The role of a compliance officer has never been easy. But today it is more difficult than ever, with additional regulatory burdens springing up all the time, especially in response to increasing data and privacy concerns.
It’s the responsibility of the compliance officer to ensure that the company complies with both external regulations and internal policies, i.e. following the rules.
But toeing the line can make it difficult to think outside the box and be innovative. In fact, it has become a point of contention in some companies. Over a third of business leaders report tension between innovation vs compliance in their organization, according to Bizagi’s recent global research.
Just because you’re adhering to regulation doesn’t mean that you can’t innovate and explore ways to enhance your business. In fact, compliance is a crucial part of both risk management and the digital transformation journey.
“Digital governance should not be left to chance. Ineffective governance creates waste and missed opportunities, making digital transformation riskier and costlier than it needs to be,” write the authors of Leading Digital. Embrace compliance and you’ll be able to enhance other areas of your business.
Innovation and compliance: friends, not foes
Data is the most valuable asset that many businesses possess. It’s the gateway to customer insights and can help power new technology like the Internet of Things and Machine Learning. Data can unlock numerous new possibilities and business processes, but equally, it can be the undoing of a company if it is not properly protected and considered as part of risk management. It’s the responsibility of the compliance officer to keep it in check.
Regulations are designed to protect both consumers and organizations from perils such as cyber-attacks. However, being compliant does not mean the end of innovation. It’s not an ‘and/or’ situation.
“We are experiencing a moment when regulation becomes crucial for innovation to remain sustainable,” reports Forbes.
Regulations should not be seen as an impediment, but as “an opportunity for tech companies to revisit business models and be even more innovative… [We need] appropriate and novel tools to empower users to be put back in control of their personal information. Regulation alone will not be able to protect the user and create a sustainable ecosystem for IoT.”
If companies are looking to embrace new technology, the compliance officer needs to guarantee compliance first.
Make compliance the default
With an increasing number of data regulations to adhere to, including GDPR, organizations are required to build data protection “by design” into their processes. Failure to comply could result in hefty fines and put a serious dent in your reputation and customer trust.
But yet, many companies only consider compliance around their processes retrospectively, which often leaves them on the back foot. If you take a compliance-first approach to processes, such as supply chain management or underwriting insurance policies, it not only ensures adherence, but compliance can become a driver of innovation, not a blocker. Digital platforms allow you to map regulatory requirements. This gives you a highly visual way to check you’re complying.
Once your processes are mapped out, you can then see where it’s possible to implement automation solutions. Not only is this more efficient than manual processes, but it also eliminates the risk of manual errors and people can’t forget to do what’s automated. So you can be sure that what needs to happen, will happen.
Keep up with changing regulation
The right digital platform can also help adjust your processes in response to new rules or the needs of your business. It’s why compliance officers are piloting technology to aid risk management. Just as business leaders report tension between compliance and innovation, the same number (36%) say agility vs compliance is causing tension. But yet again, the two can work together
Speed is important to business. But if new products, channels or processes don’t comply by design, a step forward can soon turn into two steps back. This agile approach is important because regulations change, so you need to be able to respond and adapt.
Bizagi customer Generali mitigated risk by digitizing their operations. This helped them to keep up with changing regulations and make the leap from paper-based systems to automation solutions and efficient workflows. The insurer automated the most complex underwriting processes in its business to increase process control associated with policy documents within the Corporate Risks department.
As a result, Generali had a fully-automated process audit enabling agility in response to changing regulation, with the ability to see real-time brokers’ snapshots of the current business portfolio. They also halved the time spent underwriting and processing the most complex offers and reduced their insurance claims loss ratio by up to 5%.
Innovate with compliance
In the digital age, compliance needs to be built into everything an organization doe, and it’s the compliance officer’s responsibility to make sure it happens. Having a business that is compliant by design can help you react quickly to changes in technology, laws or customer expectations. So, convince your colleagues that compliance is a friend of innovation, not its foe and use digital process automation solutions to achieve both.
This article is based on a larger research report. So if you’d like to learn more about how to digitize your customer engagement strategy, why not download our complimentary report: ‘Make your Breakthrough in Governance & Compliance.’