Compliance is _____________.
“Getting in the way of our innovation efforts.” “Making the time to close vendor deals 2x what it used to be.” “Impacting my productivity.” “Too inconsistent – I’m not sure what applies or if we are applying it correctly or consistently.”
We’ve surveyed over 200 companies and this what we hear the most when it comes to compliance. And it’s understandable. Compliance isn’t what it used to be – it now affects almost all functions within organizations as well as third-party vendors. New compliance requirements get introduced and existing requirements regularly change. Keeping up with compliance is a challenge.
At the same time, compliance is critical. It goes to the “how” a business conducts itself and is the difference between being a trusted third party and a massive risk. Without a good compliance program, companies put themselves and their customers in harm’s way.
In this four-part series, InFront Compliance will be uncovering some of the hidden risks and unintended consequences of current ways of managing compliance and, more importantly, discussing new tools for companies to more easily and comprehensively approach compliance to save money, time and risk.
Part 1: Compliance and Innovation
When you think about innovation, compliance isn’t always the first word that comes to mind. For many organizations, innovation has historically been associated with rapid change, disruption, and breaking things to identify new solutions and ways of doing business. Who has time for compliance in that innovation model? Why not just worry about the rules later?
But even innovation gets innovated. And new models of innovation emerge. Especially within industries that are heavily regulated like banking and credit unions, insurance, and healthcare. For many of these industries, innovating in a complex compliance environment can be a challenge.
Even if you aren’t operating in a heavily regulated industry, if your company’s clients are heavily regulated, if you handle personal, confidential or sensitive data, or have access to your client’s computing environments, compliance becomes critical. There can be tremendous unintended consequences for failing to comply with regulatory and operational requirements ranging from regulatory authority investigations, fines and penalties, extensive indemnity and liability obligations, and loss of trust. All of this can severely undermine and limit the effectivity of innovation programs. Oftentimes, stopping innovation efforts in its tracks.
So the question becomes how do you balance innovation with compliance? Do they have to be at odds with one another?
“With technology, compliance and innovation can not only co-exist, they can work synergistically to drive more cost-effective and sustainable innovation outcomes.”
With technology, compliance and innovation can not only co-exist, they can work synergistically to drive more cost-effective and sustainable innovation outcomes. This is the case whether you directly operate in a heavily regulated industry or have certain aspects of your business (or your client’s business) that are subject to compliance requirements. It comes down to understanding both the “what” and the “how” of the innovation efforts and using technology to inform the appropriate level of compliance.
Innovation models aren’t the only models that are evolving. Compliance models are evolving as well. Compliance has historically been a checklist and spreadsheet driven process – inherently slow, hard to manage, and subject to human error. Compliance has also been treated as rigid and inflexible, a one size fits all approach which has turned into one size fits none. This is where technology can make all the difference.
Let’s reexamine compliance with an innovation lens and imagine what it could look like.
· What if we moved away from checklists and spreadsheets to dynamically generated digital assessments?
This is the starting point for re-thinking what compliance can look like and is the tip of the iceberg for the types of efficiencies that can be created when we shift into a technology-enabled compliance system. This is the first step in driving a relevant, comprehensive compliance approach that significantly streamlines the assessment process.
· What if these assessments were kept in a central location and were always up to date?
Stale requirements, inconsistently applied. It’s a compliance nightmare. When was the last time your spreadsheets or checklists were updated and are you confident that your teams are using the most current versions? Compliance is not static – the requirements change. Often. So using requirements that are not kept up to date create a false sense of security and a great deal of risk. Shifting to a technology-enabled compliance system solves for this – enabling always-current requirements, consistently applied.
· What if these assessments went beyond initial due diligence and IT security protocol to also include regulatory requirements and the resulting digital reports identified not only compliance gaps but provided recommendations on how to come into compliance?
Expertise, meet technology. This is next-level compliance and provides the piece that is currently missing from GRC and IRM platforms currently on the market. To comprehensively assess risk, you need a system that can give you a comprehensive view of not some, but all of the applicable requirements, including regulatory.
And you need them in a way your stakeholders can understand and act upon, particularly when there are compliance gaps. This enables pro-active compliance through transparency, insight, and guidance creating unprecedented sightlines into compliance risks and solutions.
· What if this approach enabled you to evaluate innovation opportunities – whether that be internal, through M&A, through third-party vendor relationships, or otherwise – with compliance in mind?
Innovate smarter. With more complete information about compliance, companies are positioned to make better decisions when it comes to innovation opportunities. With the ability to compare opportunities based on compliance risk, companies can better protect their innovation investments and generate more value for their organization. All of this is driven by a technology-enabled compliance approach.
This is a game-changer when it comes to de-risking innovation efforts from both a cost and compliance perspective. And it’s available. There’s never been a better time to re-think your compliance approach. Reach out to learn more.