How Regulatory Compliance Affects Your Business

Businesses are now dealing with more regulations than ever. As the Code of Federal Regulations continues to grow, it’s important to make sure that your business is compliant with all applicable regulations. Especially important are those involving data protection, sharing and storage. In many industries this can be a daunting task that calls for professional assistance.

Regulatory compliance is both an ethical and practical issue for your business. Regulations put in place to protect consumers offer businesses the opportunity to put their ethical culture on display. Most regulations also carry some kind of penalty in the event of a breach. These can range from modest fines to jail time.

In order to guarantee your ability to achieve full regulatory compliance, it’s important to be aware of how regulations change the way your business operates and the consequences of failing to comply.

Consequences of Regulatory Compliance Breaches

The true impact of a compliance breach can be hard to quantify, but the monetary penalties associated with regulatory compliance breaches are a good starting point. Fines are meant to be a deterrent as well as a punishment, and are therefore designed to be able to have a major effect on a business’s bottom line. HIPAA violations carry clear financial penalties in the healthcare sector, for example. A Category 1 violation carries a $100 minimum fine, with a ceiling of $50,000. A Category 4 violation carries a $50,000 minimum fine, with a ceiling at $1.5 million.

As the severity and number of violations increases, fines can skyrocket. Fines can also vary wildly by industry. The largest fine ever levied for an environmental violation, for example, was against BP for the 2010 Deepwater Horizon spill: $18.7 billion.

In the post-Enron era, governments throughout North America and Europe have taken major steps to prevent future corporate corruption. There has been a surge in regulations affecting every branch of a business. Knowledge of these regulations and their penalties will protect your business in the future – and possibly change the way you operate.

The Constantly Changing World of Regulatory Compliance

Part of running a growing business is preparing to change the way you operate to comply with new regulations. In some industries, sweeping regulations and policy changes mean that decision-makers have to stay on their toes. Two industries in particular come to mind: healthcare and finance.

The Affordable Care Act was rolled out over several years and made significant changes in the healthcare sector, particularly regarding insurance processes and plan administration. As healthcare professionals adjusted and grew accustomed to these changes, shifts in the political landscape made it clear that things could change again very quickly. It’s impossible to tell what the regulatory scene will look like for the healthcare sector in two years.

After the Enron scandal, legislation like the Sarbanes-Oxley Act introduced sweeping regulations for American businesses, particularly in the financial sector. Responsible recordkeeping and financial reporting has never been so important. This goes doubly for businesses working with large amounts of other people’s money.

In some cases, organizations in these industries are able to hire a full-time compliance staff. For small to medium-sized businesses, hiring a dedicated compliance team may not be feasible. In cases like these, working with an outside compliance expert may be the best course of action.

Certain managed service providers like Diverge IT are uniquely equipped to help businesses address and resolve regulatory compliance issues. If you have concerns about your current level of compliance or want an extra level of assurance, we’d love to discuss what our team can do for you. Feel free to get in touch – peace of mind could be just a phone call away.

Three Industries that Require Certified Regulatory Compliance

In the modern marketplace, nearly every industry is held to certain regulatory standards for information and data handling. Certified regulatory compliance has proven to be a challenge for many businesses. Regulation complicates many aspects of recordkeeping and operations, especially in industries that handle sensitive data. As a result, the line between remaining compliant and properly protecting customer data and sensitive assets has a tendency to blur.

For small businesses, however, the challenges of certified regulatory compliance are even greater. Startups can rarely afford the services of a full-time compliance manager. Unfortunately not many entrepreneurs have a full working knowledge of the regulations affecting their industry. Thankfully, there is a solution to this problem. You can rely on an outside service provider to handle certified regulatory compliance so that you can focus on actually running your business.

If your business operates in any of the following sectors, regulatory compliance should be one of your top priorities as a manager. Keep in mind, however, that this is not even close to an exhaustive list. If you’re curious about the regulatory environment for your industry, there’s no substitute for professional counsel.

Healthcare

As one of the most regulated industries worldwide, the healthcare industry should be highly concerned with certified regulatory compliance. One of the most important aspects of the healthcare industry from an ethical and legal standpoint is the protection of patient information. This is more than a matter of doctor-patient confidentiality. Data breaches, hardware failure, and other potential disasters pose a huge threat to the integrity of healthcare organizations. HIPAA compliance is often at the top of a healthcare administrator’s list of priorities.

Certified regulatory compliance is essential for any healthcare organization, and compliance often coincides with investments in solutions like data backup and recovery. At Diverge IT, we have experience working with healthcare providers to handle regulatory compliance and other issues.

Finance

Like the healthcare industry, the financial sector is also highly regulated. 21st Century legislation like Sarbanes-Oxley has made compliance more of a priority than ever before. Responsible bookkeeping and reporting are top priorities. Any business that involves moving large amounts of money should be highly aware of compliance issues.

Diverge IT has extensive experience handling certified regulatory compliance and other IT needs for financial institutions. In high-risk industries like these, it pays to be vigilant.

Education

Regulation has become part of the DNA of higher learning institutions. Legislation like FERPA and Title IX have affected the way universities and colleges operate on a fundamental level, and can carry heavy penalties for breaches in protocol. Regulatory compliance affects nearly every department in an institution, from admissions to athletics.

Regulatory compliance is a great trademark of an ethical organization, and regulatory breaches can carry heavy civil, criminal, and financial penalties. If you think your business could benefit from professional consulting on certified regulatory compliance, it’s worth having a conversation with a professional about it. Besides our suite of managed services, Diverge IT also offers compliance expertise that can help protect your business. Don’t hesitate to get in touch if you’d like to get a conversation started,