Compliance standards differ by industry and nation. However, regulatory compliance is fundamental for every industry and enterprise in several countries with a vibrant commercial and economic landscape. On the other hand, regulatory compliance is exceptionally critical in businesses with strict compliance scrutiny, such as healthcare and finance, and areas where customer privacy, data protection, and cybersecurity are crucial to company sustainability and legally compliant processes.

Moreover, non-compliance puts businesses at risk of data theft, disciplinary proceedings, and data breaches, resulting in lost customers, license invalidation, damaged reputations, lost customers, and financial fines and losses. These effects have recently been felt by a wide range of organizations, from oil and gas corporations (BP) and manufacturing facilities (Republic Steel) to telecommunications companies (WorldCom), banks (JP Morgan Chase), and consultancy firms (Arthur Andersen).

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Importance of Regulatory Compliance in Today’s Business

Here are some of the reasons that show the importance of regulatory compliance as a part of today’s business.

Protection from Lawsuits

Compliance with rules and regulations is required in order to avert financial fines and safeguard against litigation – whether filed by the authority or whoever (e.g., the public). For example, in 2019, 142 local governments brought lawsuits against firms for violations of the Americans with Disabilities Act 2011 and 2019. (ADA).

Increased Profitability

Regulatory compliance and the audit reports that prove compliance enable businesses to advertise themselves more effectively. Clients can trust their providers and show continuing SOX compliance using SOC 1, SOC 2, and SOC 3 reports. Without such depictions, the company risks losing consumers and hence losing money.

Business Continuity and Competitiveness

Regulatory compliance gives a plethora of guideposts that teach firms what they need to flourish in their sector. Compliance regulations have also emerged to assist market homogeneity and enable businesses to compete equally, ethically, and honestly. Companies that accomplish regulatory compliance may have a competitive advantage in their sector.

Cybercrime Protection

Higher-risk businesses, such as healthcare and finance, appreciate the value of the data they gather and recognize that they are attractive targets for bad actors.

On the other hand, other industries may believe that they are less likely to be targeted. This erroneous notion frequently results in a lack of regulatory compliance focus and decreased security, increasing the possibility of cyberattacks and data breaches.

Data breaches reduce client retention, which can have disastrous financial consequences for the organization, possibly leading to bankruptcy and closure. Regulatory compliance increases information security by compelling firms to follow laws that protect their resources from malicious attackers and serves as one of several protections to assure data protection.

Financial Health

Every compliance officer will inform you that the first advantage of regulatory compliance is financial security.

Non-compliance with regulatory requirements can result in severe fines for the offending entity. Moreover, this occurred to JP Morgan Chase, Wells Fargo, and Goldman Sachs in 2020, when they were fined $7.50 billion out of $11.39 billion levied on all US banks.

Keep a Good Reputation

Companies that follow the rules and laws provide consumers with a sense of security. People place their allegiance, money, and data in such corporations in exchange.

Predict360 Regulatory Compliance Management Platform

The Predict360 Regulatory Compliance Management Software combines next-generation regulatory change management technology, real-time regulatory information, and critical regulatory data repositories to assist in the transformation and optimization of your organization’s regulatory compliance framework. The suite’s tools, plugins, and repositories can be utilized independently for regulatory compliance or integrated into the Predict360 Risk and Compliance Intelligence package.

Interested to know more about the Predict360 regulatory compliance management suite? Contact us for a complimentary demo of Predict360, our American Bankers Association (ABA) endorsed risk and compliance management platform.