More than half. That’s how many of high-level executives and professionals, including those involved with regulatory compliance, evaluate their company’s regulatory compliance endeavors as inadequate and non-innovative. At least that’s what is suggested by a 2017 poll of 580 companies by leading consulting and advisory services firm Deloitte.
Regulatory compliance requirements are constantly in flux based on decisions made by international governments and other bodies, such as International Organization for Standardization. Despite the same Deloitte poll suggesting around 44 percent of the surveyed individuals also “anticipate an increase in regulatory enforcement in the next 12 months,” more and more companies globally risk falling behind growing compliance standards. What’s more is that these companies, despite efforts to increase enforcement, also face the dire consequences (e.g. monetary and legal fines) of non-compliance.
But what exactly is regulatory compliance, and why is it so important that companies uphold such high standards? Regardless of industry, size, location, and revenue all businesses are subject to legal compliance — PCI standards, regulation SCI rules, HIPAA privacy standards, and more — in order to protect data about their operations, employees, and customers.
In order to boost their levels of compliance and better arm themselves in tackling compliance-related challenges, an increasing number of companies are implementing forms of enterprise automation — robotic process automation (RPA), in particular. In order to gain a better understanding of the details of regulatory compliance, let’s consider some of the biggest global compliance requirements as well as what RPA, specifically UiPath’s software, can bring to the table in driving compliance modernization and helping companies achieve higher levels of compliance than ever before.
Understanding compliance & its challenges
Regulatory compliance first became an issue of importance for public and private companies in the late 1990s. However, after the 2008 financial crisis, establishing and maintaining effective compliance has grown even further in importance, especially in order to avoid the financial and operational outcomes of failing to properly comply. Notably, some of the biggest compliance standards include the Health Insurance Portability and Accountability Act (HIPAA), the Sarbanes-Oxley Act (SOX), Payment Card Industry Data Security Standard (PCI-DSS), the Gramm-Leach-Bliley Act (GLBA), the Federal Information Security Management Act (FISMA), and Regulation SCI, among others.
One of the foundational regulatory standards, HIPAA was introduced in 1996 to govern privacy and security related to the usage and disclosure of healthcare-related information. Introduced three years later, the GLBA is geared toward the financial services industry and regulates the ways in which financial institutions manage their private informations. Similarly, Regulation SCI standards require financial trading companies to maintain procedures for IT operations and the flow of information between enterprise applications.
In 2002, SOX was enacted following the Enron scandal to ensure the reliability of corporate disclosures and protect individuals seeking to invest in, for the most part, in publicly-held companies. Also in 2002, FISMA emerged to improve the information security of US federal agencies as well as their contractors. Shortly thereafter, in 2004, PCI DSS regulations were established to set the technical and operational security standards for all companies that process credit cards.
As a result of these regulations, compliance is increasingly becoming a focus point for companies around the world. All in all, however, maintaining regulatory compliance remains a significant areas of risk, particularly due the high frequency of changes made within the regulatory market. In 2014, there were 155 regulatory changes made daily, totaling 40,603 alerts issued for the year. And, according to Thomson Reuters, this number isn’t likely decreasing any time soon.
Thus, despite the best of compliance intentions, such complexities of regulatory bodies present significant stumbling blocks for companies in efforts to effectively meeting all regulations on a regular basis. In fact, the head of ethics and compliance in PwC’s UK forensics practice, Tracey Groves, suggests that:
“The main challenges facing compliance professionals in today’s world are based on the pace of change and level of uncertainty we are experiencing.”
Many companies face additional challenges — a lack of technological capacities, inefficient operational processes, limited executive support, and a shortage of talent and knowledge about improving compliance measures — that exacerbate the difficulties of adhering to regulatory measures in the fast-paced world of compliance.
Reducing compliance challenges with RPA
At this point, you are probably wondering: How can RPA support the legal considerations of companies, and what are the legal benefits of implementing this automation technology to support enforcement efforts? UiPath’s leading RPA software, in particular, enables companies engaging in enterprise automation to streamline compliance measures in the following ways:
Superior levels of oversight
The UiPath RPA solution allows businesses to be in control of executing their own operational processes internally and is an increasingly viable alternative to outsourcing and offshoring. During the automation process, RPA software robots’ actions are saved into a log where they can be reviewed and monitored at any time. This means that companies have a greater degree of oversight and control over their own operations, and employees can deal with compliance issues more easily if they arise.
Enhanced reliability and consistency
Once a process is established as an automated workflow with the UiPath RPA solution, it is executed in the same way every time without any errors, regardless of whether the process concerns data transfer and migration, invoice processing, or purchase order issuing. Therefore, companies can establish unparalleled levels of process accuracy, especially compared to the work that can be done by human employees and maintain high levels of compliance of all business processes.
Improved audit preparedness
While they do not necessarily occur on a regular basis, audits of a company’s legal compliance are possible, and passing these is critical for the success of every business. Because UiPath’s RPA software robots are able to save their actions into an activity log, companies will be prepared for an external audit, if and when the time comes. This log file provides the process information necessary (which process were executed and how, when exceptions were generated, and the ways in which employees intervened to deal with issues) that is needed to effectively respond to a regulatory audit. Moreover, with effective compliance reporting and integrated data archives, company management is better able to anticipate and manage compliance issues and proactively conduct internal reviews of compliance statuses.
From modernization to cognitive compliance
It’s clear that regulatory compliance is here to stay. But through the enterprise automation provided by RPA, companies can achieve compliance modernization throughout the value chain and keep up with the face-paced regulatory environment. Take, for example, a medium-sized financial services company using automation to support its compliance measures. On the micro-level, RPA is used to improve process optimization and reduce the human error involved with running background checks on potential lenders, processing inquiries to credit score institutions, and managing mortgages. On the macro-level, however, RPA enables the business to make use of compliance-related stats and align regulatory requirements with operational goals.
Considering the developments of both legal regulations as well as automation technologies, it is also important to think about what is possible for the future. Companies can already now rise up to the compliance challenge and meet legal standards and regulations using automation technologies. And RPA is a good indicator of what’s to come. Though we cannot know for sure what will unfold in the coming years, further technological breakthroughs — especially artificial intelligence and cognitive computing — are bound to bring promising advances in dealing with increasingly complex, judgement-driven compliance efforts.