Compliance monitoring is essential for any business dealing with sensitive data. It’s key to ensuring adherence to critical laws and regulations and is part of a multi-pronged Governance, Risk, and Compliance (GRC) approach that organizations take to remain up to standard. But what is compliance monitoring at an operational level, and why should organizations prioritize it?
What Is Compliance Monitoring and How Do You Get Started?
Compliance monitoring is the ongoing process you use to make sure your business is following all required laws, regulations, and internal policies. It involves regularly reviewing your operations, tracking compliance activities, and using tools or checks to spot issues before they turn into violations or penalties. By monitoring compliance on an ongoing basis, you can reduce risk, stay aligned with regulatory requirements, and keep your business running smoothly as rules and expectations change.
Say a business wants to get serious about its compliance efforts and implement a monitoring program. Where do they start? And what exactly does the process entail? A strong compliance monitoring plan begins with understanding requirements, assessing risk, and establishing repeatable processes that can adapt as regulations evolve.
Understanding the Applicable Requirements
To get started with compliance monitoring, you first need to understand which laws and regulations apply to your business. Familiarize yourself with these requirements and make sure your staff understands them inside and out, especially those responsible for data handling, security, and reporting.
For example, requirements often vary based on your industry and geography:
- Healthcare: One of the major regulations is HIPAA, a federal law that safeguards protected health information.
- Financial Services: Compliance often includes frameworks related to data privacy, cybersecurity, anti-money laundering, and financial reporting.
You must also consider data-specific and global regulations, such as the General Data Protection Regulation (GDPR), which applies to organizations that process personal data belonging to individuals in the European Union, and Payment Card Industry (PCI) standards for handling credit card data.
All of these regulations address the same core concerns: protecting sensitive information, reducing risk, and ensuring accountability across systems and processes.
Performing Risk Assessment and Analysis
Risk assessment and analysis are crucial to effective compliance monitoring. It involves identifying and evaluating potential risks that could prevent your organization from meeting its compliance obligations.
Identify the threats you are most at risk for, consider their potential impact, and determine the likelihood of their occurrence. Many organizations take a risk-based approach, prioritizing monitoring efforts around the areas that carry the highest regulatory or business impact. This approach helps teams focus resources where failures would be most costly.
Developing Compliance Policies
Without uniform procedures in place, compliance becomes difficult, if not impossible. Once you’ve got an idea of the possible risks, you should develop or update your compliance policies to align with newfound risks and/or requirements.
Create official documents that clearly outline how your organization plans to comply with relevant standards. Establish procedures to be followed on a regular basis, whether day-to-day, week-to-week, month-to-month, or less frequently. These policies should be reviewed and updated regularly to reflect regulatory changes and internal process updates.
What Are 3 Techniques for Monitoring Compliance?
To effectively monitor compliance, you must regularly review operations to ensure protocols are being followed. Monitoring typically involves a mix of real-time oversight and periodic evaluations, such as automated tools that track compliance metrics and formal audits conducted internally or by third parties.
Below are three compliance monitoring examples that help support this process and maintain ongoing oversight.
1. Providing Training Programs
A key element of compliance in the workplace is training and education. Staff should be made aware of critical monitoring protocols and their individual responsibilities within the compliance process. Tailor different programs to different roles in your organization. For instance, compliance training for IT will likely look a bit different from compliance training for HR.
Here are a few vital training topics for employees:
- Cybersecurity
- Data privacy
- Diversity
- HR Compliance
- Workplace safety
- Anti-corruption
While this list is far from exhaustive, it’s a good place to start. By helping employees understand what compliance monitoring is and what it involves, you can get off on the right foot and ensure your program is a success while reducing the risk of human error or inconsistent enforcement.
2. Implementing Compliance Controls
Compliance controls help businesses prevent, detect, and respond to violations. One of the most common preventative methods organizations use is controlled access. This basically means that only approved parties get access to certain information.
There are several different tools you can implement to safeguard data from unauthorized persons, including passkeys. Other common controls include role-based access, automated alerts, and documented approval workflows that create an audit trail.
3. Reporting Incidents
Chances are, you will encounter issues at some point during the compliance monitoring process. When that happens, it pays to have an incident response plan in place so that you can easily report incidents and resume regular business operations.
Be sure to establish clear guidelines for reporting violations and taking corrective action. In some cases, regulations require organizations to notify regulators or affected parties within defined timeframes. Clear documentation and remediation tracking also help demonstrate good-faith compliance during audits or regulatory reviews.
Compliance monitoring requires ongoing effort from the entire organization. Over time, you may find that certain procedures are no longer effective, and you will need to update policy and training to reflect these changes. Keep an open line of communication with stakeholders and regulatory bodies. This demonstrates a commitment to compliance and transparency and supports a culture of accountability rather than reactive enforcement.
What Is the Main Objective of a Compliance Monitoring Plan?
Non-compliance is a growing issue, one that has significant consequences for offenders. Violating cybersecurity and data privacy laws can cost businesses several thousand or even millions of dollars, depending on the nature and duration of the offense.
The good news is you can offset these kinds of hefty penalties by implementing a strong compliance monitoring program. Monitoring and compliance also offer a number of other benefits.
Greater Operational Efficiency
What better way to improve operational efficiency than by closely scrutinizing your existing processes? Compliance monitoring forces companies to take a long, hard look at the way they do things and identify areas for improvement. It encourages them to get on board with the latest tech and compliance best practices, which can enhance business operations across the board and reduce manual, repetitive work.
Improved Reputation and Customer Loyalty
Organizations with compliance monitoring plans may be seen more favorably in their respective industries, as it shows they take compliance seriously. It can also help foster customer trust and loyalty. This trust is especially critical for organizations handling financial data or sensitive customer information.
Higher Employee Morale
No one wants to work for an irresponsible company. Prioritizing ethical compliance monitoring helps shift the liability off of employees, giving them peace of mind and a sense of pride in the work they do. Also, clear compliance guidelines provide employees with a better understanding of their roles and responsibilities, reducing uncertainty and lowering workplace stress.
Better Risk Management
It’s best to catch and stop threats in their tracks, if possible. By continuously monitoring and ensuring compliance with relevant rules and regulations, businesses can mitigate all sorts of risks, from social engineering to IoT malware attacks, which rose by 37% in 2023. Compliance monitoring doesn’t just spot non-compliance issues; it also helps organizations manage cybersecurity risks and respond faster when problems arise.
Compliance Monitoring Is Easier With the Right Tools
Compliance monitoring is an ongoing responsibility, not a one-time task. As regulations change and your organization grows, keeping controls, evidence, and tasks aligned can quickly become time-consuming and complex, especially if you’re relying on spreadsheets or disconnected systems.
Compyl helps simplify risk and control management by bringing everything into one centralized platform. You can manage controls across multiple frameworks, track tasks in one place, and continuously validate that your controls are working as intended. Automated evidence collection and integrations reduce manual work, while clear dashboards give you visibility into risk and compliance without extra reporting effort.
If you’re looking for a more efficient way to manage your compliance program, learn more about Compyl’s compliance solution and how it can support your organization’s monitoring and oversight needs.
