In any kind of business, regulatory compliance is crucial. Failing in completing compliance functions could lead to many 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.
It is mandatory for every organization to adhere to the relevant laws, regulations, guidelines, and specifications that are relevant to its industry and geographical location.
The scope of regulatory compliance any organization needs to implement depends on the nature of its business. And achieving compliance requires adhering to laws and regulations covering everything from human resources to financial practices. In addition, the organization might need to adhere to other relevant local, national or international regulations depending on its industry.
But no matter what industry the organization operates in it is mandatory to complete regulatory compliance, however achieving compliance should not be seen as a hard task, because it exists for many good reasons and will have many good impacts on the quality of your work.
What benefits does regulatory compliance bring to your company?
Knowing which policies and procedures to implement in order to achieve regulatory compliance has many benefits. A comprehensive policy and compliance management program can be very helpful in achieving the necessary accreditation and more benefits to your organization which:
1- Reducing Risk
Having an effective compliance program will help your business decrease risks by preventing possible events from affecting your operations.
For example, the loss of data has a severe impact on your organization and could threaten its survival, here comes the importance of the audit compliance requirement for backing up your data.
The backup will ensure you pass your next control audit and protect your business information from any unexpected events that could destroy your data.
No matter the type of your industry, the reputational harm and potential financial losses resulting from a data breach could be catastrophic therefore regulatory compliance is a must.
2- Greater Efficiency
Every business aims for efficiency. Basically, there are two ways to improve your bottom line either by increasing revenues or by decreasing costs. And because increasing revenues takes a lot of effort reducing costs through increased efficiencies is a better way to improve your profit margin.
It is proven that a comprehensive policy and compliance management program can help increase efficiencies.
Any compliance process starts with some form of business analysis, and this is required to understand the current business state in order to create the relevant policies and procedures that should occur.
This analysis will help you identify process bottlenecks and inefficiencies which are stifling productivity in your business.
A great example of this is the implementation of policies that need to comply with the EU’s General Data Protection Regulation (GDPR).
Under this regulation, 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.
Failing to manage your data can result in it becoming disorganized and unmanageable over time. On the other hand, complying with the GDPR data protection regulations forces you to put measures in place to manage customer data. In addition, it helps your organization become more proficient in data management, ensuring the efficient storage, transmission, archiving, and destruction of data.
3- Better Insights and Strategy Alignment
You can only manage what you can measure, knowing that, compliance management programs are very helpful in providing the information you need to direct and control your operations which will help you gain better insights.
And as we have already explained, all compliance programs require an analysis phase, during which information will be gathered in order to specify the organization’s current compliance status, this state assessment will be used to set an action plan that aims to fill all existing gaps.
The analysis will uncover all hidden insights in your business and give you the chance to take the right actions to improve management and overall efficiency.
In addition, these insights resulting from the analysis will also help drive business strategy. Because when you understand the strengths and weaknesses of your business, as well as the opportunities and threats it faces, you will know what strategies can help you grow your business enhance efficiencies, and defend against any possible threats.
4- Brand Reputation
Compliance enhances the trust of your customers and stakeholders in your brand because compliance signifies that your business has met specific criteria to achieve a certain standard.
Achieving an ISO 27001 Information Security Management Standard for example signifies that the organization has designed and successfully implemented a comprehensive range of information security controls.
Customers will feel more secure dealing with an organization that is ISO 27001 certified because they know any information they share is secure and managed.
To sum up, 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.
Now that you have learned about how regulatory compliance makes your business better, learn about the 7 ways to meet regulatory compliance and standards.