If you were part of the workforce before the year 2000, the emphasis on security and compliance might not have been as pronounced unless you were in a government role or a company with legal obligations. However, with the advent of cloud services in 2010, the landscape changed, and privacy compliance gained significant relevance, especially as companies expanded their services globally.
Fast forward to the 2020s, where security and compliance are now mainstream. Thanks to growing privacy requirements, an influx of customer audits, and multiple cloud service providers, today’s companies must monitor all potential risks to address compliance challenges adequately.
Today, corporate compliance has emerged as a top priority for many global corporations. However, the success of a compliance management program hinges on a structured approach that can effectively identify, monitor, and mitigate risks at all levels of the organization.
What is Compliance Monitoring?
Compliance monitoring consistently assesses whether an organization is adhering to regulatory requirements, including internal policies, relevant laws, regulations, and specific industry standards. It typically involves observing processes, conducting audits, and reviewing records to identify non-compliant areas and take corrective action.
Organizations must protect themselves from legal and financial risks to maintain their reputation. Compliance monitoring can also help businesses:
- Maintain a strong cybersecurity strength level
- Build trust with their stakeholders
- Avoid costly penalties or legal actions
- Streamline operational efficiency
- Promote a culture of accountability
- Improve processes
Regulatory and Industry Requirements
As one might expect, compliance monitoring involves adhering to certain regulatory and industry-specific requirements. Regulatory requirements can vary widely depending on the industry, location, and nature of the businesses. Some of the key regulatory bodies that organizations must comply with include:
- General Data Protection Regulation (GDPR): In the European Union (EU), the GDPR enforces strict guidelines for data protection and privacy—requiring organizations to implement monitoring and compliance programs.
- Health Insurance Portability and Accountability Act (HIPAA): HIPAA is widely known in the U.S. healthcare industry as a regulation that protects patient information.
- Payment Card Industry Data Security Standard (PCI DSS): This regulation applies to organizations that handle credit card information, such as merchants and financial institutions. The objective is to securely protect cardholder data and reduce fraud.
- International Organization for Standardization (ISO): This organization mandates certifications to ensure safety, quality, and efficiency among a variety of industries, such as food and energy management systems.
Staying compliant with your industry’s regulations is not a one-time task. It’s an ongoing process that requires continuous review and improvement. By staying ahead of the curve and updating your compliance monitoring processes, you can mitigate risks and enhance your operational efficiency, giving your business a competitive edge.
Establishing a Compliance Monitoring Program
A highly structured approach is recommended when establishing a compliance monitoring program. Before implementation, it’s important to define and set your objectives. Start by considering the internal policies relevant to your industry and organization, then use that information to determine what goals you’d like to achieve.
Risk Assessment and Prioritization
The first step to building an effective compliance monitoring program is conducting a thorough risk assessment. This process identifies any potential dangers or hazards in the workplace to avoid risks such as cyber-attacks, fraud, or equipment failure. Even something as simple as a lack of employee training could negatively affect the organization.
When assessing areas of risk, consider the probability and impact, then prioritize accordingly based on the severity. Ranking the likelihood of risks as low, medium, or high, or creating a scoring system is recommended.
Some common methods used for assessing risk include document reviews, interviews, and process walkthroughs. Many automated risk assessment tools on the market can help, such as RiskWatch and LogicManager. Risk management software can provide a myriad of benefits to organizations, including improved accuracy and efficiency. Organizations can stay ahead of the curve by regularly reviewing and updating risk assessments.
Developing Policies and Procedures
Clear and detailed communication is essential when developing company policies or standard operating procedures (SOPs). Policies should be documented and shared with all employees to promote awareness and ensure consistency across the organization.
Compliance monitoring policies and procedures should address the following areas:
- Data protection: Safeguarding data and complying with regulatory requirements
- Information security: Ensuring information is only accessible to authorized users
- Employee conduct: Complying with relevant laws and ethical standards and adhering to rules
- Vendor management: Ensuring that vendors comply with all relevant regulations and industry-specific requirements
- Incident response: Effectively handling security incidents to minimize damage
Other common policies include data classification and handling procedures, access control, and use policies for IT resources. Data is typically classified and handled by its level of sensitivity, while access control ensures that only authorized individuals have access to this information.
IT use policies refer to how company resources such as computers, networks, and software should be used. These policies should be reviewed regularly and updated to align with industry best practices.
Training and Awareness
Today’s businesses can’t afford not to invest in compliance training. Creating awareness of compliance issues among employees is crucial—to ensuring adherence to laws, regulations, and industry standards. Fostering a culture of compliance within your organization can yield many benefits, including increased employee morale and a more efficient work environment.
To be effective, compliance training should cover several key areas such as:
- Relevant regulations, policies, and procedures
- Roles and responsibilities of employees in maintaining compliance
- Data protection and privacy regulations and best practices for data security
- Financial reporting requirements and fraud prevention
- Cybersecurity awareness and best practices for securing sensitive data
- Role or department-specific compliance relevant to job functions
Compliance training can be facilitated in a classroom environment, through online modules, simulations, and/or regular refresher courses. Communicating regularly, offering incentives, and publicly recognizing employees will increase engagement and help reinforce a culture of compliance.
Compliance Monitoring Techniques
For compliance monitoring to be effective, organizations should identify potential issues before they escalate. Effective monitoring techniques can also help maintain regulatory compliance by encouraging a culture of accountability.
Continuous Monitoring and Auditing
Continuous monitoring and auditing involve tracking compliance status in real time across all company systems and processes. Proactivity is key to identifying and addressing compliance issues, as it allows for early detection and resolution.
Both internal and external audits play a large role in verifying compliance and identifying areas for improvement. There are tools available for continuous auditing that automate the process, collect and analyze data, and provide reporting. As previously mentioned, audits may include document reviews, process walkthroughs, interviews, and on-site inspections.
The frequency of compliance audits depends on several factors, such as the level of risk, industry requirements, and the organization’s needs. Establishing a regular audit schedule is highly recommended so that any findings are addressed promptly. Some organizations may conduct audits as often as monthly or bi-monthly, while others follow a semi-annual, quarterly, or annual monitoring schedule.
Technology Solutions
Compliance monitoring can be quite complex; therefore utilizing technology solutions can help streamline the process and increase overall efficiency. These solutions not only automate but also provide real-time visibility and enable data-driven decision-making. Some of the key technology solutions available available include:
- Government, Risk, and Compliance (GRC) Platforms: Tracks incidents and improves risk management
- Compliance Management Systems (CMS): Streamline compliance processes
- Security Information and Event Management (SIEM): Detect and respond to security incidents
- Data Loss Prevention (DLP) Tools: Monitory and protect sensitive data
- Privacy Management Tools: Ensure compliance with data protection and privacy
Data analytics tools help identify patterns and areas of non-compliance when working with large volumes of data, while automation tools help streamline the compliance process. The use of technology solutions as a whole will reduce manual effort and improve the overall effectiveness of monitoring activities.
Compliance Reporting and Remediation
Compliance reporting and remediation are also equally important to a compliance management program. Documentation of compliance efforts is critical to maintaining detailed records, in this instance this data should be presented to regulators, auditors, and/or stakeholders.
Reporting and Documentation
There are different types of compliance reports, all of which aim to show that an organization is adhering to legal and regulatory requirements. These may include internal reports, regulatory reports, and audit reports.
Compliance reports should outline the organization’s stance on compliance, highlight any non-compliant areas, and detail remediation efforts. The focus of these reports may vary slightly by audience, as they could be tailored to management, regulators, and/or external stakeholders.
It’s imperative to maintain audit trails, properly manage version control, and ensure that call compliance-related documentation is securely stored.
Remediation and Corrective Action
Remediation refers to the process of addressing or correcting any compliance issues that are identified during an audit. A structured process should be in place to resolve any problems and take corrective action to prevent future issues.
This process typically involves identifying the root cause of the issue, planning for corrective action, implementing the appropriate changes, and following up to ensure the effectiveness of the outcome.
Best practices include prioritizing issues by risk level, using tools such as incident management systems to track efforts, and regularly monitoring the progress of remediation to ensure effectiveness. In many cases, there may be a need to improve processes, update company policies, facilitate additional employee training, and/or enhance technology.
Continuous Improvement and Collaboration
Organizations should aim to become a culture known for its continuous process improvement. This requires regular assessment of compliance monitoring programs and continuous refining. Effective collaboration also plays a large role here, as compliance efforts need to be well-coordinated across internal and external teams.
Ongoing Evaluation and Refinement
For a compliance monitoring program to be effective, regular evaluation and refinement are needed—to achieve the desired outcomes. The best thing an organization can do is review its compliance monitoring processes frequently and ask stakeholders for feedback. There are always opportunities for improvement, and sometimes it takes several sets of eyes to identify them.
Adhering to best practices can also be extremely helpful, as chances are lessons have been learned from past non-compliant issues and audit results. Companies should also look to their industry partners to learn what has and hasn’t worked historically. It’s important to stay up-to-date with any changes in the industry, advancements in technology, and emerging trends.
Cross-functional Collaboration
Cross-functional collaboration refers to bringing together different teams and departments within an organization to improve the effectiveness of your compliance marketing. As they say, “Two heads are better than one,” and when various teams join forces, they can leverage their diverse expertise. For example, someone working in the legal department may bring differing information to the table than someone from IT.
There are many benefits to cross-functional collaboration thanks to the variety of perspectives and specialized skills that each team brings to the table. Legal teams can guide regulatory requirements and ensure compliance with all applicable laws. IT teams can assist with the implementation of new technology solutions, finance teams can help facilitate any reporting requirements, and operations teams can help execute processes and procedures. Finally, human resources teams can facilitate employee training, share policy updates, and promote a culture of compliance within the organization.
How Teramind Makes Compliance Monitoring Easy
Teramind is a leading employee monitoring and productivity management platform. Here’s how you can use Teramind to monitor compliance for your employees.
- Real-Time Compliance Tracking: Teramind offers live monitoring of user activities, ensuring that all actions are aligned with industry regulations and internal policies, reducing the risk of non-compliance.
- Detailed Audit Trails: The platform provides comprehensive logs and reports, making it easier to track and review user activities and generate documentation necessary for audits and regulatory reviews.
- Automated Policy Enforcement: Teramind automates the enforcement of compliance policies by flagging and alerting on any deviations or suspicious activities, ensuring that compliance standards are consistently met.
- Customizable Compliance Alerts: Tailor compliance notifications and alerts based on specific regulations and company policies, allowing for proactive management and immediate response to potential compliance issues.
FAQs
What should be in a compliance monitoring plan?
To create an effective compliance monitoring program, start by conducting a thorough compliance audit to assess existing policies and identify gaps. Utilize tools for a gap analysis, then evaluate your organization’s risk profile to prioritize monitoring efforts effectively. Finally, stress-test your policies through simulated scenarios to identify vulnerabilities and enhance your overall compliance framework.
What are the three ways of monitoring compliance?
The three ways of monitoring compliance typically include audits, continuous monitoring, and self-assessments. Audits provide periodic evaluations of adherence to regulations and internal policies, while continuous monitoring uses technology to track compliance in real-time. Self-assessments empower employees to evaluate their own understanding and adherence to compliance protocols.
What is the difference between compliance monitoring and surveillance?
Compliance monitoring focuses on ensuring that an organization adheres to laws, regulations, and internal policies through systematic reviews and assessments. In contrast, surveillance involves real-time observation and tracking of activities, often for security or fraud prevention purposes. While both aim to uphold integrity, compliance monitoring emphasizes adherence to established standards, whereas surveillance is more about detecting and preventing potential breaches.
Conclusion
Adhering to compliance standards and regulations is crucial to an organization’s success. A well-designed compliance management system will help mitigate risks, boost operational efficiency, and maintain a strong reputation.
With the influx of security risks, including data breaches, failure to comply with compliance requirements can be consequential—leading to fines and financial loss, legal proceedings, business closure, and more.
Compliance monitoring helps promote a culture of accountability to both internal and external stakeholders. Most importantly, it helps businesses optimize efficiency, increase customer confidence, and gain a competitive edge in the market.
