Regulatory compliance

Regulatory compliance is the process of complying with applicable laws, regulations, policies and procedures, standards, and the other rules issued by governments and regulatory bodies like FINRA, SEC, FDA, NERC, Financial Conduct Authority (FCA), etc.

Depending on the industry and jurisdiction, regulations vary significantly. Large organizations with a global footprint need to comply with pertinent laws and regulations in all the countries they operate in, and from. Some industries, such as financial services, information technology (IT), and healthcare, face numerous and often complex regulations and compliance frameworks due to their impact on the economy, business, and health infrastructure respectively. Additionally, many of these industries are also at significant risk of cyber breaches, due to the increasingly complex and evolving cyberattack surface.

As a business grows and expands, the regulations it is subjected to also increase in scale and volume, often becoming complex due to overlapping jurisdictions of multiple authorities. This requires an organization to implement the right measures, policies, and processes to ensure compliance.

This page provides a comprehensive overview of regulatory compliance and its importance, the benefits of regulatory compliance, the consequences of non-compliance, and the best practices to follow to achieve regulatory compliance.

Regulatory Compliance Important
Regulatory compliance is important to uphold the integrity of business processes, protecting public interest as well as stakeholder interest. It ensures that businesses operate fairly and ethically. When businesses are open and transparent about their regulatory compliance mechanisms, trust and goodwill among clients and business partners increase. This can, over time, improve brand perception and increase the overall profitability of the organization.

With good regulation, consumers are protected from harmful and fraudulent actions taken by business entities such as predatory mortgage lending, which led to the subprime mortgage crisis of 2008. At the same time, directors and managers of businesses that follow regulatory compliance can steer clear of criminal liability and premature career termination due to actions that they may be held directly responsible for.