Following up from my previous post, today I’ll dive a little deeper into how automation can also help transform compliance processes.
No matter the industry, companies must take an active role in ensuring they meet legal compliance standards and rules in order to produce their operations, employees, and customers.
While these exact rules and standards vary depending on a company’s location, size, and revenue, all business are subject to legal oversight, from tax laws, regulations like the Federal Information Security Modernization Act (FISMA), Health Insurance Portability and Accountability Act (HIPAA), or standards like ISO 9000 or Payment Card Industry (PCI) Security Standards.
After the 2008 financial crisis, and with de facto global frameworks like the European Union Global Data Privacy Regulation (GDPR), establishing and maintaining effective compliance has become even more important, especially to avoid the financial and operational consequences of non-compliance.
Unfortunately, many companies still don’t know if their processes are not meeting compliance standards, or how to remedy non-compliant operations before it’s too late.
Allen & Overy, a London-based international law firm, suggests that due to the higher pressures of regulatory scrutiny today, “compliance has moved up the corporate boardroom agenda.”
As a result, compliance with legal regulations cannot be a one-time responsibility for modern companies. Rather, businesses must make it an integral part of day-to-day operations. It’s only through regular and strict compliance with the applicable laws and regulations that companies can attain advantages such as:
Reduced legal issues: Not all instances of noncompliance come with the same caliber of consequences. However, they typically all come with some sort of penalty, whether it is a warning for not posting an employment poster in a common office space or a lawsuit for failing to pay taxes. By complying with the applicable laws and regulations, companies reduce their risks of monetary fines, lawsuits, and even business closure.
Better business operations: While legal obligations may seem tedious and burdensome, they exist for a reason – to introduce internal safeguards and promote stronger company operations. Laws that promote data security and protection, for example, help maintain confidentiality, prevent financial loss, and avoid malware intrusion.
Improved employee and customer retention: By meeting legal obligations, companies foster a protected, safe, and professional business environment for both employees and customers. Companies can even promote their compliance in their mission statement, on their website, and in their marketing materials. Employees and customers are, as a result, much more likely to interact with a company that supports legal compliance without compromises to their security and privacy.
Compliance has become a focal point for all companies around the world, especially as globalization continues to increase exposure to multiple regulatory regimes and jurisdictions. Maintaining regulatory compliance is an area of expansive risk, and firms face various challenges in effectively meeting all their compliance needs on a regular basis.
Many companies struggle to fully understand their legal obligations, continuing to use unorganized and non-compliant business processes and stand unprepared for audits from unexpected quarters. More and more, companies are turning to robotic process automation (RPA) to overcome such challenges and to help them improve their levels of compliance.
RPA can be an important tool to build more robust and effective compliance programs. Between a reduced volume of legal issues, better retention of employees and customers, and improved business operations, RPA can help in many ways:
Improved oversight: RPA allows businesses to take control of executing their own operational processes internally and is becoming 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.
Higher levels of compliance: Once a process is established as an automated workflow with RPA, 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. This means that RPA allows companies to establish unparalleled levels of process accuracy, especially compared to the work that can be done by human employees. Consequently, companies can better maintain high levels of compliance of all business processes.
Increased auditability: While they do not necessarily occur on a regular basis, compliance audits can occur anytime. Because robots save their—and their humans’—actions into an activity log, companies are better prepared with an audit trail that provides a 100 percent flawless recording of which process were executed and how, when exceptions were generated, and the ways in which employees intervened to deal with issues.
Reduced sampling bias and missed variances: The core problem with audits is that they have to rely on a statistically valid sample of the total population because, up until now, there were simply not enough resources to audit every action taken. With RPA, the same logging that increases auditability—in many cases to 100 percent of actions taken—reduces the need for sampling. As a result, not only are bias errors introduced from a limited sample, but the audit process itself can now catch non-compliant actions that would have been missed by auditors reviewing only a limited sample.
Robots and people together are synergistic and can accomplish more combined than either could alone. Though each on their own are able to contribute to the improvement of business processes and optimization of regulatory compliance, the strategic combination of both allows a higher quality of manual work, as well as creative, cognitive work.
RPA excels at automating the mundane, repetitive, yet critical tasks needed for the law and business compliance to function. People are—and will continue to be—uniquely qualified for the strategic, creative, and cognitive work, which is often more interesting and fulfilling to them anyway.
Together, legal professionals augmented with RPA can improve legal outcomes, improve regulatory compliance, and deliver the innovation that drives the improved operational outcomes needed to succeed.
Discover how to create a more effective legal department with RPA in our latest legal white paper.