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How to Overcome the Challenges of Effective Compliance

Compliance Automation

As an automation, workflow and decisioning platform, Checkbox is at the forefront of digital transformation in all areas of risk, governance and compliance. And, with the deployment of automated compliance solutions comes opportunities for organization to increase their competitive advantage. This is a fundamental ingredient for commercial and operational success in the era of growing financial and non-financial regulations, as well as more demanding customer expectations. In this article, we will not simply look at how automation and technology contributes to delivering this competitive advantage. We will also explore the many challenges of modern-day compliance and how businesses need to respond to them.

Explore the common automation use cases for compliance teams.

Obeying a particular law or rule, or acting according to an agreement

The term, “compliance” means different things to different people. Some shudder at hearing the term after painful past interactions with compliance teams and requirements. Others feel a sense of structure, clarity and certainty. For the purposes of this post, we use the term compliance to describe any act, actions or processes designed to meet an established approach, standard or regulation. Most organizations seek to design their compliance strategy around meeting both internal standards, as well as to adhere to external regulatory obligations.

Compliance Challenges

Compliance requirements are rapidly growing in most industries, none more so than in the financial services sector. Privacy, security, contingency planning, vendor outsourcing, and risk management have evolved from good practice, to regulatory obligations. Expectations from regulators, customers and the public, have increased off the charts.

The core challenges of effective compliance

  • Complexity, lack of resources and the scale of obligations.
    Companies are struggling to meet basic requirements, that from the outside appear so simple to achieve. The fail points in compliance come from the sheer scale, complexity and the separation between compliance experts and the areas and people required to comply. There is also a lack of cohesion when it comes to regulations and compliance, with different countries and even states having their own requirements. The ever-growing compliance requirements mean that most compliance teams do not have the resources and crucially the technical tools to remain compliant.
  • A lack of effective technology and support.
    Most IT departments do not prioritize the operationalization of risk and compliance processes. Front-of-house technology or large IT infrastructure projects usually take precedence. There is little or no automation, workflow and reliable intelligent decisioning engines to help with productivity and efficiency.
  • Most compliance processes are manual.
    Many compliance and risk professionals have to rely on tools like Excel, email and in many cases entirely paper based. This can lead to poor quality work and a general lack of transparency in reporting and data.
  • Poor data and performance management.
    Without automation and workflow tools, the measurement of performance and related trends is onerous and slow. This increases risk and compromises quality.

Responding to Compliance Challenges

To maintain organizations’ competitive advantage in a world of growing operational costs, compliance teams’ need to assess how they are structured and operate. They need to adopt operating methodologies and technology that best leverage their human expertise, but also allow them to operate at scale.

See how Checkbox was used to increase compliance and gain a competitive advantage in our Assurance Lab Case Study.

Applying Agile Methodology to Compliance

The big shift of the last decade was moving to agile product and technology development. This has more recently moved to agile business processes being implemented across compliance, risk and governance practices. In most cases, it improves business performance and process effectiveness. But it also presents new challenges to compliance teams that need to influence those processes to effectively achieve compliance outcomes.

Business Empowerment

Compliance teams can’t own compliance outcomes on their own. The business functions need to take responsibility for compliance within their area and lean on compliance teams for advice or support as needed. The main barrier to this in practice is that compliance teams can’t be involved in everything. Others need the knowledge, awareness and effective process designs to trigger when to engage compliance teams.

Effective Integration of Compliance Across Your Organization

Compliance professionals need to minimize the friction for all business teams dealing with “compliance”. It’s one thing to scare business users into being compliant, but it’s all too easy for them to turn a blind eye or otherwise find ways to avoid it. The onus is on compliance teams to prove compliance can be achieved without unnecessary impacts or time-wasting of the business. There is also a growing need to position compliance as not just a painful necessity, but essentially an opportunity to differentiate the business in an increasingly competitive market.

Automation and Integrated Workflow

The way to enable agile processes, while empowering the business and ensuring interactions with compliance is seamless, is through integrated workflows and automation. Integrated workflows ensure compliance teams are engaged effectively, consistently, and at the right point in each process. This minimizes their time and level of input required, while helping to guide teams to get the right outcomes.

No-code automation presents new opportunities for the compliance efforts to dramatically increase the quality of compliance actives and to do so at scale. Automating business processes can achieve ‘compliant by design’ workflows, approvals and reporting. This can remove or replace much of the ad-hoc, manual and mundane risk and compliance processes that are often prone to human error. You can also automate the roles and requirements of compliance functions to empower your compliance teams to focus on monitoring of the business activities, the big picture of compliance risks and issues, and the evolving landscape of requirements.

 

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