5 Major Regulatory Compliance Challenges for Business as 2021 Ends

Many financial organizations are focusing on improving their regulatory compliance practices. They are looking at the compliance challenges being faced by organizations across the industry and trying to find the best solutions possible. The five biggest challenges being faced by risk and compliance teams across the country include:

• Compliance Training
• Unaligned Objectives
• Budget Approvals
• Compliance Buy-In
• Covid Recovery

Compliance Training

Recent regulatory changes have highlighted the lack of enterprise-wide regulatory compliance knowledge. Regulatory compliance can only be achieved if the entire organization understands the regulatory compliance requirements and incorporates them into their workflow. Businesses have now realized that as important as it is to improve their monitoring ability to detect compliance issues, the other side of the equation is just as important. There also needs to be a focus on decreasing the number of compliance issues, which can only be achieved through better compliance training throughout the enterprise.

Many businesses are now looking for compliance management software that can also provide learning and training management services. Using the same platform to train people and manage compliance has another significant benefit; all the stakeholders get familiar with the compliance management platform of the organization.

Unaligned Objectives

Regulatory compliance can be achieved if the entire organization commits to it. Each business unit within the organization has its own objectives that line up with the organization’s corporate goals. Compliance can feel like an obstacle to other departments, because while compliance is a requirement for each department, it is not an objective or target for departments other than the risk and compliance department. Successful and sustainable compliance frameworks require complete buy-in from the rest of the organization.

The problem of unaligned objectives can be ameliorated by making it easier for other departments to understand regulatory compliance requirements. When the entire organization uses the same platform for compliance reporting, it is easy for everyone to understand the compliance requirements. When the manager of another department is assigned a task, said manager can look at the project the task falls within on the platform and see how everything connects. Providing a platform also reduces the time and effort required by other departments, increasing their chances of ensuring compliance.

Regulatory compliance challenges can only be overcome if the entire organization understands the requirements and incorporates them into their workflow. Click To Tweet

Budget Approvals

Compliance and risk management departments across the country understand how important it is to have the right regulatory compliance technology in place. The problem is that they often struggle to highlight this importance to other stakeholders within the organization. Periods of instability are not ideal for making investments, which may make it harder for risk and compliance teams to get budget approvals for technology implementations.

Many modern regulatory compliance software provide dashboards and real-time reports that are very useful for the board of directors. Highlighting such features can help risk and compliance teams get budget approvals for the technology they want to implement.

Compliance Buy-In

The way that regulatory compliance budgets are handled is also causing problems, and businesses may want to improve the way they spread the cost of regulatory compliance across the organization. It is unfair to look at regulatory compliance costs separately from the budgets of all other departments; each department within the organization needs to be compliant with regulations. It may be a better practice to share the budget for regulatory compliance and regulatory change management among the different departments.

Covid Recovery

The pandemic resulted in significant disruptions across every business line and process for financial organizations. There was a disruption in workflow due to lockdowns. The increasing financial uncertainties and business closures resulted in funding lines and credit lines both being disrupted. There were also a lot of regulatory changes made by the government to make the situation easier for businesses by reducing the regulatory burden on them. The upheaval across the world is finally ending, and things are becoming calm again. This will mean that organizations will have to shift gears and focus on stability again – something they have not done in almost two years.

These five challenges constitute the biggest problems being discussed and focused on throughout the financial industry. Major regulatory updates are expected to occur over the next few years because of the global focus on ESG. The focus on ESG will result in many regulatory changes, and financial organizations want to ensure that they have an agile regulatory compliance framework that can quickly adapt to the new regulatory environment.

Interested in seeing how your organization can improve the way it handles regulatory compliance? Get in touch with our experts for a demonstration.