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Just as citizens must obey their country’s laws, businesses must follow industry laws and regulations. This is known as “compliance.” Compliance is the structural framework organizations use to follow industry-specific standards that streamline operations.
A compliance management program governs compliance. Companies use it to create policies, train employees, and maintain accreditation with regulatory bodies. The systematic process ensures an organization adheres to laws, regulations, industry standards, and internal policies. A compliance management platform can actively monitor and maintain conformity across all operations, overseeing security controls, internal audits, third-party risk assessments, and more.
This blog post explores the benefits of compliance management, the importance of adhering to security standards, and how to overcome major challenges.
This is the ongoing process of monitoring and assessing business processes and systems to ensure they adhere to relevant laws, regulations, and industry standards. It helps organizations mitigate risks, avoid costly penalties, and protect their reputation. A compliance management program should also cover the business values, workplace culture, and risks. Compliance management generally involves two areas:
A good compliance management program can support your organization's compliance efforts and risk management strategy. Non-compliance can result in many negative consequences, including business disruptions, costly fines, and data breaches.
Compliance management is crucial for organizations as it ensures they adhere to all applicable laws and regulations, mitigating legal risks and demonstrating a commitment to responsible business practices. Here are some reasons why compliance management is important:
Legal compliance helps organizations avoid costly penalties, lawsuits, and reputational damage. It also protects consumer rights and prevents business disruptions. Regulatory compliance is essential for data security, operational integrity, and public safety.
Maintaining compliance shows a commitment to quality standards, social responsibility, and ethical practices. It builds trust with customers and stakeholders, ultimately making the company more attractive to potential clients. It also projects an image of reliability and integrity that sets the company apart from competitors.
Proactive compliance mitigates risks by establishing a structured framework that identifies potential risks and implements preventive measures to minimize their likelihood and impact. It protects organizations from legal repercussions, financial losses, and reputational damage.
Customers love companies that comply with laws and regulations and are more likely to purchase their products and services. Legal and regulatory compliance improves brand awareness and prevents complaints and product returns, which boosts business revenue.
Compliance management examples include healthcare compliance, financial compliance, and technology compliance. These three examples help you to understand better how compliance management works.
Effective compliance management involves continuously monitoring and evaluating business operations to ensure they follow industry and legal standards. Follow this compliance management process for perfect execution:
Creating an effective compliance management program involves establishing controls to ensure employees stick to the laws and regulations governing business operations. Here are seven crucial components of a compliance management program.
Have clear roles and responsibilities when creating a compliance management program. Determine who will be responsible for the compliance program, the resources dedicated to compliance, and how compliance information will be escalated. Adopt a top-down approach to managing compliance risks.
Ongoing risk assessment helps an organization proactively identify potential threats, evaluate their impact on operations, and implement targeted controls to mitigate them. This ensures greater compliance with legal and industry standards and minimizes potential negative consequences.
Read More: Cybersecurity Risk Assessment: Protect Your Business Now
Policies establish a framework that guides an organization's operations and ensures alignment with legal, regulatory, and ethical standards. Procedures support policies by providing a clearer and more structured approach to compliance management implementation.
Employees must be trained to follow a compliance code of conduct. This makes them aware of the company's policies, legal regulations, and ethical standards. It equips them with the knowledge and skills to act appropriately, minimizing compliance risk.
A good monitoring platform like Atlas Systems allows organizations to continuously verify adherence to regulatory requirements. It helps them identify compliance issues in real time and correct them before violations occur. Ongoing compliance mitigates legal risks and reputational damage.
An IRP outlines a company's structured steps to detect, respond to, and recover from security incidents. It demonstrates the proactive measures to be taken to mitigate risks and adhere to regulatory requirements. A detailed IRP shows an organization is fully committed to fulfilling compliance obligations.
Read More: Cyber Incident Response & Recovery: A Step-by-Step Guide
Employees must know how and when to report compliance violations. Company policies and procedures should outline the exact process, like reporting via a toll-free hotline or anonymously. When employees raise issues early, there’s ample time to prevent bigger problems from materializing. An effective whistleblowing process promotes a culture of transparency and accountability within the organization.
Compliance management is more than just ticking boxes; it’s about safeguarding your organization. It can help you stay ahead in a competitive landscape. Here are the top benefits of compliance management.
A lawsuit can be costly, and funds meant for recruiting or business expansion can be spent on legal redress. It can severely affect your business reputation, and you may spend years trying to recover. Compliance management proactively identifies and mitigates potential legal violations, ensuring adherence to regulations and minimizing the chances of lawsuits and penalties.
Compliant organizations offer a consistent brand experience across all customer touchpoints, enhancing their reputation. Investors, customers, prospects, and regulatory bodies know that the organization is committed to maintaining high compliance and ethics standards. This can open new business opportunities, accelerate sales cycles, and offer a competitive edge.
Compliant organizations provide employee training, conduct regular audits, develop comprehensive safety policies, and ensure adherence to evolving regulations. This helps prevent accidents and reduces costs associated with incidents—because staff know how to respond. And by demonstrating a commitment to safety, the organization also improves its reputation.
Compliance management improves operational efficiency by establishing standardized processes, streamlining workflows, minimizing errors, and reducing redundancies. This leads to smoother operations and better resource utilization. Many compliance management systems use automation to streamline workflows and repetitive tasks like collecting audit evidence and performing risk assessments. When these manual tasks are eliminated, the compliance team can focus on high-value tasks to boost productivity and business impact.
Through regular monitoring, risk assessments, and standardized procedures, a compliance management system identifies potential issues and quickly responds to risks by taking preventative actions. The system conducts risk evaluations to ensure compliance measures are prioritized to mitigate risks. High-priority risks are tackled as quickly as possible.
Compliance management tools help organizations automate compliance processes, ensuring adherence to external and internal regulations. The dedicated software continuously monitors systems for quick risk identification, enforces regulatory standards, and generates reports for audits. Manual checks are replaced with automated data collection and analysis, which reduces human error and ensures timely compliance.
Follow these best practices to create a good compliance management program.
Your organization’s readiness to handle compliance issues impacts the company’s strategies, employee morale, business reputation, and profitability. This is why you must proactively establish compliance policies and processes and ensure compliance programs are easily accessible to all stakeholders. The chief compliance officer must collaborate with other departments to better manage compliance standards. This gives them visibility into organizational compliance so they can perform regular assessments to mitigate violations.
Identify, assess, and prioritize compliance risks, allocating resources and implementing controls to mitigate the highest risks. A risk-based approach allows you to consolidate and centralize risk management based on specific standards. Using this approach makes it easy to spotlight the most severe compliance risks and take actions to reduce issues, violations, investigations, and fines.
It’s impossible for organizations to fully comply with regulations if their employees don’t follow compliance policies and procedures. Employees must understand and commit to the organization’s compliance and ethical boundaries. Educating them on relevant regulations and company policies empowers them to make informed decisions and avoid compliance violations.
This allows you to proactively identify potential areas of non-compliance and take corrective action before issues escalate, minimizing legal and financial risks. The chief compliance officer can review the compliance framework to see where compliance efforts currently stand and whether any at-risk areas could potentially be fined. Regularly performing compliance audits ensures compliance with relevant regulations and prepares an organization for its next external audit.
Any good program requires regular review to be effective. Adopting this approach ensures weaknesses are quickly spotted and improved. Review your compliance program at least once yearly and update it as laws and regulations change. Regularly evaluating if everything is current helps firms ensure they continue to meet their regulatory obligations.
Many compliance teams struggle with inefficient processes and outgrown technology and spend significant time on manual compliance management. This is time that could be spent more productively. Here are the top challenges in compliance management.
Organizations that use manual processes take hours to update systems to accommodate a single regulatory change. Reliance on manual tools and processes makes companies ineffective at navigating today’s fast-evolving regulatory landscape.
Organizations must constantly adapt their practices to fit new regulations and navigate complicated legal interpretations to adhere to privacy laws consistently.
Without clear visibility into operations, compliance teams can't be sure their organizations adhere to regulations across the board. A lack of visibility prevents compliance officers from effectively identifying and addressing compliance risks, leading to potential violations. A manual and siloed approach to compliance management hinders visibility, and minor issues quickly snowball into bigger problems.
An effective compliance management program is highly dependent on data integrity and consistency. However, lack of standardized processes and disparate systems make it difficult to aggregate data for further analysis or ensure its integrity and completeness. When data across systems is not reliable or uniform, it can be difficult to verify information accurately.
Sending sensitive information through communication channels you don’t have 100% control over can leave security gaps. It can be difficult to ensure that sensitive information is protected from unauthorized access, accidental disclosure, or malicious attacks.
Compliance management can be hard even for organizations committed to the process. Here’s what you can do to overcome compliance management challenges in your organization.
The best remedy for preventing siloed systems is a digital solution employees can access from anywhere. Information is in one central location, creating a single source of truth. Organizations can systematically identify and address compliance issues in real time, minimizing the risk of violations by ensuring adherence to regulations. Atlas Systems uses AI to deliver a proactive approach to risk and compliance management. Automated alerts and reporting features streamline the compliance management process.
Trained employees understand and adhere to industry regulations and company policies, minimizing the risk of non-compliance. You can achieve this at scale by incorporating mandatory comprehension questions and the end of every training session.
A secure communication platform ensures that only verified users access it through administrative controls and closed user groups. Data and messages can be sent via the platform, which protects sensitive information, mitigates risks of unauthorized use, and maintains system integrity.
This ensures that following industry laws and regulations isn’t just a box-checking exercise but is actively integrated into the company's core principles. The result is a more sustainable and ethical approach to compliance that reduces risks and enhances the company's reputation. By aligning compliance management with business goals and values, an organization ensures compliance, creates value, and achieves excellence.
Compliance management helps you gain a competitive edge. As compliance regulations evolve constantly, companies with robust compliance management programs will stay ahead. You can use compliance management software to manage your compliance program. It centralizes all your data, automatically handling risks.
Atlas Systems is a robust compliance management software that offers features like risk management, cybersecurity, third-party risk management, and more. It helps organizations quickly respond to ever-changing regulatory requirements. Try it today and easily manage compliance risks from one place.
Compliance policies should be updated at least once a year to ensure they follow the current laws, regulations, and industry standards. Some industries require more frequent reviews.
Healthcare compliance focuses on patient safety, data privacy, medical ethics, and adherence to industry regulations, while financial compliance focuses on data security, fraud prevention, and regulatory reporting.