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Reducing the cost and complexity of compliance

One of the biggest frustrations we hear from clients is the ongoing challenges they face keeping up with the never ending and continuously changing regulatory requirements. This is particularly true of the financial services sector but we’ve found it to be true of all businesses regardless of industry and size.

There are plenty of reasons to be frustrated with the ongoing effort required to keep the business compliant. There is the obvious cost and effort required. A study published by PWC suggests the average cost of compliance to NZ businesses is $1.2 million per annum. It is also an endless and thankless task. Having made the latest changes and updates required only to be faced with another set of regulatory changes, and then another.

But arguably the biggest frustration our clients express is the impact compliance has on their ability to invest in productivity and innovation initiatives or to even upgrade to modern work practices or replace legacy systems. With limited budgets and available resources there is always a trade-off and keeping the organisation compliant will always be the top priority.

This is a challenge with no end in sight. The regulatory environment is and will constantly change. New regulations are being introduced all the time, and existing regulations are being updated and clarified. As we operate in an increasingly complex and interconnected global economy, businesses will be subject to a greater frequency of change of a wider range of regulations. As the complexity and frequency increases so does the cost and the barrier to delivering the changes the business desperately needs.

The good news is that there is a solution to the problem. In fact, there are a number of things that businesses can do to reduce the complexity and cost of compliance, including:

  • Investing in technology that can help with compliance.
  • Outsourcing compliance tasks to a third-party.
  • Working with other businesses to share resources and expertise.

Automating governance and compliance

Automation is key to effectively managing your governance and compliance obligations. By automating key tasks, such as risk assessment, control testing, and reporting, businesses can free up resources to focus on more strategic and value-adding activities. This can help businesses to improve their compliance posture, reduce risk, and save money.

Automation can help improve governance and compliance programmes in a number of ways:

  • Improve efficiency: Automation can help businesses to improve efficiency by reducing the amount of time and resources that are needed to manage governance and compliance.
  • Improve accuracy: Automation can help businesses to improve accuracy by reducing the risk of human error.
  • Improve visibility: Automation can help businesses to improve visibility into their governance and compliance posture by providing real-time data and insights.

We are seeing automation technology and solutions being used to help businesses manage their governance and compliance obligations in a number of different ways:

  • In the financial services sector automation is being used to monitor compliance with anti-money laundering regulations. Software automatically scans all transactions for potential red flags to help identify and address potential compliance issues.
  • Healthcare companies are using automation to manage patient data. The software solution automatically encrypts all patient data and stores it in a secure cloud environment.
  • Manufacturers are automating elements of supply chain management. Solutions are deployed to automatically track the movement of goods and materials through the supply chain thereby improving the efficiency and environmental impact to support ESG reporting.

We are also seeing automation used in:

  • Risk assessment: Risk assessment is a critical part of any governance and compliance programme. By automating risk assessment, businesses can ensure that they are regularly identifying and assessing risks, and that they are taking appropriate steps to mitigate those risks.
  • Control testing: Control testing is another important part of any governance and compliance programme. By automating control testing, businesses can ensure that their controls are effective and that they are meeting the requirements of applicable regulations.
  • Reporting: By automating reporting, businesses can ensure that they are producing accurate and timely reports, and that they are meeting the reporting requirements of applicable regulations.

These are just a few examples of how businesses are using automation to manage their governance and compliance obligations. As automation technology continues to evolve, we can expect to see even more innovative ways to use automation to free up resources so they can focus on delivering the critical improvements, productivity gains and innovations. This has the flow on effect of improving employee satisfaction and helps attract and retain talent.

If you are interested in learning more about how automation can help your business manage its governance and compliance obligations, please contact us.

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