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Leading organizations that view compliance as more than a checkbox exercise are using data to discover not only the numbers, but also Why certain trends are emerging and how they may affect the business.
While sound compliance programs thrive on consistency, they also need to be flexible enough to evolve with ever-changing policies and regulations. Effective use of data is key to this agility and is at the heart of all success compliance programs.
Compliance is an essential function that needs to be integrated across the business – from managing external regulations and internal policies to creating in-depth employee training. The right data can help leaders gauge the state of their organization’s culture – a powerful indicator of business integrity.
As an example of the power of compliance data, an increase in the number of reported incidents could indicate a positive shift in corporate culture, with employees feeling more empowered to speak up about questions or concerns in the workplace. However, it may also indicate an emerging risk within the organization that needs to be addressed.
Correlating this with other key data points, such as region- or location-specific reporting volumes, helps identify key drivers. Understanding these critical root causes is essential for compliance, not only because it mitigates risk, but it helps organizations evolve and become stronger. But to reach this level of analysis, data insights must be fully discoverable.
Uncover deeper insights
Using technology to collect data and unravel insights is nothing new. Countless industries have matured their use of data to discover deeper business intelligence for competitive advantage.
For example, in the early 2000s, Walmart perfected the science of using data to optimize product assortment, using historical and predictive customer demand models to ensure the right product was in the right place on store shelves at the right time, enabling the profit in the store was maximized. process. And Major League Baseball used extensive data to create the “Baseball Encyclopedia,” a compendium of researched statistics that replaces intuition with empirical data analysis so that winning teams could be built on modest budgets.
We are now seeing a similar wave of change in compliance, with organizations digging deeper into data so compliance officers can rely less on their own intuition and more on the actual insights and trends they see firsthand. Especially today, amid increasing and ongoing corporate data breaches, highly anticipated ESG standards and regulations, and mass layoffs of employees, ensuring organizations use data to proactively approach compliance is more important than ever.
Here’s how organizations can successfully leverage compliance data.
Collect and compare data sources to create a strong data base
When it comes to compliance, the more data the better. This means that collecting and comparing data from different sources is the best way to correlate data points to uncover key trends and predict potential risks.
For example, an increase in internal reports coming in through the organization’s various reporting systems—telephone hotlines, online portals, or directly to managers—may indicate poor compliance and organizational problems. While more reports seem to suggest there are more problems, an increase in reporting data is one Good thing, and essential to evolving compliance programs.
In fact, organizations that receive more reporting data from their employees perform better in almost every size. They are more profitable, have better governance structures and a healthier working environment. This is largely because more reporting data gives the organization a more complete picture of its compliance programs and culture.
Embrace digital transformation
Collecting, monitoring and assessing data is a strong catalyst for digital transformation. It can take organizations beyond legacy processes that used spreadsheets or even notebooks for policy management, compliance tracking, reporting, and more. This level of digitization helps organizations scale and mature effectively, removing business silos.
In addition, digital transformation can lead to automation that increases productivity, prevents human error and allows professionals to focus more on valuable aspects of their work instead of manually entering and analyzing data.
View compliance holistically
There aren’t many positions that really think about business compliance from start to finish, and that’s a problem. Transforming the way data is used can break down data silos that have built up naturally over time.
For example, compliance professionals typically look only at data that falls under the umbrella of compliance and sometimes fail to consider how other factors within the company, such as HR or even IT data, may affect their program. When data becomes available in business units, organizations can make connections between teams and answer critical questions about the state of their business.
Discover gaps and successes in the program
Enhanced and consolidated data provides a real-time snapshot of how effective and mature a compliance program is. Furthermore, they reveal micro-trends that can contribute to macro-level changes. A better understanding of trends at both the micro and macro levels is what moves the needle for enhanced compliance programs and proactive risk management.
Just as insurance companies rely on actuaries to determine exposure to liability, organizations can use their compliance data to drive effective decision-making and proactive risk management. Understanding risk signals, such as incident reporting volume, is an important factor in closing compliance gaps and building a successful program. The result of this exercise is a program that adheres to laws and regulations, creates a safe and ethical work environment, protects the company from internal and external risks, and much more.
Compliance is transforming with the help of data and the ability to discover risk signals and causal mechanisms. Those at the forefront of this movement are implementing more robust, compliant data protocols, making it easier to contextualize and gain confidence in their business decisions.
While data has always been critical to compliance, leaders who move beyond viewing it as a checkbox exercise and dig deeper are developing their compliance programs and helping to build ethical corporate cultures that in turn drive business success.
Bob McCarter is chief product and technology officer at NAVEX worldwide.
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