Changing compliance standards can encourage innovation if leaders have a positive mindset.
Businesses must be agile to survive in a fluid market affected by pandemics, elections, climate change, emerging competitors, and developing technology. Additionally, compliance regulations significantly impact business behavior as well. As a result, regulatory compliance has become more critical to business operations in the modern landscape.
We are in the midst of an information revolution. This statement isn’t new. We are still trying to figure out privacy, communication, and the balance of power among companies, governments, and individuals. It is an ongoing process. At the beginning of the Industrial Revolution, many things were managed poorly, which resulted in costly problems that hindered innovation. Slowly, regulations were brought in—not without pushback—to allow as many people as possible to enjoy the benefits of the revolution. We are witnessing the same phenomenon today. Therefore, it is no surprise that in PwC’s 23rd Annual Global CEO Survey, which involved 1,581 chief executives in 83 territories, 36% reported being extremely concerned about overregulation, ranking it the top threat to their organization’s growth prospects. It is only natural that we are seeing this recurring pattern of pushback on industry regulations.
But industry standards and regulatory laws are here to stay, and they are and will continue to transition as societies find a new equilibrium. In the process, businesses need to embrace this transition. Regulatory compliance, however, shouldn’t be considered a secondary cost of doing business so that companies can be complacent with meeting the bare minimum.
Regulations provide a health checklist for businesses to see how well they’re doing and how they can improve.They balance the scales and ensure that technological innovation will continue to be embraced. Unfortunately, some business leaders have yet to connect those dots. The time has come for a major attitude adjustment toward compliance. It’s one of the most fool-proof ways to build customer trust.
Trust takes years to earn but can be lost quickly, so preventing compliance failures is vital. One of the more common ways compliance failures occur is through a lack of readiness for emerging regulatory developments, resulting in penalties and violation fees. Even if your business can afford the hefty fines and penalties associated with non-compliance, can you afford to lose customers when they feel you have inflicted unnecessary risks on them? The answer should be no.
Use Compliance as a Business Advantage
Many executives fear taking risks and despise compliance guidelines because they fear getting in trouble. However, just because you’re adhering to regulations doesn’t mean you can’t innovate and explore ways to enhance your business operations. It’s not easy to recognize how compliance can yield business results when most leaders become on the defensive at the mere thought. However, those who shift their mindset from compliance as a troublesome obligation to an inspiring opportunity will thrive and become even more productive.
Adhering to industry requirements keeps your business out of regulatory crosshairs and media scrutiny, but it’s also an integral part of long-term business success. Harmonizing compliance needs with proactive, innovative business strategies will help organizations improve the customer experience through features and solutions they couldn’t provide before, boosting overall satisfaction.
Regpack, my payments software company, was required (under compliance standards) to add dates to all events and programs offered by organizations using the software. We went through the regular cycle of getting a compliance requirement: we panicked, then hoped it might miraculously go away, and eventually sat down to see how we could implement the required changes. The difference is that we went the extra mile and thought, “How can this benefit the organizations using our software? How can we make it worth their while to be compliant”? We looked for the carrot, not the stick.
The immediate problem was figuring out how to get customers already using our services to make the change needed. We found a way to turn what could have been a business nightmare into an opportunity to add additional functionality to our payments platform.
First, we allowed customers to add dates in bulk painlessly and efficiently. Then we added “Time Conflict Prevention,” where they could customize their project to ensure no one registered to two events simultaneously, as the system will alert them of any overlap. The final feature we created was the Purchase Protection offering. Similar to travel protection, customers could protect their different events, camps, courses, and events even if they could not attend due to illness or a family emergency. This change became an amazing revenue-protection tool for our clients and a revenue-generating tool for us. It was a win-win. All this would not have happened without the external requirement to add dates to offerings.
By changing the perspective of compliance, companies can create new functionalities that their competitors don’t offer. If you only look at regulatory compliance as a burden, you won’t be able to give your customers the services needed to strengthen their loyalty to your business. Proving your ability to protect and support customers’ best interests is more critical than ever.
The responsibility of compliance maintenance doesn’t fall on just one department; it is an enterprise-wide undertaking. Regulatory compliance impacts some roles more than others, but every member manages compliance in some way. To avoid any disconnect between departments, leaders need to ensure a general theme or company culture that guides the actions of all departments. At Regpack, we constantly strive to improve and create additional value for our clients. This mindset allows us to see external requirements as opportunities to enhance the client experience.
Company mindset creates a common path of development. External forces can push that forward. Hence, compliance can move innovation forward by streamlining the development and approval processes, increasing efficiency, and enhancing overall product quality. It can also help the product go to market faster, which creates a competitive advantage for the organizations that can strike this critical balance.
Ultimately, business leaders must remember that compliance is not only a corporate responsibility but also a social responsibility to protect your customers as we are all exploring how to make technological changes benefit all. Instead of approaching regulation standards with resistance, turn lemons into lemonade. Adaptability is crucial for surviving in an unpredictable economy.
Business collaboration, creativity, and efficiency all stem from the same root: compliance. It requires a mindset that turns the “burden” of compliance regulations into strategic advantages. If your business wants to experience continuous growth, you must embrace the opportunities to improve your services for customers so that you can become an industry leader.
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