As far back as 2019, new regulatory alerts were released every 7 minutes; that is less than how long it takes to brew and drink a cup of coffee or look up your bank balance online. All businesses need compliance as a lack of transparency and defaults in legal and regulatory standards may severely damage your organisation’s reputation and attract punitive measures. This may cost a loss of market share and irreparable damage.
Installing a compliance management system, especially one that is adequate for your organisation’s regulatory needs, is one obvious way to achieve this. I remember how at work, many years ago, once we heard that compliance officers were going around, we would shape up and be alert. No one wanted to be caught complicit by failing compliance checks, but how do you avoid human errors, oversights, and complacency? By automating the way, the system works.
In reality, compliance managers cannot be everywhere all at once and if automation is the future, then, even better is the automation of checks and compliance to ensure that everything that needs to be done is done as should. This way, required compliance standards are met and the risks of violations and infringements are mitigated.
Nevertheless, managing compliance is a lot of work and while spreadsheets and the human instinct have helped a lot in the past, nothing beats a well-planned, implemented, and automated compliance management system to prevent violations and mitigate potential risks. The larger your organisation, the higher the degree of risk of compliance breaches or gaps and, the higher the requirement for a more seamless compliance system. And as your growth expands, the more you need to have an efficient way of monitoring and enforcement of external regulations and ethics and internal standards.
- What is a compliance management system?
- Benefits of compliance in business
- Data breach prevention
- Adherence to regulation
- Risk management and evaluation
- Competitive advantage
- What are the elements of a compliance management system?
What is a compliance management system?
A compliance management system is a system of controls integrated into your management information system to ensure that your operations and processes always meet (or if you are an ambitious lot, stay ahead of) regulatory standards and your minimum internal control requirements. It is a continuous process of monitoring and assessing organisational systems to ensure that they comply with security standards, regulatory policies, and other ethical and industry requirements.
In our fast-paced environment, updates have become a buzz – with software updates, technical requirement updates, and certification updates, the list goes on. Only yesterday, a friend’s computer failed a hardware test and after hours of troubleshooting, she realised it was only because she had not updated her operating system. A no-brainer, right? Well, imagine how many updates to legal and regulatory requirements get lost in tons of emails or get missed out in those T&Cs we all don’t read to a tee.
With the right software for compliance management, you get an extensive and diversified system to enforce a variety of legal and regulatory requirements. By making compliance and control processes more efficient, it reduces and manages product and service-related risks and communicates compliance responsibilities clearly to employees.
An effective and quality compliance management system provides digital indexes that are specific to distinct aspects of the business. These show and generate crucial data, and reflect performance indicators which help identify areas for improvement.
Benefits of compliance in business
Data breach prevention
Having proper compliance procedures in place saves you from having to explain to customers, clients, and stakeholders that their confidential information has been stolen from your database like Facebook and Microsoft did last year. A good compliance management solution will mitigate such risks and save you the embarrassment, lawsuits, or other likely repercussions of such breaches.
Adherence to regulations
Quality compliance procedures in operation within your organisation facilitate adherence to regulatory standards and requirements which prevents your organisation from receiving penalties, financial sanctions, and potential reputation damage. As the regulatory environment diversifies, the demand for compliance accelerates significantly and having a system that is expedient in doing this is an advantage. Subtly put, no violations, no sanctions.
Risk management and evaluation
With adequate compliance in place, regular and concurrent system risk evaluation and monitoring ensure that security protocols and tools are functioning efficiently and protecting the organisations. In tandem with documentation such as reports, approvals, certifications, accreditation, consent and legal cover, proper compliance systems and processes evaluate and identify potential risks. After implementing procedures to mitigate and avoid such risks, compliance also helps to validate the implementation and check for the effectiveness of procedures. Incident reports are also documented.
Frequently carrying out compliance audits keeps your organisation on its toes and positions it to have a competitive advantage. When your customers are constrained to choose between you and the competition, especially in high-risk markets and industries, your compliance efficiencies just might be the best way you differentiate yourself from your competitors and stand out as the easy – and most reliable – choice.
What are the elements of a compliance management system?
To establish a compliance management system that delivers, compliance managers should ensure that the following essential elements are in place:
- Security enabled workflow: The system must enable secure monitoring of workflows related to every aspect of your organisation’s operation.
- Compliance policy: Make a concise and comprehensive document outlining the guidelines available to your employees.
- Self-assessment and audit frameworks: The systems should be capable of assessing internal efficiencies and deficiencies and generate appropriate reports to document irregularities and inconsistencies.
- Competent compliance managers: Trained and capable compliance professionals should manage and coordinate compliance activities. There should also be an oversight committee to rule on compliance matters.
- Integrated communication and feedback system: The system should have an embedded feedback system to pick up exception reports and user feedback on operational effectiveness.
The Cost of Compliance Report by Thompson Reuters shows that the biggest compliance challenge from Covid-19 is remote working. Although compliance dropped by 5% in the priority of IT initiatives of companies worldwide in 2021, it has by no means lost its relevance as the world continues to seek efficiency, uniformity, and ethical standards in business operations.
Overall, you need to ensure that your compliance management system is automated, secure, and able to adequately keeps you up to date with regulatory requirements. Besides reducing the risk of performance issues, violations, breaches, and system failures, it also frees up your technical staff to attend to the more strategic and innovative aspects of your business.
Book a demo session with My Learning Hub today to learn more about compliance training that can improve your processes and enable those who are responsible for this essential part of your business.