5 Compliance Goals of Every Compliance and Risk Leader in 2024
Heightened expectations for transparency and accountability will keep compliance leaders on their toes throughout 2024. There are many storms to weather, thanks to evolving regulations, environmental and climate concerns, as well as rapid tech advancements. Chief Compliance Officers (CCOs) want to reiterate that getting too complacent is not in their vocabulary while working towards their organization’s governance, risk, and compliance (GRC) goals. As we enter another year, we’d like to give compliance leaders the confidence to forge forward with a sense of awareness about the regulatory and legal landscape to chart practical compliance goals.
On that note, here are the top compliance goals based on recent industry predictions and research that CCOs must be mindful of in 2024:
Compliance Goals & Priorities for the Year
1. Tech Upgrades Matter
A significant priority for CCOs is immediately replacing aging compliance platforms and legacy infrastructure. Technology will dominate the investment priority to elevate organizations’ regulatory monitoring, risk reporting, and regulatory compliance. In today’s digital age, below are the technology priorities for maintaining regulatory compliance:
- AI and GenAI to Lead the Way:
PwC’s 2023 Emerging Technology Survey finds that almost 73% of U.S. companies have adopted AI in at least one business area. Nearly 54% of firms said the same about GenAI adoption. GenAI’s remarkable scalability and transformative value in drawing data insights from unstructured data augment organizations to be more decision-driven. AI models available on the cloud services and natural language processing (NLP) capabilities in AI tools help compliance professionals identify and cater to their compliance needs with accuracy that cannot be attained from manual processes. AI and GenAI tools for real-time risk monitoring and anomaly detection can identify non-compliance risks beforehand. Therefore, compliance teams and leaders need to consider the merits associated with compliance tools and platforms embedded with AI and GenAI capabilities.
- Advancements and Use of RegTech
AI, GenAI, and rapid digitization are here to stay. They power organizations with robust capabilities like predictive analytics and intelligent task automation of risk management and compliance workflows. Due to these dynamic tech evolutions in highly regulated industries like the banking, financial services, and insurance (BFSI) sectors, the investment and use of RegTech or regulatory technologies are slated to get five times higher compared to 2020. A recent Deloitte survey shows more than 500 RegTech companies exist in the marketplace. The risk mitigation and robust data governance and privacy features of RegTech tools reduce reliance on human staff and drive demand even across non-financial spaces to help firms minimize their overall risks to meet compliance goals.
By 2032, the global RegTech market is predicted to reach $65.7 billion. Compliance leaders must note that the growth momentum of RegTech is attributable to the increasing incidence of cybercrimes, the adoption of digital payment modalities, and collaboration between regulatory agencies and financial institutions.
- Cyber Security and Data Privacy Solution Adoption:
The Securities and Exchange Commission (SEC) announced 2024 exam priorities for registered firms to examine how they treat and handle cyber security risks, engage with FinTech companies and crypto assets, and their anti-money laundering programs. The agenda behind identifying the three key areas is to help assess the scope of risks for evaluating compliance programs, disclosures, governance practices, and SEC reporting. Such regulatory measures impact the tech implementation and investment decisions to ward off cyber security threats and data privacy breaches.
Gartner predicts that organizations will adopt data processing and analytics solutions with functionalities that earlier didn’t exist to fulfill the required privacy and security expectations. The availability of solutions built on privacy-by-design principles helps users readily implement data privacy-enhancing computation (PEC) techniques. By 2025, 60% of large organizations are expected to incorporate at least one type of PEC method across their analytics, cloud computing, and business intelligence use cases. Investments to enhance cyber security and data privacy management will be one of the top agendas for keeping up with compliance goals for the year.
2. Growing Regulatory Intensity:
The Regulatory intensity in the coming fiscal year tightens with the economic crisis and political uncertainties. Firms can expect stricter evaluations, poor ratings, and supervisory actions for falling behind on their risk management and compliance commitments. Following the SEC rules, there may be efforts to finalize current regulations and apply them to emerging areas like automated systems, predictive analytics, digital currencies, etc.
Regulators expect more proactive remediations against a firm’s compliance deficiencies. Therefore, firms are expected to demonstrate commitment to self-resolve and show accountability. Also, regulators will investigate operational and intangible risks while identifying firms subject to reputational risk with repeated offenses. That includes focusing on data and models beyond cyber security and IT risks, and data quality, controls, and management.
3. Data Ahead of Everything:
The biggest bottleneck to compliance reporting is the access to real-time data. Data silos and complicated systems, and data taxonomies drive incompatibility within teams and stakeholders, impacting compliance productivity. Compliance officials strive towards achieving a single source of truth with compliance data, data assets, data hierarchy, reports, documentation, interactions, monitoring, and compliance guidance under one platform. It simplifies process and data tracking, reporting, and benchmarking to respond to regulatory changes and needs dynamically. Removing data silos is a first step to enhancing transparency for a more accurate picture of compliance goals and risks.
4. Adequate Futureproofing:
To succeed in 2024, a forward-thinking mindset and a high tolerance for uncertainties can greatly benefit CCOs. Risks and changes at geopolitical, environmental, and macroeconomic levels occur in a continuum. It pays to be proactive with regular risk assessments, risk mapping, and continuous monitoring of compliance goals and contingency plans. Futureproofing the organization for compliance also requires openly communicating and training employees and staff about compliance plans and procedures. Timely disclosure with regulators, investors, and customers helps improve the organizations’ compliance posture.
The American Bankers Association (ABA) suggests that the CCOs of 2030 must have subject-matter expertise in compliance and act as implementation managers for tools and services. They are most likely expected to empower their teams with the speed and interconnectedness to move with the sweeping change of future financial markets. Additionally, they must adopt a ‘compliance by design’ rather than stick to the ‘three lines of defense’ approach. According to the 2022 Accenture Compliance Risk study, 95% of compliance leaders are building a culture of compliance to build org-wide accountability.
5. Implementing Robust Defenses for Resilience:
CCOs are expected to lead the implementation of solid defense and risk prevention policies. They are responsible for building and pivoting robust compliance goals and protocols, pre-examining loopholes across systems and processes, and remediation or backup measures. Adding to the ABA expectations of CCO from 2030, today’s compliance leaders have the onus of guiding the organization with sound compliance knowledge and active involvement in making compliance technology decisions to protect against compliance damage.
Let’s Connect for Compliance Today!
CCOs are the corporate watch guards with a ponderous role of ensuring all activities and elements are free from the risk of violations that lead to expensive damages and fines. For an organization, the CCO is the first advisory and link to the complex, external regulatory structure. OpenPages Regulatory Compliance Management (RCM) solution is like the central nervous system with a centralized repository of regulatory obligations and helps users understand compliance requirements. A forward-thinking CCO and OpenPages RCM solution would be a formidable force to reduce compliance costs and complexities.
There’s more to discover about the end-to-end regulatory compliance management platform for 2024. iTech GRC’s aim is to make your organization’s compliance journeys seamless to fulfill your GRC plans.
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