The year 2021 ushers in a new decade of business change, especially considering the roller-coaster that 2020 was. As organizations move forward, there are various compliance challenges both new and old that compliance officers must come to terms with. Compliance refers to playing according to the rule book, so amid geo-political changes, data privacy concerns, questions on operational resilience, and cybercrime threats, there is new interest in policy and regulatory mandates.
To shed some light, here are 5 pressing compliance challenges businesses will face 2021.
As workplace restrictions ease and eventually give way to business as normal, organizations will have to rethink their work models, ensure workplace safety, and assess their exposure to legal risk. With the onset of the new administration in the US, the Occupational Safety and Health Act (OSH Act) is expected to pursue COVID-related enforcements more aggressively.
OSHA had earlier issued guidance on preparing workplaces for COVID-19 and it expects employers to take steps such as:
● Developing an infectious disease preparedness and response plan
● Having policies and procedures for prompt identification of potentially infectious individuals
● Issuing flexible leave policies, in line with public health guidance
If employers fail to comply with standards, for instance, by not adopting virtual meetings as a control when the situation calls for them, there could be hefty fines to be paid on lawsuits.
Apart from OSHA, employers would have to pay attention to the Americans with Disabilities Act(ADA) and the Family and Medical Leave Act (FMLA) too. As an employer, you may also want to institute a pandemic response team and undertake workplace risk assessment to know who may be at risk based upon their regular workday interactions.
While opening the workplace in a safe manner, employers may find it difficult to dislodge work from home from its perch. Many find that it boosts productivity (while saving commute time and costs!) and, going forward, many companies may move to a partially-remote work model.
However, while work from home uncomplicated the path forward at the onset of the pandemic, it may have complicated compliance by a whole lot. For instance, how do you manage payrolls for employees who work out-of-state for half the month and in-state for the rest? Do your employees get stuck paying income tax in two states?
Alongside a web of complicated tax issues, you also have the world wide web and the issue of data privacy and security to heed to. With weaker Wi-Fi networks, more personal devices, and the absence of company IT security systems, the prospects of cyber risk increases. A single data breach can cripple your business and cause financial, legal, and reputational loss. Some other elements that employers will have to consider are:
● Work from home infrastructure
● Occupational safety and health
● Disability accommodation
● Insurance coverage in a WFH setting
Brexit has a direct impact on businesses in the UK and a direct impact on the US. Major finance companies in the US route their EU operations through London, and hence the implications of the Brexit deal are important. Banking services, for instance, no longer enjoy automatic right of access to markets in the EU. Likewise, professional qualifications won’t be recognized automatically. In essence, you would have to comply with different sets of regulations, for the UK and EU, wherever applicable, moving forward.
Freedom of movement between the UK and EU is also something that Brexit severed. New immigration rules have entered into force, but several visa restrictions have been removed. Importantly, data transfers from EU to UK and UK to EU will be treated differently. The UK does not yet enjoy an ‘adequate’ status when it comes to data protection, just like it does not enjoy ‘equivalent’ status for financial services. Finally, for a multi-country data breach you could be dealing with both, the UK's Information Commissioner’s office and an EU regulator.
With business ecosystems going digital the potential for big data to revolutionize how a company provides its services is unprecedented. However, given the legal, financial, and reputational ramifications of mishandling personally identifiable information (PII), such as passwords, payment information and passport number, it is possible for data to pose serious compliance challenges. You must be prepared to account for the flow of data through your organization, through all points, be it collection, processing, or storage.
Here are 10 compliance hurdles linked with big data:
● Inability to properly identify and classify data
● Lack of mapping data with the regulations that apply to them
● Lack of clarity on the ownership of the data
● Possession of large volumes of data that could be subject to a major breach
● Insufficient tools to manage and control the data through its lifecycle
● Possession of vulnerable infrastructure that houses data
● Inability to distinguish between public and private data
● Lack of controls with respect to third party big data service providers
● Insufficient knowledge of global regulations that apply to data being handled
● Presence of unprotected data on the cloud
As technology continues to disrupt the way businesses operate, maintaining a compliant environment will be a challenge but will prove to be a necessary safety net.
As consciousness of the fragility of the world we live in continues to grow, more attention will be given to the way businesses conduct their operations. What is the effect of non-compliance with environmental regulations? Penalties, fines, project delays, increased scrutiny, and above all, a tarnished public image are a few. Apart from these, there are physical risks such as floods and fires that can arise if environmental issues aren’t given due respect.
Depending on where you are located, you may have different levels of regulations to adhere to, for instance, county-level, state-level, and federal-level. Hence, it is good to do a full audit of your operations and note the regulations that apply to you. Some of them may pertain to hazardous waste, air permits, storm water, toxic substances, clean water, resource conservation, and so on. Being compliant is not a choice, really. But your organization can transcend the limits drawn by regulations and strive for what is socially desirable too.
Adopting low-carbon policies, using energy efficiently, saving resources through the supply chain, for instance, are approaches that build customer confidence and draw investor attention. The hard work put into maintaining legal compliance and setting green development targets can yield to economic advantages in the long-term.
One thing about these 5 compliance challenges is that juggling between multiple compliance regimes, such as PCI DSS and GDPR or HIPAA and CIJS, is hard. It becomes even more difficult if you do not have a way to oversee compliance on an organization-level. Poor communication, training, monitoring, and data management can hinder compliance. Being stuck in silos with spreadsheets and binders fails to provide the big picture and that is the gap VComply, an integrated GRC solution fills.
With it you can analyze your organization’s performance with graphs, delegate responsibilities to increase accountability, get real time alerts, obtain automated reports and much more. So, as you tackle the compliance challenges2021 has in store, commit to a smarter way of running your organization!
Good governance is essential for every organization. And government agencies are no exception to this. Government, regulatory agencies, and public sector companies need to comply with a myriad of regulations. Regulatory compliance comprises the rules and regulations connected to business procedures. When regulatory compliance is disregarded, then it can lead to a lawful penalty and damage in reputation. Some rules and regulations that government agencies must comply with include the Dodd-Frank-Act, the Payment Card Industry Data Security Standard (PCI-DSS),Health Insurance Portability and Accountability Act (HIPAA), and Federal Information Security Management Act (FISMA). Frameworks such as COBIT and NIST, a compliance standard, inform government bodies how to keep pace with regulations.
Let's take a look at some of the important regulations government agencies must comply with:
The Federal Information Security Modernization act made it a requirement for federal agencies to develop, document, and implement an information security and protection program. The act mandates that these agencies provide information security for the data and systems they and their industry partners manage.
Payment Card Industry Data Security Standard is a standard for companies that manage registered credit cards from large card schemes. The PCI Standard is commanded by the card brands, but it is supervised by the Payment Card Industry Security Standards Council.
This standard was built to develop security all around the cardholder data. Every company that acquires and progresses card payments should cooperate with the PCI-DSS. This includes all government agencies that take card payments for provisions.
The National Institute of Standards and Technology is a non-regulatory government company that improves technology, metrics, and standards to encourage creativeness and business competition among U.S. - based companies.
NIST creates principles to support government agencies and help them reach the requirements of the Federal Information Security Management Act (FISMA). NIST also helps those agencies by safe guarding their data. It creates the Federal Information Processing Standards (FIPS) per FISMA. The Security Of Commerce accepts FIPS, with which the government agencies must cooperate.
The main challenge for government agencies to follow compliance rules has been the inability to gather data and manage programs across the organization. The challenge is expanded because of mixed technologies used by various teams, and the inability to modify and scale according to administrative requirements.
To efficiently establish compliance, the involvement of all the stakeholders is necessary. The management needs to monitor and oversee the status of compliance across different systems, report any non-compliance, and implement measures to remediate issues.
The major governance challenges that a government agency faces are as follows:
1. There is a lack of an organized approach to manage compliance.
2. Compliance strategies are not followed through to the end to actually see benefits.
3. Junior-level employees are assigned to project management positions with limited help to be efficient and effective.
4. Agencies that work separately from each other keep introducing new rules and regulations, which further complicates governance.
Here are some of the costs of non-compliance that government agencies must consider:
Compliance errors can be a monetary cost, not just to an agency but also to individuals. Personal liability is an issue for compliance officers responsible for compliance at their agency. Honesty, integrity, and morals are a huge part of compliance, and individuals are held accountable for ignoring the regulations for their business.
When an agency fails to comply with the business executive necessities, it leads to a $5000 fine or imprisonment for the concerned officers.
Most of the time, compliance is restricted to a small number of divisions or people, but obeying rules often demands information from more functions. Thus, it's important for everyone in a team to be informed about the meaning of compliance, how it can influence their part, and how it qualifies into the broad view.
Failure to follow compliance in an organization often points to deeper communication and collaboration issues across an organization.
The lack of a well-defined system to handle compliance procedures can cost hundreds of wasted hours to an organization. Thus, it's important for organizations to employ a specialist to arrange the filings in the domestic dialect and file the proper forms at the domestic jurisdictions office.
The best and efficient way to manage good governance and appropriate culture within government agencies is to introduce an effective governance framework across the agency. At its core, the best compliance management systems offer the following:
Good governance relies on an administrative framework that helps the agency to attain its objectives. The agency should establish a sound governance framework that is embedded throughout the organization.
Establish processes and policies across the organization, implement controls, and create and conduct audits to test the effectiveness of controls.
Ensure that there is visibility of governance framework and good coordination among inter-related agencies.
Practical preparation helps to control and utilize resources efficiently, expand compliance capabilities, and develop a sense of responsibility across an organization.
Train employees and executive management in compliance fundamentals and help them execute their compliance responsibilities.
Here are a few ways in which compliance management software helps government agencies better manage their governance requirements:
Timely adherence to social, legal, corporate, environmental, government, and financial compliance helps agencies avoid fines and penalties. Compliance management software helps automate these activities, so agencies never fall back on their responsibilities or miss important compliance deadlines.
Compliance management software makes sure there is an appropriate record of inspections, assessments, and developments. It also helps agencies develop reliable processes and procedures to ensure everyone in an organization knows its compliance duties and responsibilities.
Compliance management software helps government agencies collaborate more effectively and save time on compliance activities. You can then allocate these resources to other areas where they need them.
While government agencies work to implement programs to better their citizens, they must also adhere to rules and regulations that help them meet these goals. To efficiently manage compliance and governance needs, agencies must employ GRC software tools such as VComply and establish a compliance strategy that helps them stay ahead of the curve. The VComply platform provides a suite of products that offer effective risk management frameworks and controls while revolutionizing regulatory compliance management. This tool enables seamless digital collaboration and gives you real-time risk management solutions.