20 years ago, the terms compliance and compliance obligations were the ones that businesses left their finance teams to deal with.
Yet today, meeting FINRA requirements (or those of their equivalents such as the FCA in the UK) is only one strand of a company’s compliance obligations.
We’ve all seen the potentially catastrophic impact that compliance breaches can have.
Yet the survey data from Deloitte & Touche shows some interesting results.
An incredible 40 percent of businesses don’t even perform an annual risk assessment on their compliance obligations and exposure.
Keeping to Compliance Obligations in Cyberspace
One of the biggest compliance risks to businesses in the 2020s stems from the following fact.
So much business activity takes place online.
The internet has brought a world of opportunity to businesses and their customers, but with it have come a whole new set of compliance exposures.
Web compliance automatically leads people to think about areas like cybersecurity and data protection.
For sure, these are important compliance considerations, but they are only the beginning.
Other areas of web compliance include adherence to Competition and Marketing rules, for example ensuring all reviews are genuine and meeting the accessibility requirements laid down by the American Disabilities Act.
This latter requirement is one that can often trip businesses up.
Just as a physical business must be accessible to, for example, wheelchair users, so a website must be accessible to all.
A compliance breach here can result in a fine of as much as $75,000.
Compliance Boosts Your Business
Compliance is often perceived as something to be endured.
A little like a visit to the dentist or that police vehicle with his speed gun, we know it is there for our own good.
But we might approach it with a sense of dread.
Yet while people are quick to discuss the consequences of a compliance failure, it is easy to overlook the positive impact that proactive compliance management can have.
For example, research carried out last year by Globalscape found that by carrying out periodic compliance audits, businesses saved themselves on average $2.86 million per year.
Beyond that, though, strong compliance principles are good for business and for a company’s brand image.
Think about it.
Say you have two potential suppliers and one is more transparent than the other about its approach to compliance monitoring.
Which will you feel most comfortable about doing business?
Managing Compliance Obligations Effectively
This is all great, but we opened by saying that compliance can be something of a moving target.
Compliance breaches are seldom down to fraud or other unethical practices.
But they are more common because a business was not properly aware of its compliance obligations in the first place.
Using external expertise to form a robust compliance framework is fine – in fact, it is recommended.
However, once it is in place, implementation can only come from within.
Ultimately, compliance is everyone’s responsibility.
And it is one that needs to be taken seriously at every level within the organization.
Petr is a serial tech entrepreneur and the CEO of Apro Software, a machine learning company. Whenever he’s not blogging about technology for itechgyan.com or softwarebattle.com, Petr enjoys playing sports and going to the movies. He’s also deeply interested in mediation, Buddhism and biohacking.