Being associated with the regulatory authority is beneficial to the compliance officers in many ways. Firstly, it guarantees financial safety. Also, the compliance provides adequate guidance to the c-suite which allows businesses to succeed.
Ever since the introduction and implementation of the compliance law in the marketplace, parity has been greatly enhanced while still giving consumers adequate security. However, some officers feel that the regulatory requirements reduce their profitability how? It burdens with the management software, but organizations can still use this opportunity to leverage their business.
The commonly used terms in regulatory compliance are:
Compliance – To comply is to follow the industry regulations. Less obliquely, it relies on the already set rules.
Regulation- A regulation is a mandate enforced by the governing body.
Regulate- While regulation is the implemented and enforced law, to regulate is to supervise or control using the regulations. The laws establish both the executive and legislative branches, but the government imposes them.
Regulator- Many agencies are used as regulators for their companies by guiding the organizations to meet their compliance needs. For instance, HHS provides HIPAA with guidance materials outlining various regulations. Also, SEC gives Links the required elements in compliance with section 404.
Compliance Management Using Risk Management
For you to create a robust corporate program, you must first assess the different risks that your organization is currently facing. This will help you to find out which ones you can tolerate and the ones you cannot. If a certain thereat does not adversely affect your company operations, or when the cost of getting rid of it is significantly high, a section of your risk management process can entirely accept the risk.
For instance, an entrepreneur with fewer volumes of individual customer details may decide to avoid the end to end encryptions in the office. Alternatively, the owner may merely purchase firewall protection since they are using only one computer. However, it becomes risky when the owner-employees someone who can access the user’s data. The owner needs to regularly access the data; to mitigate the risk factors.
The more prominent organizations experience a harder time to navigate the compliance regulations. In fact, on many occasions, they may simply hire a compliance officer or establish a risk compliance department to set an appropriate risk profile.
How Does Regulatory Compliance Protect Your Organization?
Generally, the risk assessments are used as the center of regulatory compliance. This means that reviewing the probability of a risky event taking place allows you to make the necessary protective measures against it
Some industries are riskier than others. For instance, the financial technology and the healthcare sectors; they must recognize how sensitive the information they collect is and also how prone they are to being targeted by malicious actors. Some organizations have even implemented an employee awareness program to enlighten them on the dangers of these risks. Others have implemented the “bring your computer” strategy to reduce the vulnerability. However, the nonprofit organizations are having lower chances of being attacked.
How Does The Regulatory Compliance Improve Profitability?
Since the malicious attacks have been rapidly increasing, the savvy customers must be informed of the steps taken by the company to protect their private data (e.g. GDPR).
The audit reports and the regulatory compliance proving compliance occasionally allow the organizations to make themselves in a better way. For instance, the SOC 1, SOC 2, AND SOC 3 information reports help the customers to increase their trust in the vendors and also prove the current SOX compliance. Without the results, the business will lose both their esteemed clients and profitability as well.
How To Increase Profitability By Leveraging Compliance Management
To be fully compliant, you must spend time and incur some costs as well. Collecting the compliance documents and also aggregating the information is not an easy task. When carrying out both an internal and external process, both the audit and compliance terms must be well incorporated using the required documentation. If your company gets a low score during the review, your company may be subjected to severe legal ramifications. These implications may even dip you into penalties or shut down your company.
A report by the Chartered Institute Of Internal Auditors indicated that the evidence of gathering the audit often reveals out many problems, and this extends the auditing period. Also, the report noted that having less or many controls also interfere with the process. The companies which outsource the internal auditing functions save substantial amounts by merely streamlining the process of gathering the information.
With compliance software, the cross-department’s communication becomes easy. These authorization options allow both the compliance officers and the internal auditors to control who will read their regulatory compliance reports, and who will audit it. With compliance software, your company security levels are enhanced.