What is Regulatory Compliance?

Regulations have long existed to govern how organizations collect and use information online, as well as what cybersecurity precautions organizations should take while conducting business online. As digital transformation of business processes has accelerated in the last few years, however, that means ever more organizations — large and small — must comply with all those regulations.

Regulatory Compliance: A Definition

Regulatory compliance is an organization’s adherence to the laws, regulations, or guidelines set in place by a governing body that might apply to that organization. Some regulatory compliance obligations pertain only to a few firms in a specific industry, or only to large firms but not small ones. Other regulatory compliance obligations apply to much broader groups.

Contrary to popular belief, the consequences of failing to meet your compliance obligations aren’t solely restricted to regulatory fines. Compliance failures can leave a company subject to civil litigation from third parties, bar a company from bidding on lucrative contracts, or ruin the company’s reputation with would-be customers.

Why Is Regulatory Compliance Important?

Technology has transformed the way that companies conduct business. As a result, governments on a global scale are implementing regulations to protect their constituents from harm, especially as data privacy, data protection, and financial fraud become hot topics for the average citizen.

As organizations continue to grow, it’s critical that they adhere to whatever regulatory compliance directives pertain to their specific industry.

The importance of regulatory compliance largely stems from the understanding that companies need to maintain a minimum standard for the way they conduct their operations, such as how to handle customer and employee data or how to conduct retail transactions.

What Are the Challenges With Regulatory Compliance?

Adhering to regulations isn’t as simple as one might assume. After all, companies need to invest money and resources to implement compliance programs, in the form of internal company policies and training programs to assure that employees will follow the protocols demanded by the regulations.

Additional challenges with regulatory compliance:

• Keeping pace with technology advancements, so companies don’t fall behind on emerging risks or potential regulatory changes.
• Encouraging internal staff to take the training required and play their part in assuring that the compliance programs are followed.
• Hiring for specific roles, such as a chief compliance officer, whose primary responsibility is to assure that the business follows all mandated regulations;
• Implementing compliance software to attain, and maintain, compliance.

Regulatory Compliance by Industry

The compliance requirements that businesses must obey can vary greatly depending on the industry since the data each industry uses, and even the operational requirements, are different.

Here are of the most well-known regulations within major industries:

What Is the Relationship Between Regulatory Compliance and GRC?

Governance, risk, and compliance (GRC), is defined as an organization’s ability to achieve its goals, address uncertainty, and maintain integrity. GRC includes three specific pillars: corporate governance, enterprise risk management, and compliance.

The primary objective of relying on GRC is to help organizations devise a strategic approach to improve decision-making by senior leadership, demonstrate effective risk management practices, and meet compliance requirements.

In the context of regulatory compliance, GRC refers to the controls and measures set in place to assure that the organization adheres to regulations dictated by relevant industry requirements or governing agencies.

How Can Audits Assure Regulatory Compliance?

Businesses may engage compliance officers to oversee compliance management, and part of this process may even include leveraging a compliance management system (CMS), which can include risk assessments, policies & procedures, implementing corrective action, and more.

In many cases, a compliance audit is required by law to gain certification that the business is compliant with a regulation. (This is the case with the PCI DSS framework, for example.) Therefore, compliance audits are instrumental to assure that organizations are adhering to the regulations required and to establish a baseline in the current-state of compliance versus the future desired state.

ZenGRC from Reciprocity is a GRC platform that can help your organization to implement, manage, and monitor your regulatory compliance efforts.

With ZenGRC, a team of GRC experts are always at your service. ZenGRC’s single source of truth audit-trail document repository lets you quickly access the evidence you need to demonstrate regulatory compliance, as required by law when audit time rolls around.

ZenGRC is also fully equipped to help you streamline management for the entire lifecycle of all your relevant compliance frameworks including PCI, ISO, HIPAA, and more.

Find out if ZenGRC is right for your organization and schedule a demo today to get started on the path to worry-free regulatory compliance — the Zen way.