Importance of technology-backed procedure to manage a compliance program

The Indian economy is the 5th largest in the world by GDP and 3rd largest by PPP (Purchasing Power Parity) and is expected to grow at 7% in FY24. This puts it on track to reach $10 trillion by 2030. This growth will see businesses grow and new companies come into existence. This puts the spotlight on the ease of doing business and the business laws of the country. As such, it is important for enterprises to invigorate compliance management and introduce technology-backed transformation.

The regulatory environment in India is complex and ever-changing. Employers are confronted with an intricate web of compliances that require deep expertise, timely action and effective coordination. The regulatory environment consists of 1,536 acts, 69,233 compliances, and 6,618 annual filings. This regulatory framework is also highly fluid with over 10 regulatory updates every day which resulted in 4,880 regulatory updates in 2022. Failure to comply with these requirements can result in penalties, legal repercussions, and serious harm to the reputation of the company. 

In India, compliances and paperwork go hand in hand. Documents such as applications, acknowledgements, forms, receipts, licences and registers, among many others, lie at the heart of compliance. Unfortunately, a major chunk of compliance documentation in the country is still paper-based with little or no digital functionality. Given the large quantum of paperwork involved, manual management of documentation is difficult for employers.

Unfortunately, ad-hoc, manual, and paper-based processes form the basis of compliance management in most businesses. This leads to inadvertent delays, defaults and lapses creating financial and reputational risks. Even minor non-compliance can create a perception of weak corporate governance and affect share prices. As the organisation grows, compliance obligations increase exponentially. The switch to digital compliance management can help employers achieve accurate, transparent and timely compliance. Digital compliance software incorporates features such as dynamic workflows, automated alerts and reminders, timely reports, periodic updates and paperless repositories, among others, to facilitate ease of compliance.

When the entire compliance lifecycle in an organisation is people-dependent, there is a significant margin for defaults, lapses and delays. The cost of poor compliance is simply too high as governments push for greater corporate accountability through stringent oversight and hefty penalties.

Employers can now handle their specific compliance demands with smart, efficient, and productive digital compliance management systems that harness the power of the web, mobile, cloud, and analytics. They also allow organisations to transition from ‘reactive’ to ‘dynamic’ compliance that is in sync with the changing regulatory landscape. As a result, an increasing number of organisations across the country are aggressively digitising their compliance processes.

The new technology-backed compliance management solutions provide end-to-end automation, including tracking and management, data processing, statutory filing preparation, digital record maintenance, and automatic flagging of potential non-compliance. These technologies enable companies to digitise their complete data and process flow. They can detect defaults and delays automatically. Furthermore, these solutions include regulatory updates to assure fast and precise compliance. In accordance with the appropriate norms and regulations, they provide centralised document upload, document production, approval, and preservation capabilities.

The high cost of non-compliance has made entrepreneurs wary of ending up on the wrong side of the law, whether inadvertently or otherwise. Boards and CXOs are also becoming increasingly attentive and demanding in their approach towards regulatory compliance. Given the severe ramifications of non-compliance, businesses are now actively seeking solutions that enable them to have better visibility and control over their compliance functions. They are fast shunning the ad hoc, manual, anecdotal and people-driven processes for more seamless, digital, traceable and event-based compliance management. 

Not only does it enable better visibility and control over compliance functions but makes it increasingly possible for entrepreneurs to stay ahead of the curve. With unique features such as customised checklists, real-time regulatory updates, automated alerts and reminders, and periodic analytics, digital compliance software is fast replacing traditional ad-hoc and manual processes. 

Going digital allows an entrepreneur to ensure compliance without any lapses, delays and defaults. Smart and automated compliance management can enable enterprises to constantly stay alert, aware, and ahead of the curve. Businesses need to adopt smart and automated compliance solutions that provide enhanced control and visibility of compliance functions. 



Views expressed above are the author’s own.


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