The Nasdaq 2020 Global Compliance Survey report shows that the importance of compliance has never been higher, with 74% of organizations considering compliance standards critical.
However, even though most companies understand the importance of compliance, many struggle to manage compliance risks.
This issue is even more complicated in XaaS scenarios. Companies are accountable for handling personal data in the cloud or in-house. IT companies risk facing compliance issues if they lack a comprehensive understanding of their XaaS solutions.
While XaaS providers usually offer better privacy protections and overall security than companies can execute themselves, a Deloitte survey shows that more than half (55%) of surveyed companies state that ensuring data security in XaaS initiatives is either entirely or mainly their organization’s responsibility.
So, how can companies successfully manage compliance risks on their own?
Managing Compliance Risks: Best Practices
To properly manage compliance risks within your company, it’s essential to take a systematic approach when identifying and mitigating compliance risks your business faces on an ongoing basis. Here are six best practices to help you achieve that.
1Starting with Risk Assessment
It’s impossible to successfully manage compliance risks without understanding them. Without a comprehensive risk assessment, all your compliance efforts might go to waste if they don’t address the correct issues.
Cloud adoption is an excellent opportunity to incorporate an adequate compliance strategy into your infrastructure if your legacy system doesn’t have one. Therefore, it’s essential to perform a risk assessment before adopting cloud computing and XaaS solutions to create a system that focuses on prevention instead of correcting previous mistakes.
2Third-Party Risks and Due Diligence
It is essential to perform some due diligence on all third parties associated with your company. This is because some of the most significant compliance risks involve interacting with third parties.
A comprehensive due diligence process should be integral to your compliance risk management strategy.
The higher the number of third parties you deal with, the more critical the due diligence process is as streamlined and automated as possible. Due diligence software can help you quickly categorize third parties and automate the screening process, saving you valuable time.
3Keeping up with the Latest Enforcement Policies
Understanding the requirements of all applicable laws and regulations is essential to compliance risk assessment.
However, it doesn’t end with just understanding the letter of the law. It is also vital to stay up-to-date with the latest guidance and enforcement policies.
While major regulations are no longer causing issues as companies have had time to adapt, switching to remote work during the pandemic also came with new risks. Hence, rules are likely to tighten, and companies should be prepared to adapt.
4Using Automation to Save Time and Eliminate Frustrations
It is apparent by now that managing compliance risks is a complex and time-consuming task. It involves managing many complicated processes at once and a myriad of stakeholders.
At the same time, many mundane tasks are involved in compliance. For example, manually chasing employees for signatures or attempting to retrieve records from multiple locations and non-centralized storage can be a colossal waste of time and resources.
In case you have to handle eDiscovery requests, it’s helpful to have software such as an automated email archiving solution to help you quickly retrieve email records from a safe, centralized repository.
It’s much easier to automate archiving and create a searchable record base than to worry about backups or manual archiving daily.
Automating such processes doesn’t just save time; it leaves more room for critical tasks, such as offering training to the most high-risk employees and revisiting compliance risks.
Using technology also eliminates frustrations and reduces the annoyance factor of manual processes. This will help you drive engagement with your compliance efforts and make sure that your employees are sticking to the policies that have been put in place.
5Building a Culture of Ethics and Compliance
When managing compliance risks, it is easy to get lost in addressing complex issues and trying to meet the latest enforcement policies.
Compliance policy can quickly turn into a tick-box exercise, but instead of aiming to meet expectations in the short term, you should focus on creating a more sustainable environment and building a culture of ethics and compliance within your company which will help you meet these requirements in the long run.
When building a culture of ethics and compliance, it’s crucial to set the right tone from the top of your organization. The role of senior leadership is to communicate the level of ethical conduct expected from employees to the middle management and the rest of the organization.
Moreover, the organization’s top executives should serve as an example of good practice and lead by example instead of focusing solely on words.
Compliance training should be easily accessible to all your employees and delivered engagingly to ensure the message sticks. Failing to do so will make your efforts futile and employee training meaningless.
6Continuously Updating Your Compliance Policy
We’ve already highlighted the importance of keeping up with the latest enforcement policies. However, regulations are not the only thing changing and need keeping up with. Your company is also continuously evolving, and so are compliance risks that come with every internal change.
Treating your compliance policy as a one-off project is a mistake and can lead to compliance issues or even costly security breaches. Instead, evaluate your policies regularly and update them whenever significant internal or external changes occur.
Managing compliance risks involves many moving parts, and it’s challenging to keep up with.
By performing risk assessments, automating as much as possible, keeping your employees educated, creating a culture of ethics and compliance, and regularly revisiting and updating your policies, you’ll be able to make compliance easier and minimize risks and mistakes.
Following these tips will help you mitigate risks in your organization and ensure compliance in the long run.