Every industry faces its own set of challenges and must comply with certain laws, regulations, and guidelines. When these regulations change frequently, it can be difficult to stay on top of. Fortunately, there are plenty of solutions that use a mix of technology and artificial intelligence to make it easier. Unfortunately, not all businesses adapt very well. So what happens to your business when you don’t adapt to regulatory change or remain compliant? The answer is nothing but trouble. Today, we’re talking about regulatory change management and what can happen if you don’t keep up to date with the changes within your industry. Take a look below.
What Defines Regulatory Change
The idea and concept of regulatory change can be complicated. In business, regulations change frequently. Different sectors and industries have to conform to various standards and on top of that, regulations change regularly. Regulations come from different sources as well. Government agencies, industry organizations, companies themselves, and entire sectors can determine a new regulation that affects an entire industry. Any regulatory change can have a significant impact on the industry and failure to comply with those changes can lead to potentially adverse consequences. To mitigate this and keep up with these changes, companies have to have a system in place to remain up to date. There should be some kind of tracking system, a way to monitor and enforce compliance, and auditing/reporting procedures. Companies need to be ready to assess and manage how a change might impact their operation. There should be a dedicated team and an automated regulatory change management system set up within the company to ensure compliance is happening across the board. But compliance efforts don’t stop there. After a company identifies an issue, they need to take steps to avoid any negative consequences and take the proper approach to be compliant. Regardless of the approach a company takes, it’s absolutely critical to be proactive about protecting company interests in the face of ever-changing rules and regulations
One of the most significant consequences of failing to comply with regulatory changes is legal trouble. Every year, businesses are fined or even shut down because they failed to comply with new regulations. This is a costly mistake and can be quite severe in terms of Financial and reputational damage. Part of the appeal of using a regulatory tech solution to manage an automated compliance change is to avoid these legal troubles. Make sure you have a system in place for tracking new regulations and ensuring that your business is compliant. By taking these steps, you can avoid costly mistakes and protect your business from legal troubles that can eventually lead to shutting down, lawsuits, jail time, or much worse.
As part of your daily business operations, you probably try to find ways to cut costs instead of increasing them. Unfortunately, non-compliance can lead to higher costs for your company and your customers. In addition to fines and penalties, failure to maintain compliance standards might actually lose your business. Compliance programs fail all the time, too, so companies need to ensure they have a good one in place at all times. If customers don’t think they can trust you, they won’t patronize your company. That loses money in and of itself. No amount of marketing or rehabilitation will bring those customers back. Implementing a robust compliance program helps reduce liability risks, increase customer confidence, and avoid costly consequences well into the future.
Data is always big business. People freely give their data to companies each day and trust those companies not to sell, mess with, or compromise it. Unfortunately, businesses sometimes fail spectacularly in this regard. That’s why there are certain regulations regarding data that companies must follow. This is a big part of regulatory compliance in a general sense. Without proper compliance standards, there’s no transparency, no data integrity, and more of a likelihood that data will be compromised. Organizations with weak compliance controls and a poor review process make themselves more vulnerable to attacks and compromise, ultimately damaging their reputations and isolating customers along the way.
Nobody likes to pay fines. Unfortunately, fines and fees can be a success for failure to keep up with certain regulations or enforce them properly. Businesses that find themselves on the receiving end of a fine or fee might run into financial problems down the line. Being compliant saves you money and plenty of other headaches along the way. By ensuring your employees are trained on your compliance standards and that you’re monitoring, auditing, and enforcing everything properly, you can stay on top of your industry’s regulatory compliance standards and continue to operate without fear of financial loss.