10 Most Common Compliance Risks and How to Avoid Them

Second, organizations should cultivate a culture of compliance, emphasizing its importance at all levels. When compliance is valued company-wide, policies translate into daily habits and behaviors. Advanced technologies, like GRC platforms combined with AI, can be pivotal in helping organizations understand and meet their compliance obligations. In addition, 56% of the respondents believed that emerging tech was one of the biggest threats in addressing financial crime, with data and cybersecurity breaches being the biggest contributing factors. The EU also released the EU AI Act, which could serve as https://officialbet365.com/ the main framework for regulating the use of artificial intelligence in the region. The Act takes a risk-based approach in categorizing AI systems based on their risk levels, from minimal to unacceptable risks.

SafetyCulture is a mobile-first operations platform adopted across industries such as manufacturing, mining, construction, retail, and hospitality. It’s designed to equip leaders and working teams with the knowledge and tools to do their best work—to the safest and highest standard. Coding and documentation changes for evaluation and management (E&M) care encounters were incorporated for outpatient and office settings in 2021 and many other settings this year. Wild said it remains to be seen whether the more constricted timetable is implemented, given ongoing pushback from the industry.

Leverage technology and AI

For instance, in the UK, the FCA can mandate that non-compliant financial promotions be removed from circulation. Depending on the violation, steep SOX penalties are also available in the U.S. Regulatory is multi-faceted and can mean different things, not just for different businesses but for different elements of a single business.

Implementing proactive compliance measures not only helps organizations meet these expectations but also demonstrates a commitment to sustainability. For organizations working with the Department of Defense (DoD), compliance with the Cybersecurity Maturity Model Certification (CMMC) is essential. The CMMC framework ensures that companies handling sensitive government data adhere to strict cybersecurity practices. Failure to meet CMMC requirements can lead to contract loss and reputational harm. Non-compliance with data privacy laws, whether under GDPR or CMMC, puts businesses at risk of losing trust. To mitigate these risks, companies must implement robust data management policies, conduct frequent audits, and train employees on secure data practices.

Compliance with these regulations is not merely a legal requirement but serves as a foundation for building trust with consumers and stakeholders. Businesses that stay ahead of Key Regulatory Issues for Businesses demonstrate their commitment to ethical practices, which can lead to enhanced brand loyalty and market stability. Applying lessons learned from keeping on top of regulatory change, like the EU AI Act, requires compliance teams to work closely with other divisions within their organisation. ‘Compliance teams may not have been expected to get ahead and respond to the regulatory changes in the past. Now they are being asked by their organisations, “How will regulatory changes impact our business going forward?

This has been a hotly-debated topic ever since its inclusion in the Dodd-Frank Act, and we’ll have to wait and see how it plays out, and whether these changes come to pass in 2025. To be sure, financial firms increasingly recognize that ethical leadership is a strategic requirement and are ready to make tough decisions quickly when senior managers fail to meet expectations. One of the largest insurers in Australia announced that their group’s general counsel and company secretary had resigned over behavior that violated the firm’s code of ethics and conduct. The insurer’s board of directors had to rebuild a culture of trust and unity so that employees were respected and valued. In Asia, the focus is on moral leadership, especially around establishing and preserving trust with clients, investors, and partners inside and outside the business. It is now regarded as essential to success and longevity, and mismanagement or complaints can trigger litigation and reputational damage.

• Enabled by data and technology, our services and solutions provide trust through assurance and help clients transform, grow and operate.
• SEC Chair Gary Gensler might become more assertive with the agency’s agenda if he believes his tenure might end if President Biden’s re-election appears doubtful in November.
• While regulation in the United States did not advance on a national level, nearly a dozen US states were quick to enact AI-related legislation.
• If there is one word that best describes what we can look forward to in the compliance world in 2025, it’s unpredictable.
• The Financial Action Task Force (FATF) has kept organizations on their toes with evolving guidelines on AML and CTF compliance.

Then, conduct internal audits to assess compliance levels and identify areas of improvement. The first step to resolving compliance issues within the organization is conducting a thorough assessment of the existing policies and procedures. This strategy enables the compliance officer to identify gaps and develop practical solutions. The information you gather from the assessment will become the roadmap for implementing an efficient compliance system. Regulators must address the combined characteristics of these entities from both financial and technology perspectives.

The insights and services we provide help to create long-term value for clients, people and society, and to build trust in the capital markets. The European Commission has introduced detailed Climate Disclosure Rules, while California has rolled out groundbreaking climate-related disclosure requirements 9. By 2025, Mexican companies preparing financial statements under Mexican Financial Reporting Standards must include sustainability information 10. KPMG Law has released a comprehensive study examining how companies must navigate an increasingly complex regulatory landscape. This informs readers about their responsibilities in ensuring regulatory compliance. Not all of the clauses of HIPAA or GLBA apply to each regulated entity.

Developing Compliance Strategies To Address Regulatory Challenges

The European Union stands out with its AI Act, which is the most detailed legislation dedicated to AI as of now. Conversely, the United States and the United Kingdom have relied upon their respective common law systems to address risks as they emerge. India has formulated an Advisory Group specific regulatory AI framework and is also working towards establishing a National AI Safety Institute. Our tracking system spots over 234 regulatory events daily across 190 countries. This fast-paced change means companies need agile compliance programs and resilient resource strategies. Leading organizations now see their compliance programs as strategic assets, not just cost centers.

Learn how top organizations adapt to constant regulatory change with agile frameworks, smart tools and future-ready strategies. The government adopted many regulatory adjustments in order to ease the regulatory load on businesses. The global turmoil is finally coming to an end, and things are returning to normal. This will need organizations to refocus their efforts on stability – something they have not done in over two years.

Changing Technology Landscape

Explore India Integrity Reports key findings on ethics perception amid economic shifts and heightened regulatory oversight in this first edition. Asking the better questions that unlock new answers to the working world’s most complex issues. Join NordLayer’s Referral Program to offer leading cybersecurity solutions & earn rewards. Holistic approach to secure connection of remote employees to the internet and private company resources to prevent threats. 2024 saw resolution to the important question of the legality of the CFPB’s funding mechanism, which meant the potential chaos of a ruling by the U.S.

Data privacy rules require consent to gather, process, or share cardholder data. While many decision-makers have a general understanding of what the term means, a definition of regulatory compliance is hard to come by. Understanding the many types of regulatory compliance and seeing examples of it in action can help decision-makers keep their companies out of legal trouble. Although your organization might not be subject to one regulatory standard, it likely follows compliance for at least one. It’s the organization’s responsibility to identify all the industry regulatory standards that oversee its data storage and access.

The dashboards built into compliance management systems provide executive members of the organization a real-time view of all compliance activities and important compliance metrics throughout the organization. The board of directors and other executive members of the organization rely on reporting from the regulatory compliance team. They have no other way to monitor or assess the performance of the current regulatory compliance framework or any of the activities within the framework. International businesses face challenges such as differing regulations, complex compliance frameworks, and navigating tariffs and trade agreements across various countries.

These new rules are accompanied by real enforcement, as the Department of Justice recently brought action against a large mortgage lender alleging undervaluation of a home based on the consumer’s race. It’s likely we’ll continue to see more in this area, affecting both the appraiser industry as well as how lenders manage and evaluate appraisals. This is the term du jour over the past few years, receiving mentions in the President’s State of the Union address, signaling that the regulatory focus on fees the agencies feel to be excessive will continue.

The biggest impact will be following up on the entities that are actually filing their information in the beneficial ownership databases in the United States and abroad. Regulators will continue to look to demonstrable evidence of credible challenge and dynamic risk assessment and decisioning from both within and across the board and senior management. As part of these expectations (and as part of supervisory focus and evolving regulatory reporting), regulators will expect increased and formalized documentation, mapping, ownership, and ongoing testing and monitoring of controls. Financial services firms, however, placed AML regulatory compliance concerns at the top of their compliance list, at 86%.

Compliance programs also require skilled execution by compliance officers. For example, IT companies that handle health data must comply with HIPAA. However, IT companies also base regulatory strategies on technical compliance standards. In addition to GLBA, financial companies must comply with reporting requirements under the Sarbanes-Oxley Act (SOX). And they must obey consumer protections mandated by the Dodd-Frank Act.

Rarely has the compliance landscape been more muddled or presented more of a challenge for healthcare organizations. HFMA empowers healthcare financial professionals with the tools and resources they need to overcome today’s toughest challenges. Proactively monitor and audit processes to detect and address compliance issues.

Although all appeals are not resolved, best practices suggest that banks proceed assuming the effective dates announced by the CFPB in 2024 will remain, unless notified otherwise. At the risk of being repetitive, it seems that we wonder every year if this may be the year that cannabis banking is legalized on the federal level through some version of the SAFE Banking Act. Similar to privacy, there is a complex series of state laws on the legalization of cannabis in its various forms, and a resolution of the ongoing conflict between federal and states’ laws would be welcomed. Perhaps 2025 will be the year, although Republican legislators are normally more resistant to this idea than their Democratic counterparts, so it may be a harder sell. As compliance professionals move forward, they also need to focus on leaders who are able to achieve compliance goals. Some commentators argue that understanding organizational culture can be difficult, as it involves an array of behaviors and attitudes.