Streamline the Compliance Program with Workflow Automation

Luke Walker
May 1, 2023
Updated:
10
minutes

Introduction

Regulatory compliance is about a lot more than avoiding fines. 

In today’s hyper-trust digital business landscape, non-compliance can result in numerous consequences:  irreversible damage to a company’s reputation, loss of consumer trust, revocation of compliance standard approval, and many other penalties that can seriously impact a company's position in a competitive marketplace. More than that, non-compliance has a directly negative impact on employee retention, costing companies valuable talent and workforce morale.

Thankfully, no-code/low-code automation offers an efficient and inexpensive solution for businesses looking to tick all the compliance boxes without burning cash and human resources on it. By automating compliance operations workflows, companies can orchestrate their compliance processes in a more “hands-off” and streamlined way, saving time and reducing human errors – regardless of the industry or regulatory framework. 

In this article, we will explore the significant impact of workflow automation on compliance programs, and how it can seriously improve the way that businesses manage their regulatory obligations

What is a compliance program?

Compliance programs and compliance officers play central roles in helping businesses operate both ethically and within the bounds of applicable laws and regulations.

The compliance program is a system of policies, procedures, and training programs designed to promote compliance with applicable laws and regulations. It includes 1.) identifying and understanding the laws and regulations that apply to the business, 2.) developing policies and procedures to ensure compliance, and 3). regularly reviewing and updating the program to ensure it remains up-to-date with changes in laws and regulations.

The compliance officer is the individual responsible for overseeing the compliance program and ensuring that the business is operating within legal and ethical boundaries. This may involve conducting audits and assessments to identify areas where the compliance program may need improvement, providing guidance and training to employees on compliance issues, and developing strategies to address potential violations of laws and regulations. They are also principally responsible to their employer for identifying and addressing regulatory risk within the organization.

Together, a strong compliance program and a diligent compliance officer can help businesses avoid legal and reputational risks, operate with integrity and transparency, and maintain the trust of their customers, employees, shareholders and partners. 

What is compliance workflow automation?

Compliance Workflow Automation refers to the process of automating and streamlining the various tasks and activities prescribed by a company’s compliance program. It utilizes workflow automation technology to make the process more efficient, consistent, and transparent, ultimately reducing the orchestration burden on compliance operations people in the organization, and minimizing the risk of human error. Let’s unpack this a bit. 

There are several key components to compliance workflow automation:

  1. Data collection: Workflow systems gather relevant data in multiple formats and from multiple sources – for example, employee training records, financial transactions, and other internal and external databases – to ensure that compliance teams (and auditors) have accurate and up-to-date information. 
  2. Risk assessment: An automated workflow can use collected data to identify potential risks and red flags. Know Your Customer (KYC), for example, is an example of compliance-required risk assessment facing every financial service organization.  In KYC automation, for example, predefined conditions in the workflow can trigger investigative actions or escalate cases when certain risk markers are indicated. This helps compliance teams prioritize their efforts and focus on the most pressing issues.
  3. Task assignment and tracking: Compliance workflow automation can help create and assign tasks to the appropriate team members, as well as monitor their progress. This ensures that tasks are completed in a timely manner and provides visibility into the entire process.
  4. Reporting and analytics: Automated systems can generate reports and analyze data to provide insights into compliance performance. This helps organizations identify trends, make informed decisions, and improve their overall compliance strategy.
  5. Continuous improvement: As compliance people observe workflow trends and learn from historical data, they can identify areas for process improvements and refinements, and implement them directly, ensuring that the compliance workflow remains effective.

The complexity of compliance programs, the total coordination required and the multi-step, multi-stakeholder involvement, places it firmly on the list of highest opportunity workflows for automation.

Now that we’ve established the aims, objectives, and components of compliance workflow automation, let’s take a closer look at what outcomes a company can expect from it, in order to shed light on potential ROI.

What are the Benefits of Compliance Workflow Automation?

Embracing workflow automation can be a game-changer in helping an organization stay on top of the ever-changing compliance landscape. The impact can be multi-faceted, offering organizations a range of benefits:

Streamlining Compliance Processes

Enhanced Efficiency and Reduced Errors

Workflow automation is prime for organizations aiming to streamline compliance. By automating repetitive tasks, organizations can eliminate the manual grunt work of compliance processes, reducing human errors, and increasing overall efficiency. This also translates to increased confidence in the organization's compliance program.

For financial service companies, this aspect is crucial to get right, as these organizations are often dealing with multiple thousands of compliance-relevant transactions every day.  

Improved Collaboration and Communication

Effective communication and collaboration between various departments and stakeholders are essential for successful compliance management. Workflow automation enables organizations to establish clear communication channels, reduce silos, and ensure that all parties are informed of their responsibilities and have access to the necessary information to perform compliance tasks. 

Workflows can also automate the notification of tasks and deadlines, as well as the flagging of overdue tasks within the process itself.

Interdepartmental communication is a key element to get right in an automated compliance workflow

Comprehensive Compliance Management

Integration with Existing Systems

One of the significant advantages of workflow automation is its ability to integrate with existing systems and software used within an organization. Seamless integration ensures that documentation is managed automatically in a compliant and audit-ready format, and it reduces the need for manual data entry.

Real-time Monitoring and Reporting

Workflow automation provides organizations with real-time monitoring and reporting capabilities. This allows for continuous assessment of the compliance program's adoption and effectiveness. Real-time data ensures that compliance officers are equipped with the most up-to-date information about the compliance status quo in their organization, enabling them to make informed decisions and respond quickly to compliance inquiries or audits.

Compliance workflows (in this case, KYC) running in real-time. Note the possibility to assign priority and deadlines to each unique instance.

Empowering Compliance Officers with Data

Data-informed Decision Making

Workflow automation empowers compliance officers with analytics tools, providing them with valuable insights into the organization's compliance performance. These insights can be broken down into a number of reporting dimensions, including team-level compliance, organization-wide compliance, or even the performance metrics around a singular task or step of the compliance process.

Risk Mitigation

Conditions can be easily defined and configured in the workflow automation solution to help alert organizations to potential risks and areas of non-compliance before they become problematic. These too can be defined at the process level, team level, or even the singular step level.

Assigning alerts and flags to compliance cases is useful to pinpoint risk exposure before it becomes an actual regulatory concern.

Enhancing Compliance Training and Education

Customized Training Programs

Workflow automation enables organizations to develop customized compliance training programs tailored to the specific needs of their employees. Thes that all team members are equipped with the necessary knowledge and skills to adhere to the organization's compliance standards and contribute to a culture of compliance.

Tracking and Assessing Training Progress

In addition to providing customized training programs, workflow automation allows organizations to track and assess employee progress throughout their training journey. This enables organizations to identify areas where additional support or resources may be required and ensures that all employees are effectively trained in compliance-related matters 

Each step of the employee compliance can be prescribed, automated, and tracked. The individual elements of the training are wholly customizable, based on your regulatory requirements.

Now that we’ve made a case for compliance automation, let’s have a look at how companies can get started.

Best practices for implementing compliance workflow automation

Building compliance workflow automation from scratch might seem daunting at first, but by following the steps outlined below you can ensure a smoother transition and make certain that all of your regulatory responsibilities are met. 

Above all, it’s critical to find and implement a solution that works for your organization, keeping in mind your unique company culture, the specific regulatory requirements for your industry and jurisdiction, and the timing.

  1. Assess your current compliance processes: Before implementing any automation, it's important to thoroughly evaluate your existing compliance processes. Identify areas where automation can bring the most value, such as repetitive tasks, manual data entry, coordination steps, 3rd party checks, risk calculations, and/or approvals and prioritize them accordingly. (Check out this step-by-step guide on scoping for workflow automation
  2. Set clear objectives and KPIs: Clearly define your goals and objectives for automating the compliance process, and establish KPIs (or OKRs) to measure success. This will help you track progress, maintain focus, and ensure that the automation initiative aligns with your organization's overall compliance strategy.
  3. Choose the right technology: Look into automation platforms to find the one that best meets your organization's needs. Look for these 5 features in a workflow solution. It's crucial to select a solution that can grow with your organization and adapt to changing compliance requirements. 
  4. Involve stakeholders and create a cross-functional team: Make sure that all relevant stakeholders, including compliance, legal, IT, and business teams, are involved in the planning and implementation process. This promotes collaboration, ensures that everyone's needs are addressed, and helps avoid potential unforeseen roadblocks. Above all, empathetic and inclusive leadership is required.
  5. Develop a phased implementation plan: Rather than trying to automate everything at once, start with a pilot that focuses on a specific process or area of compliance. This allows you to evaluate the effectiveness of the automation, identify potential issues, and refine your approach before expanding to other areas. You’ll also get a quick win that you can use to champion broader rollout in the organization.
  6. Provide adequate training and support: Ensure that your team members are well-equipped to use the new automation tools and understand the benefits. Offer training sessions as part of an automated employee onboarding, create user guides, and establish a support system to address any questions or concerns.
  7. Monitor and measure success: Regularly assess the effectiveness of your compliance workflow automation by analyzing the KPIs (or OKRs) you established earlier. Gather feedback from your team, and make any necessary adjustments to optimize the system.
  8. Continuously improve: Compliance requirements and technologies are constantly evolving. Stay informed about new developments, and be prepared to adapt and refine your automation strategy as needed.

Remember, implementing workflow automation is an ongoing process that requires a little time and commitment upfront, but – on the flipside – is infinitely flexible, and you’ll be able to remodel and optimize your process without limit. 

Conclusion

Wrapping up, compliance workflow automation is a powerful approach that can seriously improve the way organizations manage their regulatory and legal requirements. The benefits to the organization are numerous, and the costs associated with implementation are minimal.

With a clear understanding of your regulatory responsibilities as an organization and compliance ownership within your team, implementation using the steps above will go smoothly, and you’ll likely see results immediately. 

FAQs

What types of organizations can benefit from compliance workflow automation?

Organizations of all sizes and across various industries can benefit from compliance workflow automation. This includes financial institutions, healthcare providers, manufacturing companies, and technology firms, among others. Any organization that must adhere to regulatory and legal requirements can potentially benefit from implementing this technology.

Is compliance workflow automation expensive to implement?

The cost of implementing compliance workflow automation varies depending on the size of your organization, and the specific technology solution you choose. While there may be upfront costs, the long-term benefits of increased efficiency, reduced risk, and improved compliance management generally outweigh the initial investment.

How secure is compliance workflow automation?

The security of compliance workflow automation depends on the specific technology solution and vendor you choose. It's essential to select a platform that adheres to industry-standard security practices, offers encryption, and complies with relevant data privacy regulations.

Will compliance workflow automation replace compliance professionals?

While automation can streamline many tasks and processes, it does not replace the need for skilled compliance professionals. Instead, it allows them to focus on more strategic activities, such as interpreting regulations, developing policies, and managing relationships with regulators. The human element remains critical in ensuring an effective compliance strategy.

How can I ensure that my organization stays up-to-date with changing compliance requirements?

Staying informed about new developments in your industry and maintaining a proactive approach to compliance are essential. Regularly review your compliance processes, invest in ongoing training for your team, and be prepared to adapt your automation strategy as needed to accommodate changing requirements.

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About the author
Luke Walker is the Product Marketing Manager at Next Matter. He is a longtime process hacker, and writes about marketing, business digitization, leadership, and work-life balance. When he's not at work, you can find him listening to records or climbing rocks.

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