Does your organization see compliance as a necessary evil, a burdensome and costly checkbox to keep auditors satisfied? In the ever-evolving landscape of
GRC, compliance is often viewed as a significant cost that makes it harder for an organisation to pursue growth opportunities.
Currently, compliance is largely seen as a cost-center – so the challenge now is bringing the IT security and compliance teams out of the shadows and demonstrating the value they offer the business as enablers, not roadblocks. What differentiates successful, forward-thinking businesses is that they look at compliance as part of a long-term vision.
They make compliance their competitive advantage in their approach to GRC. Let’s explore some of the biggest challenges and how you can transform them into competitive advantage for your organization.
“It’s difficult to plan ahead and justify the increase in compliance costs.”
According to the Cost of Compliance 2022 report, one of the greatest challenges anticipated by compliance officers is a lack of budget and resources. If you’re treating compliance as a mere checkbox exercise, this can make it extremely difficult to proactively plan and justify the associated costs. Your organization’s focus will likely be primarily on reactive measures, so you can meet the necessary regulatory requirements and keep the auditors happy.
Delivering tangible reports on governance, risk and compliance is an ongoing challenge. Often the effectiveness of a control is subject to interpretation and can lack objectivity. Providing accurate, timely and impactful updates to senior management is often difficult and time-consuming, and can be counterproductive if there is either too much or not enough detail.
Turn compliance into a strategic asset by shifting from a reactive to a proactive approach. There’s no point measuring things that are not appropriate. Rather than sticking rigidly to a framework, the metrics you use must be appropriate for your organisation and the audience you are reporting to. Use different metrics for different levels of management according to what they need to see. Senior management need less detail than control owners, for example – but they are likely to want to see the numbers in terms of cost. By continuing to invest in compliance, what results will they see in terms of ROI? What’s the financial impact of not adhering to the latest regulations? What about reputational impact?
Let’s take, for example, a financial institution that proactively invests in a robust anti-money laundering (AML) program. By continuously monitoring transactions, they not only meet regulatory requirements but also discover patterns that help them uncover fraud and suspicious activities more efficiently. This both enhances their regulatory compliance and protects them from reputational damage and costly fines. This proactive stance can provide a competitive edge by enhancing your reputation for trustworthiness and reliability.
And by communicating this to your senior leaders, you can help them understand the importance in alignment with organisational goals for growth.
“We keep having to duplicate controls to meet new compliance requirements.”
Whenever new regulations come into effect or existing regulations are updated, you might find that duplications are almost an inevitable by-product, particularly when finance and compliance teams are manually administering controls. This creates inefficiencies that often lead to the view of compliance as ‘burdensome’ to the organization. It also makes reporting on compliance activity unachievable.
This is where automation can significantly reduce inefficiencies around compliance. By automating your processes with the right GRC software, your organization can continuously adapt rather than rewrite your controls and match the view of control to the level of the person viewing it. By abandoning current disparate controls of spreadsheets and other manual processes, you can transform your compliance operations into a streamlined and effortless operation, saving you time and money – and reducing the risk of human error.
Consider, for example, a scenario where an e-commerce platform automates its control testing to ensure the security of customer data. By implementing technology solutions and standardized procedures that allow for swift adaptation to new requirements, it can reduce both human error and operational inefficiencies. This not only saves time and resources, but also makes the organization more agile in responding to new compliance challenges. The result?
It gains a competitive edge in a crowded marketplace.
“It’s difficult to allocate the right resources for compliance.”
If you’re approaching compliance reactively, it can be incredibly difficult to allocate the right resources for compliance. This stems from two primary reasons:
Regulatory compliance is approached on regulation-by-regulation.
The organization lacks a proactive, integrated compliance framework where business objectives and risk drives compliance behaviour.
If you’re currently only looking at each regulation independently, your organization will struggle to have a harmonised and unified framework to manage compliance proactively. For example, if a new regulation is introduced, the business will then have to allocate additional mandatory activities such as control testing and attestations. The problem with this is that these aren’t then being synchronized with any existing compliance activity, as they are being carried out by different stakeholders. There is no overarching framework providing visibility.
When a compliance function is created to react against regulation obligations as its primary goal, the function then inevitably becomes an audit-heavy, reactive team that spends most of its time documenting control tests and logging incidents. When a new obligation arises, more resourcing is required but the business then struggles to justify the increased cost.
A proactive and integrated compliance framework, on the other hand, has regulatory obligation as a by-product of its outputs. The primary focus is instead on making sure processes, assets and controls are in place to proactively reduce any risks that might prevent the organization from achieving its objectives. By having an integrated framework in place, controls are harmonised and designed to remove the need for duplicated processes – in other words, test once to satisfy many.
If a control fails, the business can then understand its impact on the whole business and prioritise mitigating plans accordingly. Once mitigation is achieved, the business can then look at improvements and proactively drive efficiency in its operations as opposed to treating compliance as just another regulatory tickbox.
Ultimately, this frees up SMEs to focus on looking over the horizon in preparation for internal and external changes – for example, new products or services internally or new external regulations.
“The same compliance challenges keep reoccurring.”
Reactive compliance efforts often capture incidents but fail to prevent their reoccurrence. This is because incident management is often treated as a reactive audit exercise or doesn’t move beyond simply capturing details. An organization might prioritize its resources by explaining and detailing an incident, then justifying what actions have been documented to mitigate it.
However, the organization isn’t feeding this incident into a wider compliance management framework, where mitigation activities enhance the overall framework rather than just the specific occurrence. Without improving the underlying control quality and framework, the organization can’t say with confidence that it is secure against such an incident reoccurring.
This is why it’s far better to focus on risk management and tie it to your organization’s objectives. Instead of merely reacting to compliance incidents, you should proactively take steps to identify and address the root causes.
As an example, imagine you are part of a manufacturing company that experiences a product recall due to regulatory non-compliance. In response, you help implement stringent quality control measures and continuous monitoring of manufacturing processes. By taking this proactive approach, you reduce the likelihood of repeat incidents and position the company as forward-thinking and accountable.
This not only minimises risks, but also enhances the company’s reputation and gives it a competitive edge.
“Measuring the effectiveness of controls is challenging.”
Many organizations struggle with assessing the true effectiveness of their controls, often confusing compliance with security. Just because an organization meets the minimum requirements for compliance standards doesn’t mean it’s not still open to emerging threats. Most compliance standards don’t go into enough detail when it comes to defining what sensitive data is and how to protect it.
Simply claiming that a control is ‘effective’ does not automatically make it secure.
Consider designing controls to align with industry best practices for securing customer data. By demonstrating the actual effectiveness of controls through regular security audits and penetration testing, you’ll enhance your organization’s reputation so it can differentiate itself as a security-conscious company. This not only ensures compliance but also builds trust, putting you ahead of the competition in the eyes of your potential customers.
In conclusion…
Compliance doesn’t have to be the weakest link in your GRC framework if you take a proactive approach. Not only will you meet current requirements, but you’ll also future-proof your organization, reduce inefficiencies, optimize resource allocation, prevent recurring issues and enhance your reputation for security.
By being proactive and addressing the pain points, you can transform it into a powerful competitive advantage.
Want to discover how SureCloud can help you transform your approach to compliance?
