Government and regulatory bodies have set in some compliance standards and controls in place to safeguard the interest of end users and indeed of business organisations. With innovation, new areas of businesses and related compliance practices are being introduced in the global economy. Often they are taking the role of disrupters. This only has led to increased complexity and new angles to business practices. With this view of ever changing business environment scenario, compliance management has to be a continued process and not a one-time endeavour. Let us explore why compliance management will be a key piece of corporate strategy in times to come.
Increasing Regulatory Information
With innovations and technological breakthroughs driving the growth of businesses, the expansion in terms of size, location, and new areas & models of business practices has been proportional. The rapidly changing business environment has led the regulators globally to come up with updated and newly structured regulations. According to Thompson Reuters 2016 Cost of Compliance survey report, 73% of organisations are expecting regulators to come up with increased number of new regulatory information and 22% expect a significant increase. In India, for instance, a manufacturing unit on an average, has to comply with as many as 70 statutory regulations and laws, face numerous inspections and file more than 100 returns in a financial year.
Increasing Risk of Security Breaches
People, government, and businesses today are dependent on technology more than ever for inter and intra-connectivity. Technology forms the implementation and delivery backbone of reforms in both developed and increasingly in developing worlds. With changes in consumer behaviour pattern from retail or offline interactions to online, businesses are faced with continued compliance with ever-evolving cyber security standards. Amidst increased sophistication of attacks, compliance with the security standards provides a credible deterrence though understandably it is not a panacea to all such intrusions.
Businesses today are handling sensitive information of customers more than ever. In view of this, it is very important that the businesses have proper safeguards in form of applicable compliances in place. The cost of non-compliance 2.65 times of compliance. The financial penalty a business has to take upon is sometimes crippling. However more than the financial impact, the impact on hard built reputation and trust of a business is often irreversible.
Standardization and Portability
Compliance with regulatory or internal controls drives standardization. Thus, it standardizes product output, security network implementation, business practices, and others, across the organisation in any industry sector. The standards help organisations to benchmark and measure performance across its units based out of different locations. This in process enables streamlining of accountability with clearly defined boundaries already in place. In other words, a business can now track the outliers in a process more effectively. When organisations in a particular industry implement and follows through the compliance standards it creates a level playing field. Moreover, they pools the resources together to utilize them through transferable skill sets.
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