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Originally posted on Rentsys Recovery Services’ blog.
According to Accenture's 2013 Global Risk Study, regulatory requirements rank as a top-five risk category for financial, government, insurance and other industries. In fact, 30 percent more companies plan to increase their compliance efficiency.
Compliance Challenges Businesses Face
When it comes to compliance, businesses often have difficulty keeping up with the constant changes. There are several aspects to keep up with, so it sometimes gets pushed to the back burner.
The Rising Popularity of Technology
Today businesses have the ability to use technology for most every business function, from communications to supply chain fulfillment. In many cases, technology helps businesses achieve regulatory compliance due to the requirement for disaster recovery plans.
For example, when Hurricane Katrina struck New Orleans, LA, over 1 million paper medical files were destroyed, leaving the hospitals responsible for those records noncompliant. (Federal law requires hospitals to retain five years of patient records.) But by the time Hurricane Sandy struck, hospitals in Manhattan had a disaster recovery protocol in place with electronic files and were prepared for the storm.
The problem is, it's also become more difficult to maintain higher volumes of data and stay consistent. In fact, 99 percent of companies believe that managing compliance risk is a top priority, but only 29 percent of businesses are currently capable of managing risk activities.
Insufficient Communication With Regulators
Businesses are struggling with efficiently responding to regulatory changes, and 57 percent say a communication breakdown with the government is to blame. To help deal with this challenge, some businesses, particularly in the banking industry, are creating positions for dedicated regulatory program managers. But this creates another problem. Now 58 percent of companies report a shortage in regulatory program manager talent.
Disjointed Corporate Response to Regulations
It's essential for all business functions to mesh, especially when it comes to compliance. If only half of the departments are considered compliant, the business is still noncompliant. Yet 48 percent of companies think senior management lacks integrated responses to regulatory reform. Similarly, 40 percent of businesses think that the long-term strategies don't align with regulatory reform.
How You Can Respond to Compliance Concerns
Accenture reports that "many industries are being forced to rethink their business models, processes, reporting and data structures to better enable effective regulatory solutions." If your business is struggling to manage large amounts of data, stay up-to-date on regulations, retain in-house risk management experts or sync your business's goals with regulations, it might be time to look outside your walls for help.
Using a professional planning consultant who's familiar with your industry can help you manage growing amounts of data, monitor regulatory changes and help your company develop a cohesive risk management strategy.
If you're one of the fortunate businesses who has a regulatory program manager on your team, continuity planning software can help facilitate the process of creating the risk management plan by clearly outlining objectives and making it easy for department representatives to provide key information about their specific business functions.
Do you have any other tips for improving compliance efficiency?