The Future of Compliance – What Will the New Tools Look Like?
If you look back five years and ask – how much has changed in the compliance world in the last five years? – the answer is remarkable. I can easily make the argument that the biggest change in corporate governance over the last five years has not been executive pay reform, or any of the high-fluting issues which law firms trumpet, but the increased focus on compliance, and the evolving role of Chief Compliance Officers.
When the government aggressively enforces the law across all industries, the business community has no other choice – focus on compliance and reduce risks. It does not take a rocket scientist to figure this out.
Over the last five years, the compliance industry has been at the forefront of developing new tools, techniques and strategies to promote organizational compliance.
What will compliance look like in five more years? What new tools will be developed?
The crystal ball looks fairly clear for the next five years. The trends are pretty easy to see – I call it the confluence of technology and proactive strategies. What do I mean?
The new era of compliance will develop new and more reliable tools for monitoring compliance program performance. Right now, companies are implementing ongoing assessment tools such as proactive audits, transaction testing techniques, surveys and questionnaires. All of these tools are being used and refined.
Real-time assessments and measurements is the innovative area being developed by compliance professionals. New technologies for capturing data, analyzing the data and monitoring compliance risks on a real-time basis will supplant some of the existing techniques for monitoring compliance program performance.
The Justice Department has been requiring companies to conduct proactive, high-risk audits of their compliance programs. While this looks like a new and innovative requirement, five years from now we will look back on it in the same way we look back on compliance strategies in 2007.
Some companies already are focused on real-time measurement of compliance performance. Companies are using compliance “dashboards” to focus on compliance priorities and measure performance. As data gathering technologies increase (e.g. I-pads carried by sales representatives used to collect real time reports on risky interactions), companies will design real-time tools to measure and respond to changes in risks.
The future of compliance is bright. With the rise of compliance as a corporate priority, the compliance industry will respond with new and innovative tools. Companies will eventually have the capability to capture real-time data on risky interactions and respond to risk before they develop into a culture of non-compliance.
As the pace of innovation increases, companies which fail to recognize this trend could suffer real consequences. Can you imagine how a company with a “paper” compliance program will look in five years in comparison to companies which have embraced new technologies to monitor and measure their programs? The gulf between compliant and non-complaint companies will be significant.