London Governance & Compliance Academy

Technology and Compliance Monitoring: Four Benefits and Four Challenges

In recent years, technology has become an increasingly important tool for organisations which need to ensure compliance with regulations and laws. This is especially true as businesses are required to adhere to an ever wider range of rules, that can be difficult to keep track of. By using technology-based solutions, companies can monitor their compliance more effectively and efficiently than ever before. This article will discuss four benefits that technology offers, whilst also recognising that these technologies can also present some challenges when it comes to compliance monitoring.


One major advantage of using technology for compliance monitoring is its ability to automate processes. Automation allows organisations to streamline their operations by automating tasks such as data collection, analysis, reporting and auditing which would otherwise take up valuable time and resources if done manually. Automated systems also reduce human error by ensuring accuracy throughout all stages of the process, which helps minimise risk associated with non-compliance issues. Additionally, automated systems provide real-time updates on changes in legislation or regulation, so that companies can stay ahead of any potential risks they may face due to non-compliance issues.


All this being said, there are some possible disadvantages of using automation when managing compliance. Firstly, there are cost issues. Automation can be expensive to implement and maintain, especially for small businesses. There are also security risks, as automated systems can be vulnerable to cyber-attacks and data breaches, which could lead to serious financial losses or reputational damage if sensitive information is compromised. Thirdly, it is fair to say that some systems are rigid and inflexible, making it difficult for organisations to quickly adapt their processes to new regulations or requirements. Finally, as with all systems, automated compliance management still relies on humans inputting accurate data into the system, and any errors made by these individuals could result in incorrect reporting or non-compliance with regulations.


Another benefit offered by technological solutions is improved visibility into organisational activities related to compliance matters. With access control features built into many software applications, managers have greater oversight over access to sensitive information related to regulatory requirements or other areas where there could be potential risks associated with non-compliance issues. This increased visibility also makes it easier for organisations to identify any gaps in their current practices so they can make adjustments accordingly before any problems arise from not meeting certain standards or requirements.


However, there are possible drawbacks inherent in the use of such access control features, when it comes to monitoring compliance. Access control systems can be complex and require a lot of time and effort to set up properly. This can lead to increased costs for implementation and maintenance, as well as potential security risks if not done correctly. Another potential drawback is that they often lack the ability to provide detailed information about user activities within an application or system, making it difficult for administrators to monitor compliance with policies or regulations. One final issue is that where multiple applications are used within an organisation, access control systems may not be able to enforce consistent policies across all of them. This could potentially lead to non-compliance issues going unnoticed.


A third benefit provided by technological solutions is enhanced data security measures which help protect confidential information from unauthorised access or misuse, while still allowing authorised personnel access when needed. Data encryption technologies are often used alongside authentication protocols such as two factor authentication (2FA) which adds an extra layer of protection against malicious actors attempting to gain unauthorised entry into a system. These measures help ensure that only those individuals who have been granted permission have access to the sensitive information stored within a company’s network. This reduces the chances of potential breaches caused by negligence or intentional actions taken without authorisation.


Whilst this list of benefits may appear to make the use of enhanced data security measures extremely valuable, we should be aware that there are some inherent challenges. Firstly, such security measures can be expensive to implement and maintain, as they require additional hardware and software investments. Additionally, they can be complex to set up and manage, requiring a high level of technical expertise from IT personnel or consultants. By introducing more stringent access controls, it may also become more difficult for authorised personnel to access the information they need in a timely manner. It is also clear that, despite their best efforts, organisations may still find themselves vulnerable to cyber-attacks if their systems are not properly configured or maintained over time.


Finally, another key benefit offered through technological solutions is improved scalability when it comes to managing large amounts of data-related regulatory requirements across multiple locations. By leveraging cloud computing services, companies are able to scale up quickly without having to invest heavily in the upfront capital costs normally associated with setting up the physical infrastructure necessary to store the vast amounts of data generated during day-to-day operations. Furthermore, cloud-based services allow businesses to more easily integrate new technologies into existing systems, making them more efficient overall while helping maintain high levels security at the same time.


With this improved scalability, however, come a number of potential drawbacks in terms of compliance. Cloud computing services may not be as secure as on-premise solutions, leaving organisations vulnerable to data breaches and other security threats. The cost of cloud computing services can also quickly add up if an organisation is not careful with their usage and budgeting. Many people have also pointed out that organisations may have less control over the data stored in the cloud than they would with an on-premise solution, making it difficult to ensure compliance with regulations or industry standards. It is also important to point out that cloud outages can occur due to a variety of factors such as power outages or network congestion, which could lead to disruptions in service and potentially non-compliance issues if critical processes are affected.


There are clearly numerous advantages offered by the use of technology when it comes to complying with regulations and laws. It is important to note, though, that each of the four advantages outlined here also has within it the potential for misuse and for generating an over-reliance on technology when it is always personnel who will carry the responsibility for compliance. Effective strategic management and appropriate investment in resources and in staff training will always need to be prominent if compliance is to benefit from technology rather than suffer from its inevitable challenges.