The uncertainties posed by the pandemic has led organizations to rethink their business models. Global compliance, legal and ethics teams are at the crossroads of a transformative journey today as they strive to balance between managing a rapidly changing regulatory environment and stabilizing costs. These functions are expected to transition into more value-based and strategic roles, while maintaining agility, efficiency and addressing the escalating risk of fraud, non-compliance and misconduct.
Rising challenges for compliance and ethics teams
Global organizations are facing intense market, regulatory, and macroeconomic constraints. The focus on operational efficiency, quality and cost has increased with many companies grappling with diminishing revenue and capital. Compliance, legal and ethics functions are not completely resistant to rapidly increasing costs and tend to opt for implementing manual reviews and traditional approach for controls. This can be an onerous exercise, leaving little time to address other important areas or even keep up with industry trends.
Additionally, many organizations can have processes that may buckle under the pressure of having under-invested legacy systems as they migrate to universally applicable systems. New advancements such as machine learning and artificial intelligence have the ability to transform compliance, risk and integrity frameworks, but building in-house capabilities can be slow and unviable, with costs being a deterrent. Another challenge is the availability of resources present locally with the appropriate skillsets and subject matter expertise. Companies would have typically had to retain large teams to manage the entire gamut of compliance, legal and ethics requirements – from internal investigations, to running data analytics to spot suspicious patterns, document reviews in litigation scenarios and several other processes. Their roles and responsibilities are widening in scope and internal control testing would be required to cover all aspects of compliance and ethics within an organization.
The business environment in a post pandemic world will get increasingly complex. Dealing with the trials of today as well as the roadblocks of tomorrow can be a formidable task.