Did you know that risk and compliance programs are growing across organizations? Most recently, experts found that more advanced programs grew by 29% while basic programs declined by 35%.
If your company hasn’t tried to improve its compliance risk program, it is falling behind. Luckily, there’s an easy way to improve your compliance risk assessment strategy through modern solutions like predictive analytics.
To learn more about compliance risk and predictive analytics, keep reading.
Compliance risk refers to any potential loss that a business may have when they fail to comply with industry standards. You may hear some professionals refer to this as an “integrity risk.”
The “risk” we are referring to includes both financial penalties as well as damage to the company’s reputation. Here are some of the compliance risks you may be exposed to if your company has a poor compliance record:
No matter the size of your company, you are still exposed to this risk. So, you must protect your company by staying compliant with laws, regulations, and standards.
To start (and continue) complying with regulatory standards, a company must juggle many things simultaneously. Here are some considerations your organization should make:
By following this outline, you will decrease your compliance risk while supporting your company in other ways. By complying with standards, you are improving your company’s operations. In the end, work will become easier, and you won’t have to take risks.
Your compliance risk assessment strategy must be airtight if you want to start complying with regulatory standards and protect your company from all the bad things that could happen.
Here are the steps you should consider while you’re building your assessment strategy:
While this may not be your exact assessment strategy, it’s a great starting point. Your company may require a more aggressive approach if you haven’t been worried about compliance until recently.
Alternatively, you should consider predictive analytics. We’ll touch more on this later.
If you don’t comply with the regulatory standards of your industry, you may incur multiple kinds of compliance risks. There are the main categories to consider:
Privacy and data security refer to effectively managing sensitive and confidential customer and employee data. Laws associated with this category focus on preventing malware, phishing, hacking, and data leakage. This is a prime example of how complying with industry standards can improve your company overall. By following laws related to data security, you’re protecting your employees and customers.
Workplace health and safety refer to preventing accidents by creating low-risk environments. Without proper health and safety in the workplace, your company may cause injuries, illnesses, and even deaths.
Process risks refer to potential administrative errors. These can lead to poor quality assurance checks, unfulfilled machine maintenance, and errors in reporting and accounting.
Environmental impact refers to how your company may harm the environment around it, whether from poor air quality, lack of ventilation, mold, asbestos, or other harmful elements.
Lastly, social impact refers to how your company affects the social climate. Without industry compliance, your company may become a toxic work environment, lack diversity, or have poor labor standards.
This extensive list is intense and scary. That’s why you should take compliance risks seriously. Without a proper game plan, your company could fall through the cracks.
Predictive analytics is a system that can sort through company data. It can identify patterns and behaviors that indicate negative outcomes, including poor compliance.
Over time, predictive analytics systems can make predictions about a company’s future by looking at historical data and using statistical modeling. It helps the company understand the current compliance status, identify business risks, and prioritize actions.
Organizations use predictive analytics to solve problems and explore opportunities. Depending on the system you use, you’ll be able to reduce compliance risk while bettering your company in other ways.
Predictive analytics systems can address multiple important factors:
The list goes on and on. These systems can operate with compliance in mind while predicting risk and providing continuous monitoring. When it comes to compliance risk assessment strategy, predictive analytics takes care of it all. All you must do is respond to its findings and monitor its work. Therefore, predictive analytics is so important to lowering compliance risk.
If you’re unsure about your current level of compliance risk, you should use our Compliance Risk Predictor. It helps you to prioritize your actions, create remediation plans, and automate monitoring. After determining your level of risk, you can go forward with controlling and monitoring your company’s compliance risk.
One of the best ways to do this is through predictive analytics. Whether your company is high-risk or low-risk, you can amend and protect your company from any harm that may come it’s way.
Book a free demo today and start detecting emerging risks and closely monitoring data for a better opportunity to expedite compliance and discovery.