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Does a global organization ever reach the point where its compliance to-do list is empty?? In today’s ever-changing world, the only correct answer is “never.” Regulation, technology, and business environments constantly evolve, adding new and often complicated risks to the mix. Global crises, like the one the world is currently facing following the COVID-19 pandemic, impact the pace of this evolution. For example, according to this Deloitte research, in the eight years that followed the economic crisis of 2008, the number of regulatory changes increased by 500%, causing a 60% surge in the amount of money organizations spend on compliance.
Here are some critical compliance-related challenges that organizations are facing:
When examining companies’ compliance expenses, the second-biggest is incident response, which corresponds with several challenges mentioned above. Incident response is often unexpected, overwhelming, and throws the system off. It’s also important to remember that there are hidden ones in addition to the known costs; for example, according to the 2020 Report To The Nation, around 5% of annual revenue is lost due to internal fraud that might go undetected for years.
The answer to the risks, challenges, and even some of the costs mentioned here can be summed up in two words: continuous compliance.
Continuous compliance is not a process; it’s a state of mind. It is the realization that compliance is an ongoing, never-ending proactive effort meant to increase transparency and predictability. A continuous compliance strategy replaces scheduled audits with a daily, constant strive towards improved control and lower risk.
Though the general notion that continuous compliance can be easily explained, turning it into actionable steps might be more challenging for organizations that do not yet practice this approach. The next four examples will focus on a specific and essential benefit offered by continuous compliance while relating it to real-life situations.
Uncertainty is a compliance professional’s worst enemy, and these days, it’s rearing its ugly head. It may result in undetected violations or false positives, creating some significant risk exposure to the organization. Identifying and remediating risks on time can reduce uncertainty levels and minimize the risk of violations and unexpected costs. The best and perhaps the only way to immediately spot any risk is by performing an ongoing audit, which is the essence of continuous compliance. Think of it as a patient who is connected to a monitor 24/7 instead of attending annual checkups. Any deviation is detected and handled on the spot.
By continually monitoring behaviors across the organization, Datricks can spot anomalistic, uncommon activity, and alert companies in real-time. This removes blind spots and allows the organization to stay updated, react fast, and solve the problem. Perpetual monitoring also identifies redundant activities that lead to wasted resources and unnecessary expenses, thus increasing the company’s operational efficiency.
Organizations find themselves paying twice for the same service or product and, in other cases, investing time and resources trying to rectify the payment. This often comes from poor master data management processes as well as reliance on manual invoice management procedures. Some companies simply hope that vendors will be alert and honest enough to spot and correct the mistake for them.
Dedicated technology can check specifically for duplicate invoices and prevent mistakes before they are processed and paid. Datricks offers continuous monitoring that includes invoice control and alerts of any suspicious invoices, including duplicate ones. By keeping track and recording such actions, Datricks allows auditors to receive the full information related to the invoice, evaluate the risk, and gain valuable insights.
SoD brings the idea of checks and balances into the business world in an attempt to minimize fraud. The purpose of SoD is to make sure that no one within the organization holds multiple conflicting roles or can execute an entire fraudulent process without others involved in some aspect. SoD, in the digitized world, is often translated into account access permissions.
To ensure that SoD rules are properly upheld, it is required for companies to map out the different roles across the organization and detect any conflicts, preferably in real-time. The problem in large organizations is that there are so many roles and processes, leading to many account access permissions, which makes it complicated and challenging to manage and predict every single SoD conflict.
Datricks flags SoD actual violations in real-time and highlights the exact process instance in which the violation happened. This allows compliance teams to identify the conflict in access permissions and mitigate the risk, either by changing the permissions going forward or by continuously monitoring violations and reporting on them in real-time.
Making mistakes is an integral part of the human experience, but this compassionate philosophy doesn’t hold when it comes to compliance. Manual compliance opens up a lot of room for human error. For example, when teams manually pass large amounts of data back and forth during business health checks, sometimes in cumbersome spreadsheets or other manual means of communication.
Continuous compliance creates fully automated processes that eliminate the risk of human error, bias, and the need to obtain, process, and analyze information from every server. This prevents data manipulation, as it facilitates 100% automation of the process.
This accuracy level saves time and money for many participants across the organization and helps employees do a far better and anxiety-free job.
Continuous compliance enhances the organizations’ levels of visibility, accuracy, productivity, and control. It solves problems in real-time and even prevents them from occurring in the first place. Continuous compliance reduces risk by using effective technology where it is needed most; it gives CFOs the superpowers they need to make smart decisions, prioritize tasks, and manage resources more effectively. Each of the above scenarios is reason enough to embrace continuous compliance, and their combination creates an irresistible bundle for companies.
