Compliance management has drastically evolved in the past few years. And while companies don’t often feel it, these positive changes are helping hundreds of thousands of companies, and their executive teams grow consistently and avoid financial disasters that could cause significant problems within their organizations.
According to 70% of compliance managers, the pandemic increased their dependence on technology. One technology that they depend on the most nowadays is a compliance management system, or compliance management software. So what is compliance management software, and how can we operationalize digital compliance with it?
Compliance management software is a tool that can help compliance managers and teams automate compliance tasks, identify, assess, manage risks, and implement policies. With it, they can help organizations achieve better ways to avoid getting in trouble for non-adherence to regulations, standards, and internal controls.
So why is a compliance management tool a necessity for any organization? Here are some compelling reasons.
Non-compliance often results in financial loss due to carelessness or crime. 86% of companies surveyed agreed that compliance management tools have helped avoid financial crime. Compliance exists mainly so that people will not be able to cheat a company’s system for personal gain. By digitizing aspects that provide that check and balance, companies can avoid or address these crimes better.
Some features that help avoid financial crime include:
With these systems in place, it becomes a whole lot easier for compliance teams to review implement, distribute and attest policies organization-wide and ensure that all policies and measures are followed. Compliance managers can leverage the support of systems and automation that help encourage full buy-in to internal policies.
But it doesn’t end with internal policy buy-in. Compliance management systems also help organizations ensure that employees and staff adhere to policies and procedures. One example would be mortgage lending. With compliance management software, companies can now create a compliance task library to line up obligations and controls to reduce mortgage lending-related risks.
Consistent compliance without having to follow up regularly is the key to better monitoring and control. When those are consistent, compliance managers can spend more time on other parts of their roles, including risk management and analysis.
Integrating a compliance management workflow with a customer service tool, for instance, will help companies ensure that their support teams follow all protocols when providing refunds, processing returns, and other support ticket tasks that need more oversight.
Now that you know the importance of compliance management systems, here are some tips for operationalizing your compliance processes with a compliance management tool.
Automating and operationalize compliance isn’t going to be a free lunch. There are costs involved in doing so. Apart from paying for a monthly or annual subscription for the software, there will also be set-up costs involved, including:
There are compliance software vendors available today. Take the time to study each one and find the solution that best fits your industry, contextual needs, and budget. Create a committee to help deliberate or engage a consultant who has digitized compliance management systems in the past.
It’s not enough to just have compliance software tools and leave your staff to understand it on their own. Management should provide as much support as necessary to learn and implement these tools properly. Some of the things that your compliance department or team should learn how to do are to:
When necessary, provide refresher training to existing staff. Include any systems training into your compliance team’s onboarding process so new team members will be familiar with the tools from the onset.
A compliance management system, just like any other software, is prone to malicious cyber attacks. These threats can become a source of major problems when left unaddressed. So ensure that all staff members prioritize cyber security when using a compliance management tool. Here are some important pointers when setting up security for your compliance team.
Being a fully-remote or hybrid team is no longer a fringe circumstance. So if you want to get ahead of the innovation curve, have a remote-first mentality. Anything that can be stored on a cloud-based system should be on cloud access.
There are many advantages to managing remote first compliance, including flexibility, agility, and efficiency. So your team should make it a point to have remote access when they can. But in doing so, ensure that security measures are put in place, as discussed above.
The one thing we must accept in this world is the constancy of change. Everything around us will continue to change. Policies, compliance structures, teams, and technologies change all the time. So it’s essential to have regular audits to assess if our compliance management systems are still helping the company optimize processes or aren’t.
Have a regular review with a team in charge of compliance. This can be a part of an annual planning process if that helps you schedule it. Have a set of criteria to help you make decisions. When it’s time to switch providers or make changes, assign an ad hoc team to spearhead that effort.
There’s a big chance that you already have other systems in place outside of a compliance management tool. So you’ll want to find a solution that will communicate with those. That way, your operations will become more seamless.
One tool that your compliance management system should interact with is enterprise resource planning software or ERP, which will help merge various functions in an organization, including human resources, operations, supply chain management, finance, and many more. You can refer to the lists of top ERP softwares.
Up to 51% of organizations are planning to invest to train and upgrade their compliance systems. That shows that companies are now starting to see the importance of automating or digitizing their compliance management workflows. If you haven’t considered making the shift yet, the time to reconsider is now. Don’t wait until your compliance measures fall behind the trends. It’s time to put in the effort now so you can start reaping the benefits of a tech-based compliance management process as soon as possible.
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