Ensuring regulatory compliance can become a full-time job on its own. The difficulties of adhering to industry-specific regulations demand a deep understanding of your industry's ever-changing compliance and judicial requirements.
With regulatory bodies tightening their scrutiny, the burden of compliance has intensified, making it imperative for organizations to stay ahead of the curve.
Our comprehensive guide provides strategic insights and solutions to simplify the complexities of regulatory compliance in the US, empowering decision-makers like yourself to navigate these challenges seamlessly and create a regulatory compliance system that fits your unique needs.
Table of Contents
What is Regulatory Compliance?
Regulatory compliance is the process of adhering to the laws, regulations, policies, procedures, standards, and any other applicable rules issued by the government or compliance authorities.
The regulatory compliance requirements needed for your organization will differ depending on a range of factors:
Your specific industry
Your current location / or locations
Your business size
And more
For example, organizations with a global presence need to adhere to the specific laws and regulations within the countries they operate in.
The reality is that the more successful your business is, the more difficult it is to comply with your industry's regulatory requirements. Most of the time, due to overlapping districts of multiple authorities.
Recent studies show that 74% of companies think that maintaining compliance is a burden.
Regulatory Compliance Requirements in The United States
In the US, legal & regulatory compliance is designed to protect customers, consumers, stakeholders, and businesses alike. The US regulatory compliance requirements are industry-specific, and each of those guidelines has multiple or dedicated bodies to oversee and ensure compliance within businesses in the same industry.
Some regulatory compliance bodies include:
Health Insurance Portability and Accountability Act (HIPAA)
HIPAA compliance establishes the national security standards needed to ensure the protection and confidentiality of protected health information (PHI) such as health, treatment, payment treatment information, or any other information that helps identify an individual when the information is being transferred by an organization covered by HIPAA.
HIPAA compliance is necessary for all organizations that handle protected health information including:
Healthcare Providers
Health Insurance Companies
Healthcare Cleaning Houses
Healthcare Business Associates
Subcontractors
Sarbanes Oxley Act (SOX)
The SOX (Sarbanes Oxley Act) is a federal law designed by Senator Paul Sarbanes and Representative Paul Oxley. Its main goal is to protect stakeholders of publicly traded companies from fraud and other doubtful financial practices.
The SOX regulatory compliance requirements apply to all publicly traded companies that do business in the US including public subsidiaries.
National Institute of Standard of Technology (NIST)
The National Institute of Standards of Technology (NIST) is a non-governmental agency that develops the regulatory compliance requirements for US-based organizations in the science and technology industry.
NIST is also in charge of creating the regulations and guidelines to help federal agencies meet these requirements. These standards are known as FISMA (Federal Information Security Management Act) and FIPS (Federal Information Processing Standards).
While NIST compliance is not mandatory for all organizations, being NIST certified is beneficial for all kinds of business regardless of its size and industry.
Why is Regulatory Compliance Important?
Regulatory compliance is crucial to provide a fair playing field for business owners, stakeholders, and consumers alike. Meeting your compliance and regulatory requirements not only ensures that your business procedures are ethical and fair.
Being transparent about your organization's procedures and compliance strategies puts your brand's perception in a new light. Who does not want to do business with a company that continuously proves they can safeguard and protect their clients' most valuable information?
In addition, adhering to your industry compliance best practices also serves as a deterrent for bad management practices and other dishonest criminal activities. Since all your procedures would be meticulously documented, detecting and eliminating any fraudulent individuals becomes an easy task.
Benefits of Regulatory Compliance
Organizations that prioritize consistent regulatory compliance management can enjoy substantial benefits and outcomes, both in the short term and overall. Some of those benefits include:
Avoiding Legal Issues
Appropriate regulatory compliance management promotes the use of data management and storage best practices.
By following these practices, you are not only creating a streamlined and secure data management system that allows you to easily identify any mismanagements, but also you are actively avoiding any legal consequences derived from other regulations such as the GDPR for not meeting compliance.
Fostering a Healthy Competition
Regulatory compliance requirements are designed to create an even playing field for all businesses regardless of their size or complexity by enabling fair practices that foster innovation and opportunity for all organizations.
Giving regulatory compliance its place within your organization will not only shield you against any legal action, but it will also allow you to actively contribute to creating an equitable environment that fosters innovation, and high-quality products and services.
Increased Workplace Safety
Following your industry's legal and regulatory compliance requirements is a terrific way of building a healthy and productive environment for your employees. In addition, abiding by your industry compliance requirements will allow you to increase your organization's safety and security measures allowing you to create a resilient work environment.
Improving Your Public Perception
Regulatory compliance is beneficial in terms of branding and public perception. Just put yourself in the shoes of your clients and ask yourself, would you like to work with a company that is known for not meeting the latest compliance standards and requirements?
Achieving regulatory compliance will not only force you to stay up to date with the latest security measures, but it will also boost your confidence in your clients and stakeholders because you will be able to demonstrate that your company is compromised with your client's safety and well-being.
Furthermore, regulatory compliance can be leveraged to effectively increase your public image through marketing campaigns and public announcements. So, don’t forget to promote your accomplishments in your next campaign!
Reducing Unnecessary Risks
Adhering to legal and regulatory compliance requirements allows you to eliminate risks while maintaining customer trust. For instance, effectively safeguarding customer data against breaches or theft can set a business apart from its competitors.
Additionally, business partners value working with a safe and reliable organization, leading to increased synergies and long-lasting partnerships.
The Drawbacks of Non-Compliance
Not complying with your industry regulations can have a catastrophic impact on your business efficiency and public perception. Some of the consequences of failing to comply with your industry standards include:
Business Disruption
Breaking the rules can result in costly downtime and decreased productivity. A simple violation could leave your business out of operation until the correspondent authority finishes investigating your unique case.
Non-compliance will not only result in expensive lawsuits and costly litigation. Failing to meet your industry compliance requirements can also make your business non-suitable to work with government entities and any related projects.
Damaged Reputation
Businesses that fail to comply face the consequences of a tarnished reputation. Negative media attention takes a toll on how consumers, clients, business partners, and the public perceive them.
Recent studies demonstrate that a bad reputation doesn’t just lose you prospective customers. 87% of consumers report that they will even reverse a purchase decision after reading negative news or reviews about a business online.
Lost Opportunities and Revenue
Losing customer confidence can have a long-lasting impact on revenues for many years to come. In addition, facing incidents regularly may tie your organization to stricter compliance regulations, leading to rising compliance costs and difficult compliance management practices.
Penalties
Failure to comply with regulations can result in penalties, usually in the form of monetary fines. These penalties can be a one-time payment or a recurrent charge depending on the specific rules and regulations you break.
The consequences for non-compliance can be business-threatening, often resulting in millions of dollars in fines. In extreme cases, organizations that knowingly violate the law can subject their leaders and management to personal liability, and even imprisonment.
How Can You Ensure Regulatory Compliance?
There are multiple ways to ensure your organization meets legal and regulatory compliance. For instance, some organizations have a designated compliance specialist who oversees and maintains an organization's compliance requirements.
Other organizations prefer to delegate their compliance responsibilities to existing personnel within their organization with the support of compliance management solutions to ensure best practices are met.
The path you choose will depend on your business size, needs, budget, and compliance requirements.
The following tips will allow you to create a regulatory compliance system that allows you to stay on top of your organization's compliance requirements regardless of how you choose to manage your business compliance needs.
Leverage Automation
Automating your compliance activities can save you time, money, and resources. Implementing compliance solutions will reduce the complexity and resources needed to achieve compliance consistently.
Stay Updated
The law & regulatory compliance requirements change frequently. Staying on top of the latest updates is crucial to ensure your compliance requirements are met.
Create and Document Compliance Policies
Creating and documenting compliance policies will allow you to spread out a compliance culture throughout your business while keeping your team informed and aware of any unacceptable practices.
Train Your Employees Regularly
Training your employees is crucial to staying up to date with the latest compliance requirements and regulations. Conduct regular training, sessions, and workshops, and review documentation regularly to further enhance the compliance culture within your business.
According to recent studies, 70% of compliance errors are attributed to human error.
Review and Update Your Compliance Policies Regularly
Reviewing your regulatory compliance policies regularly will allow you to identify and correct any weaknesses in your processes to create an efficient and streamlined regulatory compliance management strategy.
Why Regulatory Compliance Management Matters
Regulatory compliance management refers to the systematic approach that organizations adopt to ensure adherence to regulations. This involves establishing standardized processes, implementing suitable technology, and enhancing control visibility while eliminating inefficiencies.
Regulatory compliance management is a full-time job on its own and this unique task is carried out by compliance management specialists.
A qualified compliance management specialist, like BTI, will make the process of achieving your regulatory compliance requirements easy and comprehensive. With our compliance monitoring services, you will not only save time, money, and resources.
With BTI, you have a compliance management specialist designing and monitoring a customized regulatory compliance system to ensure that:
Your regulatory compliance policies are up to date.
Your business meets and excels in the necessary policies, procedures, and solutions to achieve compliance.
Your employees are trained and educated on your specific compliance requirements and best practices.
Eliminate any additional investments related to regulatory compliance, and more.
Let BTI take care of all your regulatory compliance needs so you can concentrate on boosting your profits. Contact us today and schedule a free business assessment!