Moving toward a more adaptable and tech-driven compliance function

A growing global regulatory focus on consumer privacy and data protection, along with new sustainability measurement and reporting laws is furthering the importance of compliance in supporting operational and environmental resilience. Such a shift is reconfirming the vital role of the Chief Compliance Officer, according to Accenture.

The compliance risk report is based on a survey of 860 global compliance executives across 10 sectors – found that even as compliance pressures continue to increase at speed and scale, significant strides have been made toward establishing a working system that is more responsive and agile. For example, 95% of survey respondents say they have built or are building a culture of compliance to share the responsibility across the enterprise. Yet, a substantial number of compliance officers feel a greater emphasis on the function’s stature is needed to truly strengthen compliance and uphold its mandate.

“As compliance functions mature from a reactive role to a proactive partner of the C-suite, the next generation of leaders should focus on building a strong model of collaboration and shared success within the function and beyond,” said Jason Dess, senior managing director, Global CFO and Enterprise Value lead. “In the face of accelerated transformation, rapid regulatory change, unforeseen crises and mounting data complexity, yesterday’s compliance solutions simply won’t cut it.”

Crucial to strengthening compliance is a rethink of the function

This calls for a complete overhaul of the function’s resources, processes and approaches. The report suggests technology and data are key to building a future-ready and risk-proof compliance function, even while technology remains the greatest single challenge and source of disruption for compliance leaders.

“Having compliance at the table is key to guiding companies on how best to mitigate risks, create a compliance culture across the company, and make sound investment decisions to turn the compliance function into a more proactive partner to the business. To evolve with the rapidly shifting landscape, CCOs, CROs and other heads of compliance must engage the C-suite and be open to rethink their business model,” said Samantha Regan, managing director, CFO and Enterprise Value, global regulatory and compliance practice lead at Accenture.

The study identifies several practices compliance leaders can adopt now to move toward a more adaptable and tech-driven compliance function in the future:

• Spearhead C-suite participation across functions to ensure alignment of compliance and business strategies. Establish an enterprise-wide data and information-sharing process to allow compliance leaders to integrate their insights for sharing with senior management and boards of directors. Currently only 19% of respondents say their risk assessment process is integrated across lines of defense and levels of control.
• Build a strong technology and data foundation generating insights at pace for faster and better-informed decision-making. 52% of our study respondents noted the lack of data and information to identify and properly assess business exposure to third-party risks. And 93% of respondents agree that investments in new technologies such as AI and cloud can create compliance cost savings not previously possible.
• Overcome the cost challenge by right-shoring resources. Our study spotlights the “cost shadow” as looming large over the compliance function, as its leaders face the dichotomy of needing to invest in people, processes and tools in the wake of ever-increasing cost pressure. Nine in 10 respondents expect their compliance-related costs to go up by 30% over the next two years, yet 72% say their compliance tech budget has remained flat. New sourcing approaches, like right-shoring resources or outsourcing compliance operations and regulatory change services, can significantly increase efficiencies and decrease costs, freeing up funds to invest in the future.

Source: https://www.helpnetsecurity.com/2022/05/30/compliance-function/