What is regulatory compliance?
Regulatory Compliance is when businesses comply with national, state, and international laws or regulations relating to operations.
In India, compliance control is done at all three levels i.e. Central, State, and District. India is turning to central regulation, especially of foreign financial and financial institutions. Compliance rules vary depending on the part of the industry above the mix of areas. Many regulations come in the following broad categories: economic governance, public interest management, and environmental governance. India has also been characterized by poor adherence- reports suggest that about 65% of companies are fully compliant.
Regardless of the industry or the size of the company, all businesses must adhere to certain rules and regulations as part of their operations. Regulatory compliance deals with a set of guidelines that the law requires organizations to follow.
Regulatory Compliance with the law also relates to certain industries. For example, some of the standards defined in the food industry focus on the whole supply chain to ensure product safety. This will vary from the requirements of the financial services industry, some of which focus on how to handle sensitive data and online security.
Simply put, regulatory compliance is when a business follows district, state, central, and international laws and regulations that apply to its operations. It may vary depending on the industry and the type of business.
Regulatory compliance (adherence to government regulations) differs from other aspects of a company’s compliance such as compliance with internal policies and regulations. While both are important to ensure integrity, security, and good business ethics, it helps to understand the difference.
Regulatory compliance with the law involves following the rules of law set by district, state, central or international government. Conversely, compliance with company policies and procedures involves adhering to the internal requirements set by the business. Both, however, help to drive accountability at work.
Constantly changing regulatory environment
As the regulatory environment changes constantly, the intended compliance is constant. You may find that once you have achieved complete obedience, something changes, and you need to adjust your approach in order to remain obedient. Your business needs to be flexible in some way, putting your business at risk. This is also what makes it so difficult.
Failure to comply!
If your business fails to comply, you are opening yourself up for possible litigation and financial liability. Compliance helps you protect the resources and reputation of your business.
Compliance lays the foundation on which to build your company's reputation. Sometimes, all that is needed is a single step to disobey and break the trust that took years to build. By not following compliance rules, you may even run the risk of losing access to certain segments of your customer base.
To conclude, regulatory compliance plays a major role in setting up any business or industry. The rules are there for a reason - they help to protect your business, your employees, and your customers. Failure to comply with the law may expose you to further risks. These rules of obedience are not meant to make life very difficult but compliance benefits your company and the people inside and out.