Compliance Challenges and Solutions for Hawaii Businesses

Compliance Challenges and Solutions for Hawaii Businesses

Compliance is a critical consideration for rapidly expanding businesses, which can sometimes be overlooked amid challenges.  As these companies grow, the importance of refining their compliance and risk management efforts cannot be overstated, especially in a time marked by geopolitical tensions and economic unpredictability.

While technological advancements have greatly improved Governance, risk, and Compliance (GRC) management, challenges in compliance still exist. Today’s business environment requires adherence to numerous regulations covering areas such as taxation, commerce, energy, the environment, cybersecurity, and workplace safety. Meeting these regulatory demands incurs significant costs, which, if not managed properly, could hinder growth.

This article aims to help rapidly growing companies navigate the complexity of compliance. It highlights common compliance hurdles and provides practical solutions to overcome them, fostering an environment conducive to sustainable growth and resilience against unforeseen challenges.

 

What are the compliance challenges fast-growing companies face?

Rapidly expanding companies frequently face numerous compliance challenges that require careful attention and strategic planning. These challenges arise from the swift growth and changing nature of their operations, resulting in complexities in complying with various regulatory frameworks and industry standards that govern areas such as financial reporting, data protection, and workplace safety.

Compliance challenges arise from the swift growth and changing nature of operations

 

1. Adoption of Emerging Technologies

Today’s business environment presents a complex risk landscape, demanding modern approaches like Robotic Process Automation (RPA) and machine learning to meet regulatory requirements. A robust Governance, Risk, and Compliance (GRC) tool is essential for accessing compliance-related data, controls, and testing. It should include advanced analytics, data integration, automated processes, and cutting-edge technology. Big Data plays a crucial role in compliance technology, enabling data analysis and automated security measures. By harnessing Big Data, organizations can quickly identify risks, offer guidance, and proactively address threats in automated systems.

Solution:

  • Ensure your risk management strategy is clear, efficient, and adaptable, keeping your compliance team informed of legislative and technological changes.
  • Use a proactive regulatory change management platform for horizon scanning and alerts on anticipated legislation changes.
  • Employ Regulatory Artificial Intelligence to identify optimal risk reduction methods and speed up recovery, leveraging the advanced analytical capabilities of compliance technology solutions.
  • Establish an accurate, secure, and easily accessible system of records.

 

2. Managing multiple jurisdictions and laws

Effectively managing compliance across multiple jurisdictions and legal frameworks requires a comprehensive understanding of the laws and a strategic approach. Each jurisdiction has its own set of regulations and reporting requirements, such as data privacy laws and financial reporting standards, making compliance management complex and time-consuming. It’s essential to have a deep understanding of regulatory requirements in each location and the ability to ensure compliance across all jurisdictions.

Solution:

  • Establish a robust compliance program capable of handling multiple jurisdictions and laws. Building a team of compliance professionals familiar with each jurisdiction’s legislation is crucial. These experts can manage compliance and ensure the company’s operations comply with local laws.
  • Utilize technology for multijurisdictional compliance. Compliance management software centralizes data, automates operations, and provides real-time compliance insights. This technology simplifies compliance, reduces manual work, and ensures consistency across regions.

 

3. Managing compliance costs

Cost constraints are a significant challenge for many businesses when it comes to compliance. Approaching compliance management from a departmental perspective rather than an enterprise-wide view can lead to compliance costs negatively impacting financial performance. This siloed approach results in inefficiencies and higher expenses.

Solution:

  • Foster collaboration among team members. It’s crucial for all functions to collaborate rather than operate independently to meet compliance requirements.
  • Implement a comprehensive approach that includes risk management, compliance, and audit functions to prevent compliance issues and reduce costs.
  • Automate risk and compliance management to realize cost savings, optimize resources, and increase efficiency. This approach eliminates the need for manual compliance risk management, resulting in significant cost, resource, and time savings. Exploring automation tools like Regulatory Technology (RegTech) solutions could further streamline compliance processes.

Cost constraints are a significant challenge for many businesses when it comes to compliance

 

4. Risk and Governance

The compliance and risk function faces increased uncertainty due to economic, social, geopolitical, and environmental issues. This instability makes it challenging to prevent economic crimes such as fraud. As businesses adapt to new circumstances, fraudsters seek to exploit potential security vulnerabilities. Common forms of fraud include cybercrime, third-party risks, money laundering, and misuse of assets, often resulting in significant financial losses and risks to community cohesion and well-being.

Solution:

  • Implement a zero-trust security approach that requires authentication, authorization, and validation for each digital interaction.
  • Conduct risk-based due diligence at the beginning of a business partnership and regularly throughout its duration.
  • Invest in employee training to enhance their ability to identify potential threats such as phishing, ransomware, Distributed Denial-of-Service (DDoS) attacks, and more.
  • Foster a shared responsibility for cybersecurity across the organization and prioritize cyber and digital resilience to prepare for new security mandates by authorities.

 

5. Responding to potential violations or non-compliance incidents

Rapidly expanding companies often face the critical challenge of addressing potential violations or incidents of non-compliance. Such incidents can lead to financial penalties, reputational damage, and legal action. They can also erode trust among stakeholders, including customers, investors, and partners, resulting in missed business opportunities and harm to the company’s brand reputation. Additionally, non-compliance can lead to stricter regulations and increased regulatory scrutiny, potentially resulting in fines.

Solution:

  • Develop a clear incident response plan to minimize the negative impact on the company’s reputation and finances, demonstrating compliance and appropriate business practices.
  • The incident response plan should outline the steps to follow when an incident occurs, including identifying and resolving the issue, conducting internal investigations, and informing stakeholders. It should also include protocols for reporting incidents to regulatory authorities, as necessary.
  • Provide employees with guidance on how to handle potential violations or non-compliance incidents. This ensures a unified approach to dealing with such situations by establishing clear lines of responsibility. It also promotes a culture of compliance and emphasizes the importance of adhering to regulations and ethical standards.

 

Take Action Now to Secure Your Compliance

Ensure your business is prepared for the compliance challenges ahead. Contact Intech Hawaii today to learn how we can help you with your compliance and foster sustainable growth for your company.