Regulatory compliance is when businesses follow state, federal, and international laws and regulations to operate their business. Regulatory compliance helps businesses to set the highest state of conduct, integrity, safety, and ethical behavior in business.
The compliance landscape is complex, and businesses must stay on top of the regulatory changes for several reasons, like legal protection, gaining competitive advantage, gathering customer trust, and saving costs. But before we discuss how to stay compliant with the regulatory changes, let’s understand the key regulatory challenges in 2023.
Climate change and sustainability have become significant regulatory challenges in 2023 as climate changes, and sustainability are now major global concerns, and governments are under increasing pressure to take action. Governments are implementing more stringent regulations and targets to address climate change and reduce greenhouse gas emissions. Companies must assess and address the environmental impact of their supply chains, including the sources of the materials they use and the manufacturing processes they rely on.
There will be increased regulatory scrutiny and divergent regulations in 2023. As regulators continue to apply scrutiny and divergence to new business areas, there will be tight scrutiny in the area of ethics, conduct, and consumer investor protection. Regulations will be stricter around fairness, digitalization, crypto, digital assets, cybersecurity, etc. Regulators will also closely monitor customer complaints to direct and defend new or expanded regulations.
Privacy and cybersecurity will continue to be compliance and regulatory concerns in 2023. It will compel businesses to find unique solutions to safeguard their customers’ and investors’ crucial data. Regulators seek measures to strengthen data risk management in reporting, identity access, and vulnerability management. Businesses must also consider compliance with incident management, data collection and use, and privacy practices.
While transparency and reporting are important for any business, it holds special mention for financial companies as they need to share reports and disclosures with the regulators and the investors, the market, and their clients and customers. Regulators will focus more on risk management processes and their effectiveness to ensure data transparency and consistency within various corporate reporting and communication aspects, along with reporting timelines, issue escalation, etc.
In this dynamic business environment, new risks are always looming. While it is important for businesses to identify and mitigate any new emerging threats, they mustn’t lose focus on the basics. Remember, regulators will closely monitor the board’s decision-making and risk assessment. Regulators will expect boards and senior management to stature risk, compliance, information security, and audit comparably to other strategic functions and the ability to integrate critical challenges into the risk and governance framework.
Regulatory agencies will continue setting authority and guardrails in digital assets and payment. Regulatoy agencies will be increasing the payment space, innovation will continue, and we can expect to see more non-traditional players in the market. Regulators will use the existing regulatory guidelines to supervise current and emerging risks. We can also expect that banking regulators will allow banks to invest in a crypto asset and distributed ledger activities.
Scrutinize your existing compliance program and identify gaps or areas of improvement. Create a plan that outlines the steps needed to comply with new regulations and regularly review and update it as needed.
Follow industry news and subscribe to trade publications, legal updates, and government websites to stay informed of regulatory changes. Keep track of government agencies and organizations that are responsible for regulation and compliance, such as the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and Environmental Protection Agency (EPA). Utilize technology such as regulatory tracking software to receive automatic updates on changes in regulations. Attend industry events, such as conferences and workshops, to stay informed of the latest regulatory changes and developments. Consult with legal or compliance experts to receive guidance on the latest regulatory changes and their impact on the business.
A compliance office is at the helm of your compliance program. The person ensures that the business champions corporate integrity, accountability, and the highest standards of ethics.
Start by identifying departments within the organization responsible for compliance with the regulation. Appoint a compliance officer responsible for overseeing the company’s compliance program and ensuring that all departments are adhering to relevant regulations.
Clearly define the roles and responsibilities of each department in the compliance process, and ensure that employees understand their obligations. Establish clear lines of communication between departments to facilitate the sharing of information and to ensure that everyone is aware of any changes in regulations. Regularly review and update the compliance program to ensure it meets the latest regulatory requirements.
Keep your policies and procedures updated and ensure any regulatory changes reflect across all platforms internally. Investing in a GRC tool like VComply can be a wise decision. It’s a centralized platform that helps you to keep your policies and procedures streamlined.
Determine the training need and identify a program to help meet the training requirement. Choose an appropriate delivery method for the training program, such as in-person training, e-learning, or a combination of both. Involve relevant departments. Finally, evaluate the training program for its effectiveness and adjust as needed.
Staying on top of regulatory changes is not a choice but a must for businesses. Implementing a GRC software like VComply will help you maintain all data and policies in one place and track your regulatory compliances easily. VComply can help you track upcoming tasks and regulatory deadlines and automatically trigger necessary actions.
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