Every organization needs to adhere to the relevant laws, regulations, guidelines, and specifications that are relevant to its industry and geographical location. The scope of regulatory compliance an organization needs to implement depends on the nature of their business and achieving compliance may require adhering to laws and regulations covering everything from human resources to financial practices. Furthermore, depending on the industry the organization is operating in, there may be relevant local, national, or even international regulations which govern its operations.
Regulatory compliance is a mandatory function every organization needs to complete. Failure to do so could lead to severe legal penalties which include monetary fines and restitution to customers who have suffered a loss due to the organization failing to meet its compliance obligations. However, achieving compliance should not be seen as a “necessary evil.” Generally, compliance regulations exist for an excellent reason. Either an irregularity in the industry has forced the creation of compliance laws, or past best practices have led to the creation of compliance guidelines to enhance the industry’s service levels and reputation.
The Benefits of Regulatory Compliance
There are multiple benefits to implementing the necessary policies and procedures which help you achieve compliance. A comprehensive policy and compliance management program can help you formulate internal processes which not only help you achieve the necessary accreditation but also benefit your business.
An effective compliance program can help your business mitigate risks by preventing possible events from detrimentally affecting your operations.
An excellent example of this is the audit compliance requirement for backing up your data. In today’s digital world, the loss of data could severely impact your organization or threaten its very survival. Not only do backups ensure you pass your next control audit, but they also protect your business information from any unforeseen events which could destroy your data.
Any organization which stores, processes, or transmits cardholder information needs to comply with the Payment Card Industry Data Security Standard (PCI-DSS). Under PCI-DSS version 3.2, Two-Factor Authentication (2FA) is a mandatory compliance requirement. With over 81% of data breaches involving weak or stolen passwords, 2FA mitigates this risk by adding a second layer of security that prevents automated password attacks. The reputational harm and potential financial losses resulting from a data breach could be catastrophic to your business, so complying to PCI-DSS not only ensures you adhere to the global PCI standard but also protects your business from the potentially devastating effects of a data breach.
Every business needs efficiency. There are two ways to improve your bottom line: increase revenues or decrease costs. Increasing revenue takes effort. However, reducing costs through increased efficiencies are a great way to improve your profit margin without hamstringing operations.
A comprehensive policy and compliance management program can help increase efficiencies. A compliance process generally starts with some form of business analysis which is required to understand the current business state so that the creation of relevant policies and procedures can occur. This analysis can help you identify process bottlenecks and inefficiencies which are stifling productivity in your business.
A great example of this is the implementation of policies which need to comply with the EU’s General Data Protection Regulation (GDPR). Under the GDPR, if your organization processes the personal information of EU residents, even if your business is not in the EU and the processing is taking place outside of its borders, you must put measures in place to safely store, process, and ultimately destroy this data. Not managing your data can result in it becoming disorganized and unmanageable over time. Complying with the GDPR data protection regulations forces you to put measures in place to manage customer data. It also helps your organization become more proficient in data management, ensuring the efficient storage, transmission, archiving, and destruction of data.
Better Insights and Business Strategy Alignment
In business, you can only manage what you can measure, and a compliance management program can help you gain better insights into your business by giving you the information you need to direct and control your operations.
Any compliance program requires an analysis phase. During this phase, information is gathered in order to understand the organization’s current compliance status. This current state assessment is then used to create an action plan to fill any gaps which may exist. The analysis phase of a compliance program can uncover hidden insights into your business, giving you the opportunity to put actions in place to improve management and overall efficiency.
The insights gained during this analysis phase can also help drive business strategy. Understanding the strengths and weaknesses of your business, as well as the opportunities and threats it faces, can assist you in driving new strategies to grow your business, enhance efficiencies, and defend against any possible threats.
Trust is a foundational element in building any successful business. Customers trust you to provide them with goods and services, and in today’s online world, keep their confidential data safe.
Achieving compliance enhances the trust customers and other stakeholders have in your brand. Compliance signifies your business has met specific criteria to achieve a certain standard. When stakeholders deal with a company which has achieved a level of compliance accreditation, they know they are dealing with an organization which has met particular criteria which ensure that a certain degree of standards and practices are in place.
For example, achieving an ISO 27001 Information Security Management Standard signifies the organization has designed and successfully implemented a comprehensive range of information security controls. Dealing with an organization which is ISO 27001 certified gives customers a level of comfort as they know any information they share is secure and managed.
Regulatory Compliance is Important and Beneficial
Regulatory compliance is a mandatory function every organization needs to complete, but the requirement to adhere to a specific industry or governmental regulation, guideline, or policy does provide business benefits. A comprehensive policy and compliance management program helps provide clarity of purpose and the implementation of clear policies and guidelines aids in driving initiatives which provide real business value. When correctly implemented, regulatory compliance can reduce risk, increase efficiency, provide an organization with insights into their business, facilitate better strategic alignment, and enhance the organization’s brand.
To learn more about regulatory compliance implementation and how it can benefit your business, contact JMARK.