Guide to Purchasing Compliance Management Tools
While traditionally associated with multinational corporations and financial institutions, compliance obligations are now ubiquitous, extending even to small retailers. Compliance is not just a regulatory requirement; it is a strategic imperative. In this blog post, we cover the what, why, and how of compliance management tools, including a step-by-step guide to rolling out a compliance management software.
What Is A Compliance Management Tool?
A compliance management tool is any software, program, or technology designed to continually track and monitor business activities, ensuring alignment with applicable laws and regulations. These tools are intended to automate all manual compliance processes and procedures, reducing the risk of human error while deciphering whether actions carried out by the organization or its employees meet the compliance standards relevant to its industry. Multiple compliance tools can be deployed in tandem to ensure an ironclad compliance management system that lets no anomaly slip by unnoticed.
Examples of regulations that a compliance tool helps to enforce include:
- The Sarbanes-Oxley Act of 2002, which regulates record keeping and reporting for financial institutions; sections pertain to conflicts of interest, corporate responsibility, and whistleblowing;
- Individual Accountability Regimes, such as the Senior Manager & Certification Regime (SMCR), the Individual Accountability Framework (IAF), and Senior Executive Accountability Regime (SEAR);
- International Organization for Standardization (ISO)
Compliance management tools can also help companies of any size, in any industry comply with anti-discrimination policies, protect whistleblowers, and track HR incidents to identify areas for improvement.
3 Types Of Compliance Tools
The type of compliance management tools a company utilizes depends on its size, industry, technology framework, specific needs, and other differentiating factors.
General-purpose compliance tools
These tools are designed to be deployed in any industry to eradicate all vulnerabilities, monitor for ethical corporate governance, or prevent technical issues. Examples include IT auditing and data classification solutions.
Specific-purpose compliance tools
Many compliance tools are created to address the needs of specific sectors such as healthcare, manufacturing, or finance. These tools cater to unique requirements or processes, such as monitoring the flow of material non-public information (MNPI) and tracking employee conflicts of interest.
GRC software (governance, risk, and compliance)
GRC software integrates general compliance management tools with features that facilitate risk management, monitor compliance risk, and handle corporate governance tasks. This is the most robust category of compliance software, often capable of integrating with other tools to streamline and enhance compliance workflows.
The Many Benefits Of Compliance Management Tools
Gone are the days — hopefully — of maintaining physical compliance reports or scanning transaction records for red flags. Worst case scenario, an innocent mistake or oversight costs the organization hundreds of thousands of dollars in fines and lost business and inflicts lasting reputational damage.
The advantages of employing compliance management software are substantial. By automating manual compliance tasks, your organization can:
- Avoid legal and financial liabilities: Regulatory non-compliance can lead to significant fines, business disruptions, and civil or criminal litigation.
- Pass compliance audits: Reduce the time and effort compliance teams spend on repetitive tasks, making audits smoother.
- Detect threat patterns: Compliance software is programmed to raise alerts when triggered by anomalies.
- Improve overall efficiency and productivity: Automation streamlines processes, saving time and money and freeing up team members for more high-value tasks.
- Define employee expectations: Clearly defined standards enable employees to stay vigilant and uphold a culture of compliance and accountability. Implementing automated software should establish which tasks are still under the employees’ purview.
- Uncover gaps: Quickly identify weak policies or procedures that are insufficient in ensuring regulatory compliance.
- Shorten response time: Speed up evidence collection and data requests to resolve issues faster.
- Identify regulated data: Protecting customer data is of the utmost importance. Compliance software can screen for sensitive information including special security numbers, health data, and bank account numbers.
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What To Look For In The Best Compliance Tools
The right compliance management tool for your organization depends on a range of factors:
- Is your company public or private?
- What industry sector are you in?
- What types of roles are there in your organization? (Investment advisors, asset managers, programmers, marketers, customer service representatives, etc.)
- Is there a compliance team?
- Which regulations govern your industry?
- Does your organization handle private data?
- Are your customers local, domestic, or international?
- What consequences does noncompliance have for your company?
Once you’ve narrowed down your criteria for a compliance management solution, choose a tool that:
- Will facilitate and support the conduct you expect from employees
- Delivers specific benefits to certain roles (i.e. reduces the compliance team’s workload)
- Provides training and onboarding support for all users
- Is applicable to your business and industry
- Can scale with your organization
- Will provide the most stringent protection against noncompliance risk
Whichever product you choose, ask detailed questions to ensure the software will align with company goals, the workplace culture, and industry requirements.
How To Roll Out Your Compliance Management Software
A successful compliance management system deployment is a multi-pronged endeavour that involves many key players. You and your chosen vendor need to be on the same page to ensure a smooth rollout with minimal disruption to operations. While implementation will look different at every company, follow this general roadmap when rolling out your preferred compliance management.
Assess your tech infrastructure
Make sure the implementation team thoroughly understands your organization’s IT infrastructure. Are there other internal solutions that your compliance management system should integrate with? Your IT team should work with your implementation team to ensure that your solutions are connected to prevent unneeded data silos.
Evaluate risk and liability
Carefully weigh the trade-offs between in-house and vendor solutions. Do your homework. Make sure the vendor meets all security and tech requirements. Ask how data is stored, where it’s hosted, and how it’s protected. Producing security documents on-demand should never be a problem.
Leverage automation
Ideally, your compliance management tool will have robust automation capabilities. Automation is pivotal for cost reduction and consistent performance, especially in larger organizations. It minimizes the risk of human error, enhances program performance monitoring, facilitates prompt report generation, and detects compliance breaches with much more speed and accuracy than manual solutions.
Assess advanced management capabilities
Ensure that your compliance management tool offers advanced task management features. This includes the ability to monitor policies, projects, internal audits, quality management, document management, and corporate risks.
Prioritize data protection and regulatory needs
Ensure that your compliance management tool has robust security features. Acknowledge the various and changing regulatory requirements across industries and choose a tool designed to address specialized regulations and keep data safe. Look for user-friendly templates and regular updates to seamlessly accommodate changes in regulations.
Lead by example
Employees adopt and reflect the attitude of leadership, especially when it pertains to company-wide initiatives. If leadership supports the implementation of a new compliance tool, that confidence trickles down to employees, whose investment in the rollout can grow accordingly.
Establish inclusive ownership and training
Involve all relevant departments in the software vetting process to ensure a holistic understanding of organizational needs. A collaborative approach to onboarding and implementation ensures that stakeholders across the organization contribute to decision-making. Consider how automation will affect the makeup of your compliance team, and define a comprehensive training and onboarding process that matches.
StarCompliance’s strategic approach to rolling out compliance management software accounts for the unique needs of every client. By offering flexibility, robust automation, and a comprehensive understanding of compliance requirements, StarCompliance enables organizations of any size, in any industry to navigate regulatory compliance with confidence and efficiency.
Compliance Platform Buyer’s Checklist
