Importance Of Compliance Certifications For Your Business
It’s easy to think of regulatory compliance as a barrier to business growth. You might feel there are too many complex rules to follow and too many costs to bear. However, it would be harsh to judge compliance as an obstacle that hinders progress. Although it has its limitations, its benefits outweigh the costs.
Understanding Regulatory Compliance
Every organization must abide by some rules, standards, and guidelines. These rules may be issued by a government agency, a specific governing body, or a certifying entity. The regulations vary depending on the industry you operate in and the nature of your business. Some of the top compliance regulations are:
Sarbanes–Oxley Act. After witnessing some fraudulent financial reporting by major companies, the US Congress passed SOC 2 to protect investors from such dishonest practices. The act requires public-traded entities to create and enforce controls for financial reporting, to be more responsible and transparent when creating financial documentation, and to submit documentation that proves compliance.
PCI DSS. This is a standard that applies to all entities that handle consumer credit card data. Whether you process, store, or transmit cardholder information, you are required to follow a set of rules that ensure the customer data is protected. The requirements range from using firewalls, encrypting data, restricting access to data to developing and maintaining a new information security policy.
SOC 2. This type of compliance applies to all service providers who handle customer information. To earn a certification, you must demonstrate that you have security systems in place to protect that information and to keep it confidential and unaltered. You should also make sure you adhere to your organization’s data privacy agreement.
How Does Regulatory Compliance Benefit Your Business
Customer Trust and Loyalty
When customers know that you are compliant with the various regulations available, they are more likely to trust your brand. Modern consumers are highly concerned about how their information is collected, stored, and used; therefore, they will want to know that you are using that data in a way that does not violate their privacy. If you can prove that you are compliant with the various information security requirements, then your customers will stick with you. A compliance certification can go a long way to build this trust.
In this digital world, no one wants to take risks. This includes consumers, investors, and financiers. If your business hasn’t taken steps to avoid or manage risks, then you will have a difficult time marketing your brand. Complying with the various requirements in your industry can help you have an advantage over your competitors. Displaying your compliance certifications alongside your credentials will make you the perfect candidate. Furthermore, complying with some security requirements will secure your systems and protect your valuable trade secrets from being stolen by your business rivals.
Improved Productivity in the Company
Getting a compliance certification can help your business to operate at peak performance. These set of rules are not only meant to protect customers, but also your business interests. The vast requirements in a compliance program allow you to identify weaknesses in your processes and eliminate counterproductive policies. When you aren’t compliant, you are more likely to adopt the wrong approach to try and eliminate risks. This can lead to wastage of time, money, and manpower. Compliance strengthens your controls, frees up resources, and allows you to focus your resources on achieving your business goals.
Creating a Compliant Culture
Earning a compliance certification can help you establish a positive internal culture. Most compliance programs have sections that cover employee training and education. When your employees are educated on different risks that your company faces, they will be aware of these threats and have the skills to respond appropriately. Certification ensures your employees are more involved and responsible in the compliance process.
Avoidance of Legal Problems
There are many compliance regulations and laws that carry penalties. Some compliance errors may result in simple warnings, while others can lead to damaging sanctions. Some penalties include monetary fines, jail time, blacklisting, and even closure of a business. Acquiring different compliance certification reduces the probability of encountering legal problems. If you have certifications that help you secure your customer’s data, maintain a conducive work environment, uphold transparent financial practices, and adhere to the industry code of ethics, you will have little to worry about.
Better Public Relations
There is nothing worse than your business appearing in the news for the wrong reasons. If you are caught flouting compliance rules and are taken to court, your brand’s reputation will undoubtedly take a hit. The public will have a negative image of your brand, sales may dip, investors may pull out, and banks may refuse to lend you in the future. Compliance certifications highlight your company’s commitment to different issues, and this can help you maintain a positive brand image.
Regulatory compliance certifications can help you secure the future of your business while protecting the interests of your staff, investors, customers, and other shareholders. If you haven’t been taking compliance seriously, now is the time to update your policies and earn certifications.