Regulatory management is a function that every business must complete. Not having the function in place puts your company at the risk of legal fines and penalties. These include restitution and monetary penalties to customers affected by your company’s non-compliance.
The scope of regulatory compliance depends on the nature of the business you conduct. Regulations fall into local, national, and international categories. Achieving compliance calls for adherence to laws and regulations that affect all operations, including human resources and financial practices.
When your company fulfills its mandate in regulatory compliance, it stands to benefit in several ways. Proper compliance management helps you formulate the internal processes to achieve business efficiency in the following ways.
Gives You the Right Combination of Tools and Technology
With the right combination of tools, technology, and best practices, your company can become more efficient. The market readily avails a wide range of advanced tools and technology that enhance business efficiency. It, therefore, shouldn’t be a challenge for you to find the most appropriate combination for your company.
In compliance matters, consider installing a tool that extracts data from the system for comprehensive insights on deviation. This way, you can quickly note any existing gaps and take the necessary steps towards complete compliance.
Improves Your Risk Management Strategy
Having a unique compliance management strategy in place will help you mitigate risks. Compliance goes a long way in preventing detrimental events from affecting your business operations.
An example of this is the audit compliance regulation that requires you to back up your data. The advances in technology in the modern business world expose companies to loopholes that could lead to data loss. Hackers constantly improve their cyberattack methods, and not having a backup could be detrimental to your business. Backups are essential in helping your business pass the next control audit. Besides, they protect your business information from unpredictable events that could threaten its survival.
Compliance regulations require any organization that stores, processes, or transmits cardholder data to have PCI-DSS compliance. This refers to the Payment Card Industry Data Security Standard compliance. Under this regulation, it’s mandatory to provide two-factor authentication for data protection. 81% of data breaches happen due to weak passwords. This approach helps mitigate the risk of attack by providing a second security layer to prevent automated password attacks.
Improved Cost Efficiency
Two very crucial ways to improve business efficiency are:
- Increasing revenues
- Decreasing operational costs
Increasing revenue is never an easy process for any company as it requires dedicated effort. However, if your company can reduce its operational costs, it can be on the right track to improving the profit margin.
Having a comprehensive compliance policy and management program can help increase business efficiencies. The two help improve the profit margin without compromising operations.
The compliance process starts with business analysis which helps you understand the business state. You can identify the inefficiencies and bottlenecks affecting productivity in the company. It’s only then that you can create relevant policies and procedures to protect your business.
When implementing policies, they must comply with the General Data Protection Regulation (GDPR). Under this regulation, if your company processes any personal information of your customers, you must put in measures to protect the details. The policy applies to the processing, storage, and ultimate destruction of that data.
Not having proper data management policies or strategies results in disorganization and mismanagement with time. Compliance with GDPR makes you more proficient in data management for efficiency in all data handling stages.
Better Insights for Business Strategy Alignment
In business, effective management is all about being able to measure results. A compliance management program helps you understand your business better. It provides the necessary information to direct and control operations.
For any compliance management program to be effective, it must undergo an analysis phase. This is where you review all the details collected to get an overall outlook of the current compliance status. The assessment provides a basis for creating an action plan to fill any existing gaps.
The analysis phase is crucial as it helps you discover hidden insights into your business. It allows you to take suitable action to improve management and overall efficiency. The insights also help you drive your business strategy. You get to understand your business from its strengths, weaknesses, opportunities, and threats (SWOT) perspective. Your next course of action will entail driving new strategies to enhance efficiencies, grow your business, and protect it against possible threats.
Regulatory compliance is a legal requirement for your business. Failure to comply with the set standards puts your company at risk and threatens its survival. On the other hand, having a comprehensive compliance management program clarifies the business purpose and helps you implement relevant policies.
This enables you to drive initiatives that provide real business value. When properly implemented, compliance helps reduce risk and facilitates strategic alignment. Moreover, it increases business efficiency for all your business operations. The Techdee blog provides more insights into compliance management to put you on the right track.