As the impact of the COVID-19 pandemic declines, businesses are getting ready for future growth with enhanced business goals. However, there is a potential for new challenges and risks in the coming years with changes to regulatory compliances businesses need to fulfill.
To overcome these challenges while managing risks and governance, businesses must move away from traditional isolated enterprise Governance, Risk, and Compliance (GRC) strategies and embrace a more holistic and integrated approach to GRC.
Therefore, knowing where GRC is moving is important for businesses to face the future with certainty. As part of that, organizations must also know how to minimize compliance risks, achieve digital maturity, and make better-informed decisions with innovative and robust compliance management tools.
Let’s take a look at what GRC is, what its components are, and why it’s important for companies.
What is Governance, Risks, and Compliance?
Governance, Risk, and Compliance, or GRC, is an integrated approach for achieving organizational objectives by fulfilling all industry and government regulations while effectively managing risks and organizational governance.
The OCEG defines GRC as “the integrated collection of capabilities that enable an organization to reliably achieve objectives, address uncertainty, and act with integrity.”
GRC possesses two important components; Governance risk and compliance tools and processes used to adopt, deploy, and manage a robust GRC solution and an integrated method that helps organizations manage GRC with industry standards.
- Governance includes all the controls, policies, rules, and processes required to achieve an organization’s business goals. Effective Governance describes the responsibilities of important stakeholders of a business, like higher management and the board of directors. Good governance consists of characteristics such as accountabilities, effective resource management, transparency, ethics, conflict resolution, etc.
- GRC also combines risk management that contains risk management policies and procedures. Risk management must include strategies like risk forecasting, stakeholder escalations, security risk mitigation, etc.
- Compliance is following the rules and regulations the organization and various industrial bodies set. Companies must implement strategies to ensure employee business activities comply with those regulations. For example, communication compliance laws when allowing personal devices and instant messaging apps for business communication.
Future Trends in Governance, Risk, and Compliance
Enterprise Risk Management (ERM)
The pandemic showed businesses the importance of maintaining a strong ERM solution that makes them better prepared for such challenges that could come in 2023 and beyond. The trend is having more robust ERM programs that provide a holistic view of risks and brings better risk monitoring, analysis, and reporting. It should also provide insights into how risks relate to business strategies, processes, controls, and regulations to allow businesses to manage risks proactively and get a competitive advantage by turning them into new opportunities.
Business Continuity Management (BCM)
To build more resilient businesses, companies need to have a strong Business Continuity Management (BCM) program that enables them to recover from disasters easily and continue business operations without any hindrance. There also should be a proper alignment between ERM and BCM in the future.
Non-Financial risks (NFRs)
NFRs, like employee misconduct and compliance violations, have the potential to severely damage businesses also in the coming years. The reputational damages and regulatory fines can intensify these damages. Therefore, it is critical to better manage NFRs. There are innovative technologies like Advanced analytics and Artificial Intelligence (AI) engines with modeling techniques, such as Monte Carlo simulations, which provide risk metrics that business leaders can use to better mitigate NFRs.
Investing in Digital Transformation
Due to the pandemic, digital transformation has accelerated. Businesses recognized traditional manual and siloed GRC programs no longer work, but more integrated GRC is critical. Some research studies on GRC have revealed that financial services organizations use technologies like AI/ML and robotic process automation (RPA) have become critical for them. Thus, businesses will continue to invest in these technologies and automate repetitive GRC activities.
New GRC technologies for frontline engagement
New GRC technologies like AI and machine learning, chatbots, intuitive conversational interfaces, and web forms will simplify risk assessment and reporting, helping people who engage daily with clients and business operations.
Using Adaptable GRC technologies
Not every GRC system works well for every organization because different organization have their own governance, risks, and compliance protocols. Thus, GRC solutions will not be one-size-fits-all solutions. Therefore, it’s important to have a tailor-made GRC solution that is customizable and adaptable for every organization.
Top Compliance management considerations for 2023 and beyond
Regulatory compliance is usually a complex and ever-changing process and directly affects the GRC of an organization. New regulations can be introduced, and existing ones can be updated. Therefore, it is important to review the following top compliance management considerations for the coming years and make amendments for your businesses and GRC solutions:
- Check if your regulatory inventory is up-to-date and complete.
- Measure the effectiveness and efficiency of your culture of compliance and procedures.
- Assess how useful your compliance training and communications are.
- Evaluate the efficiency and effectiveness of your compliance monitoring and reporting systems.
- Check how your compliance violation prevention and reporting process works.
- Analyze gaps in your third-party management processes.
- Review the risks and effectiveness of your governance process.
As we move into 2023, many challenges and risks may follow. Businesses can survive by investing in the right GRC tools and technologies. The future of GRC will mainly revolve around integrated, collaborative, and data-driven GRC programs with technologies like AI/ML and analytics. With a robust GRC solution, companies can easily address the changes in regulatory compliance rules and build more resilient businesses.
How LeapXpert helps organizations enter the future of GRC?
Key functionality of The LeapXpert Communications Platform is providing governance and control in business communications. The LeapXpert Communications Platform offers clients a comprehensive view and full visibility of employee-customer communication without capturing employees’ private and personal messages. It includes enhanced modules with Information Barriers/Ethical Walls and Data Leakage Prevention (DLP). This allows enterprises to manage the security and compliance of business communication.
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