How Automation Can Help Your Firm Achieve Greater Compliance
Tags: Finance, Automation, Financial, Business, Work

It’s becoming an ever greater challenge for businesses to remain compliant with the constant changes imposed by regulators. As governments around the globe continue to revise and add regulations for businesses, the cost of conforming to these regulations is increasing.

Adhering to new codes is the responsibility of the corporate, legal, and compliance departments. All companies must take a proactive role to meet these standards and protect themselves, their employees, and their clients.

In the past, hiring more people to deal with increased regulation might have seemed the way to go. But nowadays, to efficiently take on compliance management, a company’s best bet is to integrate automation into their workflows. Building and automating a series of rule-based and repetitive tasks replaces the need to hire more people and gives employees more time to focus on creative, strategic, and cognitive work.

In a study recently issued by Forrester Consulting, it was reported that up to 66% of companies will increase their spending on automation software in the next year. This investment will reduce costs, improve employee experience, and provide better service to clients.

Here are some ways in which automation will enable your company to become compliant more efficiently and effectively.

Allowing Your Compliance Team to Work More Efficiently

Although automation software does not replace the necessity of a compliance team, it will give them the tools they need to work more efficiently.

Many companies rely on outsourced legal counsel to help them navigate the various aspects of the regulatory environment. In addition to high costs, lawyers will often provide extensive lists of legal jargon, making it difficult to understand how legislation affects your operations.

Automating your workflows allows your compliance team to easily distribute summations of regulatory issues, specific to your business, to various departments so everyone is kept up to date. Using automation to centralize these kinds of tasks provides complete visibility and ensures your compliance department always has the data they need.

Instead of outsourcing, automation is allowing businesses to integrate compliance monitoring into their own operational processes. Whenever an internal process is executed automatically, the action can be saved into a log where it can be accessed and reviewed at any time. This allows companies greater oversight over their own operations, and compliance issues can be dealt with more easily when they arise.

Compliance departments also get bogged down by having to compile a long list of monthly reports. They can use software so that these reports are automatically received by their CCO and are automatically generated onto a cloud application where they can be accessed. In addition, they can also automate risk assessments, control processes, alerts, and notifications.

Automation Enables Accurate Reporting

Once a set of rules have been established as an automated workflow, they can be performed the same way every time for any process. This is true whether it be for data transfer and migration, internal control monitoring, or notifying of compliance violations.

These kinds of automated tasks eliminate the potential for human error and enable companies to maintain a strong internal control and compliance environment.

One key example is when you need to review patch management processes for meeting the requirements of the Health Insurance Portability and Accountability Act (HIPPA). This usually requires your IT department to create and submit documentation.

But if the IT department happens to misplace a document request amongst a stream of emails, the compliance department needs to follow up. This means having to send reminder emails to the responsible party to stay on top of things. Automation enables a “set and forget” approach to these kinds of tasks which saves time and allows for better control of the process.

And while compliance audits do not regularly happen, the fact that an automation process can log all of its activities is an excellent advantage when one does occur. The activity log will show what was processed and how, when exceptions were generated, and how employees intervened to deal with issues.

Fulfilling Legal Obligations

It can be difficult for compliance managers to juggle so many balls at once. From document retention, cybersecurity, human resources, internal operations requirements, and regulatory reporting there is a lot that must be executed.

Any error can lead to a regulatory violation with fines and penalties. While not all instances of noncompliance have the same consequences, every situation will typically result in some sort of penalty which could result in punitive damages to the business.

For example, a HIPPA violation can range from $100 to $50,000, depending on the specific violation. In one such instance, if individually identifiable health insurance is obtained and disclosed, a fine of $50,000 and a 1-year prison term may be enforced. Automating your compliance process can reduce financial and personal risks.

Building Better Business Operations and Better Employee Experience

Having to fulfill these types of legal obligations is a heavy burden, but they help provide internal safeguards and encourage better business practices. For example, laws that protect and promote data security help preserve confidentiality, guard against financial loss and prevent malware intrusion.

By meeting these legal requirements, companies help maintain a protected and professional business atmosphere for clients and employees. When a company conveys that it has an effective attitude and approach to compliance, clients and employees can feel confident that the company they’re interacting with takes their security and privacy seriously.

It can be a struggle for any company to fully understand their legal obligations, especially when they’re unorganized and using out-of-date processes that leave them unprepared. By implementing automated processes, companies can conquer these challenges and improve their compliance environment.