Businesses are rife with reports. To minimise risk and adhere to regulations, compliance reporting is a necessary process that is likely to be a recurring task. It is used to assess how well a company is obeying laws and complying to regulations. With advances in technology, regulatory compliance management software is helping businesses compile and share these reports as efficiently as possible.
Let’s get into everything you need to know about compliance reporting and how software automation tools can be of aid.
In-depth compliance reports provide organisations with a way to understand how well they are falling in line with industry standards, rules, regulations and laws set by the government and/or regulatory bodies.
The process of compliance reporting includes compiling information on company data and how it is collected, controlled, stored and shared, both internally and externally. Internal stakeholders, management teams, executives and third-party auditors may elicit the information gleaned from compliance reporting to ensure that the company is following the law.
With the ever increasing amounts of data being collected, as well as changing rules and regulations, many businesses are leveraging the power of data automation tools to keep their customers’ data safe. Not only do these tools help to protect data and inherently comply with laws, but they can also be used to automate compliance reporting so that your team can allocate their time to high-level tasks.
Compliance reports are typically one of the most important duties of a Chief Compliance Officer (CCO). This is the case in large organisations that have someone in that position. The CCO will establish standards and policies by which the rest of the organisation must adhere to in order to identify, prevent and rectify any practices that are noncompliant.
In smaller organisations, without a Chief Compliance Officer, the task of compliance reporting may fall to an IT professional, someone from the legal department or another qualified employee. Without a CCO, it’s important to choose a manager who has knowledge of your industry’s specific regulations and has a broad understanding of the organisation’s current processes and procedures.
For any size business, the implementation of an automated solution for compliance reporting will help to streamline data collection, minimise risk, automate remediation plans and generate the necessary data without hassle. It can also serve as a way to easily outline business processes, without having to worry about key person dependencies. This way, if a process is failing or noncompliant to a regulation, then it’s easy to see what needs to be changed.
Like most reports that stem from an organisation’s internal processes, there may be a variety of audiences who read a compliance report. Those reading compliance reports could be internal or external to the organisation.
Reports that are designed for an external audience are generally part of a compliance audit that comes as part of a request from a regulatory agency, or auditor. When reviewed, an outward-facing compliance report can face serious consequences, should there be evidence of noncompliance. This could be in the form of sanctions, fines, or more serious penalties. If the compliance reports proves that the organisation is working in good faith, but still suffering from noncompliance, then the regulatory body may aid the organisation in its remediation efforts.
Compliance reports are also used internally and may be read by stakeholders, board members or other department heads. These reports tend to be more focused and targeted with reference to specific regulations. Overall, a compliance report can become a learning tool for the entire organisation for how to adhere to standards and regulations, thereby showcasing how to conduct business processes in the optimal manner.
Every business leader wants to have a clear and accurate picture of how their organisation is performing. This is especially true when it comes to reviewing processes that are overseen by regulatory bodies. Regulatory compliance reporting provides benefits to internal and external stakeholders, from customers to the C-suite.
Consider these two primary benefits:
Regulatory compliance reporting takes time because of the amounts of data necessary for its completion. As such, entity management technology, like software automation solutions, can play a huge role in easing the complexity and timeliness of producing compliance reports.
For starters, with management technology, all data exists in a single, centralised location that is verifiable and reliable. Gathering data from a single source will not only maintain its integrity, but it also saves a lot of time. Moreover, with built-in data analytics, it’s possible to transform information into insights. These insights can inform business decisions and help to highlight the points at which a process is failing to meet regulatory standards.
Going even deeper, entity management technology can process data and also transform it into easily understandable information by way of data visualisation. Compliance teams can take advantage of data visualisation and customise reports, color code data and provide charts to the organisation for easy review.
Changing regulations affect business strategy. It’s paramount that organisations, especially those that collect private data, regularly administer compliance reports to ensure their processes are in line with the law. Failure to do so can result in a variety of negative consequences, from the loss of customers and a damaged reputation to legal ramifications and monetary fines.
Within some industries, such as banking, compliance reporting isn’t a matter of choice - it’s required by law. But, even when a compliance report isn’t necessarily dictated by the law for your business to produce, it’s a beneficial practice for several reasons. Customers may look for your compliance reporting before choosing to share their data, or make a purchase with your business. Furthermore, this report can provide insight into where business practices are failing, or where there’s room for process improvement to prevent further detrimental outcomes from occurring.
Since there are different types of compliance reports, the inherent information depends on its usage and audience. When driven forward by a regulatory requirement, there’s a clear structure. When conducted for a business’ personal preference, then the content and organisation of the report can vary.
Here’s a look at some examples of compliance reports:
It’s common for any industry to have some sort of designated compliance report, or even several. With the rise of data and internet technology, it becomes increasingly important for businesses to follow regulations for customers’ safety and protection.
Despite the array of compliance reports that exist, there are four common denominators for what’s included in compliance reports. They should provide the following information:
The main goal of any report is so that it can be of use. To define an effective compliance report, it must be actionable and insightful to the reader. Depending on who is responsible for its creation, the audience may not be aware of the technical terms used. As such, a compliance report should be written for its audience, which means that it includes:
Effective compliance reports have another key feature - they are created in a timely manner. While it’s important for the reader to obtain the report quickly, it’s even more important that the creation is also completed fast. One of the easiest ways to ensure this is possible is to leverage automation software. By doing so, data collection and analysis can be done without human intervention, saving a lot of time, and in effect, money.
For some businesses, compliance reports are mandated. For others, they may not be required by law, but there are still laws that govern the business’ practices. As such, it’s important to produce regular and consistent compliance reports to ensure that your organisation is operating in accordance to laws.
With the aid of automation software and regulatory compliance software, regulatory compliance reporting is made to be seamless, accurate and timely.