Compliance and Rapid Digital Transformation
Nearly every organization on the planet has faced a push to adopt additional types of digital transformation this past year due to the pandemic. Staff needs to work from home, and new ways of interacting with clients must be found to replace in-person consultations.
Supply chains are being disrupted in a myriad of ways and new types of products are being fast-tracked through manufacturing and into the markets: face masks, hospital equipment like ventilators, and of course vaccines. In the rush to adopt new forms of technology, compliance requirements may be overlooked.
Emerging rapid technology adoption is supported by the report “Fintech, Regtech and the Role of Compliance Report 2021.” This industry report by Thomson Reuters Regulatory Intelligence (TRRI) surveyed over 400 compliance and risk practitioners and found that over 70 percent indicated that the pandemic has caused their organizations to increase the rate of digital transformation.
The many benefits of digital technology include process improvement, streamlined efficiency, and cost savings. If an employee can address a customer service issue immediately using a chatbot interaction, that is one less customer waiting on hold for a representative. Giving customers the option to interact with knowledgeable chatbots saves staff time for more complicated issues and saves the customer time spent waiting on hold.
Modernization of software by moving applications into the cloud can optimize costs while improving operational efficiency, responsiveness, and agility. This article on cio.com details how patterns in modernizing IT can achieve benefits in optimizing costs, improving security and application functionality, improving operation efficiency, business responsiveness, and agility while reducing the risk of business disruption.
The pandemic has shown that digitally mature organizations can move more quickly to innovate and optimize business processes. As this blog post from software company Michaels, Ross & Cole. Ltd (MRC) summarizes so well, the benefits of digital transformation include improvements in efficiency, decision making, agility, and customer satisfaction – all of which combine to improve the bottom line: profitability.
But the benefits of rapid digital transformation come with risks. Perhaps the most familiar is security. If you increase your digital footprint, surely you are increasing the target area for hackers. This article from TechRepublic.com covers the security risks of “non-human workers” such as bots and IoT devices.
In general, when considering new software and data management systems, there are risks that are on everybody’s list, including security and software reliability. But compliance is often overlooked – whether considerations of compliance are left to the last moment or left out of the process entirely, organizations may be overlooking a huge risk.
According to a study by the global law firm Baker-McKenzie, a 41percent of 1500 compliance contacts indicated that their organization has undergone some sort of investigation by regulators in relation to the implementation or onboarding of new technology.
Compliance technology can assist with implementing financial and compliance controls in all aspects of business, as well as monitoring employee conduct and complying with government regulations nationally and internationally. When approaching risk during technology selection, implementation, and user onboarding, compliance experts can assist to minimize risk.
The Baker-McKenzie study further reported that 34 percent of respondents indicated their organization decided on technology with attention to compliance risk. Additionally, 47 percent reported that the compliance professionals were not consulted as a matter of course when decisions on new technology were being made. A similar finding was reported in the TRRI survey, which reported almost 25% of respondents reporting that risk and compliance expert opinions were under-represented in technology decisions.
Legal and compliance professionals are key contributors in the two-stage process of 1. Identifying issues and 2. Suggesting solutions, in the path to adoption of a successful digital transformation. This article on Mondaq.com discusses the benefits of Including members of the legal and compliance staff early in the process of selecting technology to assist in digital transformation.
Ensuring compliance professionals are well-trained and up-to-date and including these professionals in technology decisions early in the decision process are key elements in the success of accelerating the adoption of digital transformation. Further, taking ownership of all risks at the enterprise level and including all stakeholders equally and early in the process is key to effectively reducing the risks inherent in rapid technology adoption.
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