not only trying to catch up, but how can you get ahead of them?

[00:40:08] Alex Pillow: How can you anticipate where they might go? That’s obviously from my KYC world that I’ve been part of. Yep. But if I, if I look at it from the supply chain world that I’ve been learning about, it’s very, very similar. It’s. You in supply chain. It might not be a a, a baddy, right? It could be a natural disaster.

[00:40:26] Alex Pillow: It could be just an unfortunate, you know, technical infrastructure problem. It could be that there’s a, a price spike of some particular, you know, commodity that is, that is needed by a lot of people, and that was due to something else. So that’s why we talk about that integrated risk assessment at Moody’s.

[00:40:45] Alex Pillow: How can you understand all of those things, whether it be, you know, weather events, physical risks, you know, cyber risks and other things we’ve talked about. But if you have the mindset that you are going to try to anticipate all of these things, you’re gonna try to continually improve your program every day.

[00:41:00] Alex Pillow: You’re still gonna miss, sometimes you’re still gonna get beat sometimes, but you are, you are in the fight, right? So you will just naturally have a lot more wins than you will have if you are waiting for risk to happen or to dip for disruption to hit you. It’s really sort of taken that going on offense.

[00:41:17] Alex Pillow: I think they call it in, in US team sports. Yes. So going on offense I think is literally the best defense. Um, I did watch a lot of American television grownups, so I, I do have some of the lingo down love. And I think, and I think Scott, both you and I have the same quote, uh, on our offices. You shared me yours might, some people might be able to see that white rectangle behind me, that man in the arena quote from Theodore Roosevelt.

[00:41:43] Alex Pillow: And that idea of it’s the effort and it’s the attempt and it’s the striving for it. That is really what separates the average in the great. And so everyone aims to be great. I think a lot of baddies will be stopped. A lot of risks with no one’s fault will be mitigated and you’ll have better outcomes for everyone.

[00:42:02] Scott W. Luton: Well said Alex. And yes, uh, I’ll show on you my version of that quote. I’ve got framed and then I broke it in the preshow. So I’ve got the same man in the arena, uh, quote from, um, from Teddy Roosevelt. And I think it’s something that really is a very actionable in inspiration and something we can really live and find encouragement in, in this very challenging world to, to lead any business, uh, in.

[00:42:25] Scott W. Luton: So the good stuff there, Alex. Hey, you mentioned mindset in part of your response there, and I know you rub elbows with a lot of the global leaders out there that are overcoming all sorts of bad actor led risk and other risks. But what have you found to be kind of a common theme in terms of the critical mindset that these leaders, uh, these business leaders have that really enables them, at least in part, to overcome these setbacks?

[00:42:51] Alex Pillow: Yeah, that’s a really good question. And I think, I don’t know if it’s a trick ’cause you get all personality types. I find in the, in the risk world, people that go into risk, I don’t, I don’t think many people grow up and go, I can’t wait to go and be a risk professional. You know, compliance risk, anti-money laundering, risk fraud, risk supply, chain risk, nobody, everyone we know wants to be a sports star, an astronaut, a pop, you know, a pop star, an actor, whatever, like that’s what they see on tv.

[00:43:17] Alex Pillow: So that’s what they naturally aspire to. So most people fall into this career in some guys or another, and then they get interested and then they get passionate. And those are the ones that end up becoming the leaders. And so you find obviously that passion, that desire to master the subject area. But then some people are big extroverts and they’re gonna talk about it and they’re gonna be on stage at the conferences and they.

[00:43:39] Alex Pillow: Generally can motivate teams to right, go to the extra mile and try and take that mindset we talked about. There are others that will be much more across the detail and they’ll have deputies that maybe do more of that rallying cry, but what they’re doing is trying to build the component parts of the program.

[00:43:56] Alex Pillow: But both approach, I think, can be successful. The key principle that a lot of the KYC guys apply from the regulations they’re saying that I think regulators have got right in certain jurisdictions is they, they mandate that you must take a risk-based approach. Because if you look at all the risks and then you just try to, you know, like no.

[00:44:17] Alex Pillow: When you’re a kid and you put your hand on the piano and you go all along, all the keys to make that noise. If you try to do that, then chances are you’re not actually gonna do much very effectively. But if you can identify, these are my highest tricks and I’m gonna build a program to knock those down, and then I’m gonna carve out resource to start looking at the medium and then alone, I’m gonna do it in that order then.

[00:44:36] Alex Pillow: You are making that best effort that we talked about, having the mindset of, I’m gonna do everything I can, but I’m gonna marshal the resources whilst advocating for more to, to do that. So I think the people that truly understand what risk-based approach means are then able to use their particular traits, whether it be the passion and the extroversion, whether it be the detail or it may be deep subject matter knowledge or just great management skills, whatever their particular superpower is, if they’ve understood that principle and they can apply it, then they can use the rest of their talents to, to make that happen.

[00:45:09] Alex Pillow: And as we said at the start, right, it’s a team effort. Like nobody can do risk on their own. It’s a network effect of all the goodies, uh, that we talked about, playing together and playing nice. You know, often that in the vendor space, that means playing nice with your competitors, uh, because sometimes someone needs one part from them and one part from you.

[00:45:26] Alex Pillow: And why would you deny them that? If it’s to serve the, the greater good?

[00:45:30] Scott W. Luton: Yes, discernment. It’s something we don’t talk about enough, but it is so important as we discern our priorities, discern what we perceive to be potential focus areas, and then, and then lean into what will be the focus areas and will be the direction.

[00:45:50] Scott W. Luton: ’cause you’re, to your point, if you try to play every key on that gorgeous grand piano at the same time, it is not gonna produce an optimal sound. Just like if we try to do everything, it won’t produce optimal results, which is kind of one of the main points you’re making.

[00:46:07] Alex Pillow: Mm-hmm.

[00:46:07] Scott W. Luton: Well said Alex. Well said.

[00:46:09] Scott W. Luton: And I will not burden you with my lack of piano playing ability. I, I really wish I could play the piano man like Billy Joel.

[00:46:16] Alex Pillow: That’d be awesome. Um, I, I, I, I was made to do lessons for a year, but then I failed the very first exam and that was the, the end of that one when I was a kid.

[00:46:24] Voiceover: Yeah,

[00:46:24] Scott W. Luton: yeah. We were just talking about, I was at, um.

[00:46:27] Scott W. Luton: The Change North America event in Columbus, Ohio this week as we’re recording this. And I was, I was talking with Bart De Muynck along with, uh, Christine Barnhart. And Bart. Bart and Christine are both supply chain dynamos, but Bart is a big time musician. Hmm. And whenever you interview him, he is got these brilliant, gorgeous guitars back behind him.

[00:46:47] Scott W. Luton: And we got to talking about what AI does and doesn’t do. And I was like, Hey, I haven’t seen AI or robots play guitars yet, and, and really music. He goes, oh yeah, they, they do. Uh, it’s just not, it’s not terrific and I can’t, I’m trying to wrap my head around a robot having the manual dexterity mm-hmm. Right.

[00:47:05] Scott W. Luton: To play a guitar, which I know all the, you know, lots of humans do, but you don’t stop to think about the dexterity required and how, how your fingers gotta work in conjunction with your ears. Right. But I guess, I guess bots are doing it. Have you seen any of these bots, bots playing guitars? Alex?

[00:47:22] Alex Pillow: I’ve not seen those.

[00:47:24] Alex Pillow: I always think like the human nervous system is the greatest wonder in the world. And like, so it doesn’t surprise me that, uh, the musician, those knowledge of music has sort of pointed out the differences. It’s, yeah. There, there are some things that are probably best left to, to the people still.

[00:47:41] Scott W. Luton: That’s right.

[00:47:42] Scott W. Luton: Absolutely. Spike the football on that point. And it is, it is nothing short of a miracle how all of those senses and how all those talents come together to produce incredible music. Alright, let’s play the what if game. Alex, are you ready? Yes. Right, I’m ready. All right. So if you were a chief compliance officer or a Chief operating officer or C-S-E-O-C-R-O, chief Risk Officer, I guess these days, what would be a couple of aspects of your approach that comes to building out your toolkit that your team would use to drive its successful digital transformation?

[00:48:19] Scott W. Luton: The service levels that can’t be interrupted even just because we’re transforming. And of course all the while optimizing all this risk, uh, or at least, or optimizing the mitigation of all this risk, I should say that’s, this is a billion dollar question. We’re gonna get Alex Pillow to weigh

[00:48:36] Alex Pillow: your thoughts.

[00:48:36] Alex Pillow: Hmm. So many thoughts. I think ’cause there’s different approach, right? It’s like the question changes depending on the resource you can get, right? So first conversation, right? Is ask for more resource than you have with a, with a case of why, right? Which is we want to enable the growth of the business. You can’t do that safely without doing these things.

[00:48:58] Alex Pillow: You’re gonna have risk here, which is gonna set you back each time. So let’s not do two steps forward, one step back as we build in whatever areas of sales and marketing. Let’s do it together with, you know, all the various risk factors including supply chain risk involved. Then I’m gonna keep having that cadence right, with my CEO, my CFO of the board.

[00:49:17] Alex Pillow: Then it’s back to that mindset though. I, I want a team that have that mindset, and if they don’t have it, you need to give it to them. And if they refuse it, then you need to find a different team. Right? May sound harsh to say, but I think that’s, that is what it takes. You’ve gotta be motivated to get the right people so you’ve got the right people and you have started to make the case successfully to get the resources you need or impart, and then you, you phase it.

[00:49:41] Alex Pillow: Then I’m thinking about how am I applying my risk-based approach? If I understand my risk-based approach, I can then define what things I need to build for first. Because if we’re streaming, there’s an existing system of some sort that’s gonna run. But I almost wanna separate to that. Think about what is my dream system?

[00:49:58] Alex Pillow: What is the. Place I want to get to though is my new, you know, nirvana until it isn’t, which is where we get into the continuous improvement and, you know, infinite mindset. I’m gonna have that thought of what I want and I’m gonna mark it down by yes, here’s my risk based approach. Here’s the things that need to be true for that to be implemented.

[00:50:17] Alex Pillow: Once I know what it is I’m trying to do, then obviously you can think about, oh, I’m, I need this tool, or I need that technology, or I need this process. But I would start with the data. What data would it take for any tool to be successful at achieving the thing that I’m saying I need to, to do? What, what outcome am I trying to get?

[00:50:36] Alex Pillow: What data would be required to get that? Yep. Because if I don’t have the data, then we’re gonna end up doing manual effort. And if I’m doing manual effort where it, where it isn’t needed, then I cannot move fast enough to counteract fast moving either bad actor risk or natural risks that I, no, no one’s to blame for.

[00:50:56] Alex Pillow: So. I start with the data, make sure I’ve understood those, understand are there tools that that data plays with particularly well. And then I’m starting to layer those in. Right? And the way I think about it, and again, I’m biased because of my KIC background, is that my, the time I get the best opportunity to get the best data is when I start working with somebody because they want to work with me, ideally ’cause they want money from me or, or to make money together or something.

[00:51:23] Alex Pillow: So if I ask them for information, now this is the best time to get it. I wanna make it easy. I wanna make it smooth. I wanna make it as, as, uh, I wanna reduce the clunkiness of getting it for them, right? But this is the best time that I can get clean data if I’ve set up that process. Right. And once you get that clean data, and if you can make populate what the, you know, you may be familiar with the term master data management.

[00:51:46] Alex Pillow: What is my golden record for? Whichever entity, location, you know, uh, person, et cetera. What are the golden records that I need? Get the Master Data management correct and as enriched as possible, I now have the opportunity with that Master Data Management or Golden Records to, just to draw on that for each of my risk mitigation actions.

[00:52:07] Alex Pillow: So I’m not the most knowledgeable person, right? On all, every type of software out there. I’m trying right? Infinite Game. I’m trying to learn as much as I can across this partner ecosystem. I, I know the due diligence space really, really well. I could do that in my sleep. The end tier, the fourth tier, the looking around corners chains, I’m learning, there’s a number of fantastic providers in that space that I’m excited to work with.

[00:52:31] Alex Pillow: The scenario planning, and you talked about this, the scenario plan and the mitigation, and even though I’m seeing some cool stuff on how do you simulate, you know, and visually simulate what could happen if. While we play the what if game, what happens if an earthquake happens there or a flood happens there, or you know, God forbid another pandemic strikes somewhere.

[00:52:49] Alex Pillow: Those things I don’t know as much about, but I know those tools exist. I also know those tools don’t do anything unless the data is good. And the best way to get the data to be really, really good is to have a very well fought through, collaborated on master data management program with my chief data officer.

[00:53:04] Alex Pillow: If one exists. And if one doesn’t, my COO hopefully owns data in some way alongside the CTO and I’m gonna work with both those parties and tell ’em to hire A-A-C-D-O Chief Data Officer to do that. So yeah, that’s how I, that’s how I think I do it. Resource dream scenario. Ensure that my entry point of data is really good.

[00:53:24] Alex Pillow: Make sure that my overall master data management is at the core of everything, and then I’m layering on technology to each step of the process so that my people get the, hopefully the most enjoyable version of their job possible. Because to your point, and I know you make this most shows, is you want to give the people the most interesting, intellectually challenging and stimulating work because I know we just discussed this, thankfully, there are still some things that humans are asked at, and that’s where we wanna put them.

[00:53:53] Alex Pillow: Yes. Fulfilling.

[00:53:55] Scott W. Luton: Where were you people get their fulfillment from? What do they love to do? Where can we, how can we position them to find the success? And to gain their innovations and their ideas and our feedback as we’re all seeking to delight our customers and also take care of our suppliers. Well said.

[00:54:11] Scott W. Luton: Alex, I like your, your framework thoughts. I would just add, you mentioned, you know, weather and calamities all these things. I think the scariest thing right now that we are, our scenario planning that millions of times a day for is tariffs. Yes. Oh my gosh. We need to, we can we please get some, some certainty please.

[00:54:29] Scott W. Luton: Let’s settle things down, please. From me and Alex to all of our government leaders out there. Wow,

[00:54:36] Alex Pillow: okay. There are, there are some cool tools on that. I, you know, I work with too many of the companies to name them ’cause then one gets jealous or whatever, but like, there are some very good tools. It’s not hard to find.

[00:54:45] Alex Pillow: Um, I appreciate they change all the time, but it’s cool to see how quickly the technology on the vendor side has sprung to action. No doubt. Um, to try and try and help professionals with this.

[00:54:57] Scott W. Luton: I don’t mean this, this to sound negative in any way, but hey, there is opportunity in every storm. And to your point, no one wastes much time these days in, uh, churning out services and products to help us navigate and weather the storms, even the ones that are completely avoidable in my opinion.

[00:55:14] Scott W. Luton: But that’s another show. Okay, Alex, uh, really appreciate the work you’re doing with the podcast, KYC Decoded Folks can find it wherever they get their podcasts. Lemme ask you about one of your favorite recent conversations, Alex, as you approach episode 100. Yeah,

[00:55:29] Alex Pillow: absolutely. So we have had the pleasure of having an investigative journalist and author on called Jeff White a few times.

[00:55:37] Alex Pillow: Fantastic storyteller. Incredible, you know, investigator and. We recently had him on, uh, to talk about something called the Bybit Heist. Now, most people that are used to shipping goods and things, they might go, why would I wanna know about Bybit, a crypto firm in UAE? I’ll tell you why. Because according to Jeff, it is potentially the largest theft of all time.

[00:56:00] Alex Pillow: And the way that they got in to make the theft happen is they socially engineered fraud. The cybersecurity vendor of the company, they attacked. So they went through the supply chain of the company. Yep. Got into the company via their supply chain, and then they didn’t defraud the junior folks. They defrauded the three founders and got them to transfer the equivalent of $1.5 billion out.

[00:56:30] Alex Pillow: And the most interesting bit is Jeff’s career the last 10, 15 years is. Really, he focused on cyber crime and then he realized that all cyber crime becomes money laundering because otherwise why do you do it? And one of the most prolific cyber criminal groups is from North Korea. Mm. ’cause the Lazarus group and all of this is on DOJ indictments.

[00:56:51] Alex Pillow: And so this is public record from, you know, the DOJ is the most advanced fight in this stuff. And so if you think about the ramifications, why should we all care? Well, if money is being stolen via supply chain hacks and cyber criminals, et cetera, and then it’s being sold off, you know, this crypto is then sold off to organized criminals, et cetera, with taking their cut and they go and do the laund.

[00:57:13] Alex Pillow: Meanwhile, the take the margin, the profit is going back to a regime that we all don’t wanna see further. Build out that weapons program, right? ’cause that creates greater geopolitical instability, which again, will create more supply chain problems if that was to ever manifest. Which, you know, hopefully it doesn’t.

[00:57:30] Alex Pillow: So. Yeah, I think that’s a, that was a really fun episode, you know, which sounds weird to use the word fun, but it’s just, ’cause Jeff’s such a good storyteller. We’ve done two or three other episodes with him on other huge hacks, thefts, et cetera. So within the hundred he’s in there a few times. I really recommend, recommend that one, and if you enjoy that, I would then look for some of the others we’ve done with investigative journalists, because they are a different breed when it comes to, uh, to storytelling.

[00:57:57] Scott W. Luton: You’re talking about that example of kind of the bad actors, finding the weakest links. Uh, I haven’t shared this story, uh, in, in lots and lots of episodes, but, um, it was a, I think it was a Cisco with a c Cisco commercial, not the, not Cisco with a s the food, the big food behemoth, but it was a Cisco commercial around, um, a cyber hacking that started, that was years ago.

[00:58:21] Scott W. Luton: And the bad actors, rather than tackling the factory, this manufacturing company head on, what they’re able to do is by social media observations over a long period of time, they discovered that a lot of the, of these factory employees were part of a bowling league. Right. In the same Right. And the bad actors were able to hack into the bowling league software that tracked the scores.

[00:58:48] Scott W. Luton: Mm-hmm. Right. And probably kept the standings. And they’re able to use that basic low level, probably low security website to crack the employee’s credentials in their email at the factory. And long story short, they ended up shutting down the factory line and, uh, demanding ransom. Yep. All because the team members, you know, were, were lovely, you know, enjoying their time.

[00:59:13] Scott W. Luton: They’re all for time. Yep. Uh, but in a site that, you know. It’s all targeted. If, if, if a b, c company is the ultimate target, bad actors are gonna find everything, including using a lot of AI tools to uncover wherever the easiest way of, of demonstrating

[00:59:32] Alex Pillow: will be. Use a password manager, everyone. Use a password manager.

[00:59:35] Alex Pillow: It makes you yes, please. It, it makes you not the weakest link, and therefore it’s not gonna be your fault when something happens. One thing I will say, Scott, is also, obviously my other favorite episode recently was with Your Good Self. So people should check that out where you are the guest for a change than that, rather than the host.

[00:59:50] Alex Pillow: You, I

[00:59:51] Scott W. Luton: hope,

[00:59:51] Alex Pillow: hope I enjoy it.

[00:59:52] Scott W. Luton: You and I both. I, I enjoyed it too. Thank you for pointing that out. I loved your, I, I love your style in general and a very inquisitive question asker. I hope I delivered. Hey, to our audience, Hey, check me on that. What’d you disagree with? You go out and check the KYC Decoded podcast.

[01:00:07] Scott W. Luton: You’ll find Jeff White and a ton of other episodes. You’ll find my recent episode. Hey, tell me what I got wrong, or tell me what you agree with, or just give Alex feedback. On the great work he’s doing. I’m, I, I know that we all, all, all of us content creators appreciate that. So y’all check that out. KYC Decoded, wherever you get your podcast from.

[01:00:25] Scott W. Luton: Okay, Alex, what a great wide ranging conversation we’ve had here today. We went deep in some areas, kept it broad and universal in others, a great mix. I’ve enjoyed your examples and your perspectives and how you played the what if game and, and how you informed and educated me. But I gotta ask you this.

[01:00:44] Scott W. Luton: Here’s the true tr billion dollar, maybe trillion dollar in these inflationary times. Question, how can folks connect with you and the Moody’s team, Alex?

[01:00:53] Alex Pillow: Absolutely. I mean, the easiest way to get me is just on my LinkedIn profile. I’m on it. I have a couple of colleagues that have access as well, just so we can, you know, get guest ideas, respond to people that listen to the show.

[01:01:04] Alex Pillow: And then often it’s to connect them to somebody else, right? They say, oh, I love that guest. Can you make an introduction? Or, Hey, you mentioned such and such, you know, white paper or other podcasts. Can you, you know, it’s like, yeah, absolutely. Like that’s the point of the show is to provide enough education to get people interested, and if they want more, then we can direct ’em to it.

[01:01:21] Alex Pillow: Uh, so just hit me up on LinkedIn. Otherwise, you know, moody’s dot com start there. And then there’s a plethora of all the things Moody’s does, you’ll, you’ll find it. And then as you say, the podcast is wherever you get your podcast. You know, Moody’s Talks is sometimes the prefix. Uh, and then KYC Decoded is the name, although we are looking to do more on supply chain.

[01:01:39] Alex Pillow: So if you have ideas or you wanna be a guest, then let me know. Outstanding.

[01:01:43] Scott W. Luton: Okay. There’s lots of folks I wanna suggest to you, Alex, but one in particular. That came to my mind several times as you were talking about the call to action that we need to really drive home across industry to change so many of these risks that are only gonna get bigger.

[01:01:59] Scott W. Luton: We gotta get Kora Coze. Okay. All your podcast, Alex. So Korah, if you’re listening, I’ll tell you and Alex would’ve a fascinating conversation. Alex, you’ll appreciate Cori. Jose tells it like it is, and that’s, we need a lot more of that here in 2025. Um, okay. Great conversation here today, folks. Terrific con, I, I really enjoyed it.

[01:02:18] Scott W. Luton: I learned from Alex here today, as I do from all of our guests. Alex brought it big thanks to Alex Pillow with Moody’s. And again, check out his podcast, KYC Decoded or Moody’s talks, KYC Decoded, wherever you get your podcast. Alex, thanks

[01:02:32] Alex Pillow: for being here today. Absolutely. My, my pleasure. It’s great to be a guest on the show that I, as I said, I listened to back in March and I was just wanted to know a bit more about supply chain.

[01:02:40] Alex Pillow: And now, now I’m a, a fan and subscriber. Oh man, Alex, your music

[01:02:45] Scott W. Luton: to my ears. I can’t wait to tell my mom that. Uh, hey, to our audience members out there, you’ve got some homework, Alex, as I thought he would, has delivered some very actionable advice and perspective here today. You gotta take one thing. Just take one thing from the truckload that Alex brought to us.

[01:03:04] Scott W. Luton: Put it in action. Share it with your team. Do something with it. Deed’s, not words. That’s how we’re changing global supply chain management for the better. And with all of that said, Scott Luton challenging all of our listeners and our viewers out there. Do good, give forward, be the change that’s needed, and we will see you next time.

[01:03:21] Scott W. Luton: Right back here on Supply Chain Now. Thanks everybody.

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