Choose another country or region to see content specific to your location
May 28, 2021
Escalating costs of running the organizations especially in the last year is a cause of concern.
Companies today exist in a challenging environment. Policies, regulations, and market dynamics have constricted profitability. Among others, regulatory requirements have also driven up general compliance expenditure. It can be assumed that they will continue to increase. Companies have to comply with current regulations as well as future demands. This would make a lot of companies control spending to steer clear of fines and penalties while adhering to forced compliance norms.
Controlling compliance costs are imperative. Every organization is reviewing means to limit and tighten the compliance budget. Many CFOs and business leaders would like to spend a trickle of their budget on compliance. Yet compliance teams find it tough to cope with the demands based on existing resources.
Over the years, time, and headcount have always been in scarcity to get the job done. Compliance teams more often, do not receive the support of relevant departments.
With thinning budgets, what can organizations do to reduce the cost of compliance while staying compliant? Perhaps a combination of technology and creativity can spring a little hope.
Use experienced compliance staff for tasks that require their specialized knowledge, experience, and judgment. Their time and talents are best spent on activities that can only be done by a compliance professional.
Repetitive administrative tasks like these wastes a lot of time and can easily be automated, freeing up your compliance department to tackle major initiatives.
Streamline the compliance process to get the best results in terms of impact, efficacy, and cost.
A few ideas on how an organization can get the most bang out of the compliance buck.
▪ Training prioritization
Compliance is a maze of documents, regulations, and fulfillment. It can often lead to misinterpretation. The paucity of time for analysis can lead to unforced errors. Training ensures that insights and skillsets keep compliance teams at the top of the game.
▪ The planning stage
Depending on the product or industry, it can help to get compliance at the strategic planning stage. Very often, time gets squandered with new product or service ideas without roping in the compliance teams. Compliance teams when introduced at the planning stage can then muster adequate time to find the grey areas within the regulatory frameworks. Alternate routes can be developed to garner a competitive edge.
▪ Leveraging of costs
Tech solutions can often wear many hats. Compliance teams can use social media monitoring tools for identifying potential complaints and product drawbacks. Other tech solutions across the organization can be explored.
▪ Avoid a myopic approach
Shortsightedness is a dangerous phenomenon. A penny-wise and pound-foolish approach may result in temporary savings but could hurt long-term profitability. Compliance teams can get exhausted from keeping up with manual processes. Reputation sometimes takes a hit.
▪ Invest in a compliance management system
It pays a lot of dividends to digitize the compliance process. Especially so if the teams utilize it to its full functionality. An additional bit of training can increase utilization and increase efficiency.
Automation can help to empower teams to undertake basic regulatory research. It keeps the organization audit-ready at all stages. It automates reminders, monitoring of tasks and activities as well as audit trails.
▪ Adopt a forward-thinking approach
Compliance cannot be viewed as a sunk cost. Hiring the right people, aligning processes effectively, and harnessing technology to the maximum often leads to tangible outcomes. A forward-looking perspective can assist the organization to steer clear of the turbulent waters of GRC. Compliance must be intrinsic to the organization’s daily workflow. This leads to the optimization of time and resources. It results in lesser red flags. Changing course means loss of working hours and incurring expenses to circumvent new risks, etc.
Tone from the top matters. Senior management must support strong policies. This permeates a trickle-down effect and helps to create a much-desired ‘compliance culture’.
▪ The transition from manual to automation
Automating can help cut time and costs. Multiple challenges such as managing and reporting on compliance risk are taken care of. Process inefficiencies get weeded out. Data management gets optimized while limiting human error to the maximum. More importantly, it enables compliance teams to deliver value-added solutions.
A failure to integrate these best practices and technology into a compliance program creates room for error that can result in more unexpected costs. Data entry errors are one such example. This can lead to multiple reviews to ensure data is correct. Compliance teams work for extended time blocks. It could lead to missing out on the big picture. Technology can help smash these blinders. Adopting such simple and creative steps can help organizations trim compliance costs and yet stay resilient and compliant.
The author Dhruv Nagarkatti is CEO at Quant LegalTech.
Do you have any questions on Compliance software? Or do you want to implement one for your organization? Visit our website and drop your inquiry here: https://quantlegaltech.com/ or write to email@example.com