It’s no secret that budgeting, along with almost every other aspect of business, will be different as a result of the COVID-19 pandemic.
For one thing, revenue and expenses are both up in the air, as economic uncertainty continues to weigh on many businesses. It’s hard to project the costs for a future that could be volatile.
For another thing, many teams continue to work remotely in order to safeguard their employees from potential community spread of COVID. Working remotely can impact budget planning because of the need to collaborate electronically, which can mean additional tech-related expenditures.
As a Compliance leader, now is the time to seriously consider technology that can streamline processes and make a plan that focuses on winning the budget dollars you need to run your department efficiently.
Why Is Compliance Technology A Must During This Budget Cycle?
Technology is becoming table stakes in the compliance industry. Why?
Compliance is a document-heavy, data-heavy business function. To maintain a high-quality, compliant compliance program in the most ideal circumstances means processing plenty of paperwork and filing repetitive data.
In an environment where people are still working from home and translating their in-office procedures to virtual processes, it’s inevitable that some operations may fall by the wayside simply because of the overwhelming nature of what each business professional is being asked to do while social distancing.
Compliance can also become an out-of-sight, out-of-mind process for many other business units. If their compliance leaders aren’t checking in regularly, it can be easy to forget to keep compliance in the loop.
That means possibly missing out on some items/processes. It’s impossible to maintain oversight on every team in your company remotely and is challenging to effectively stay in touch, leaving little time for more critical compliance processes and reviews.
The purchase and implementation of compliance technology provides everyone a consistent baseline regarding expectations. Instead of wondering whether compliance should be included in a process, incorporating technology, workflows, and support can get everyone on the same page and invest in making their life simpler and reducing the firm’s regulatory risk.
How Does The Evolution Of The Compliance Professional Factor Into The Budget Planning Equation?
We’re all guilty of thinking this – we don’t necessarily trust technology that might lighten our workload.
After all, if technology reduces the need for humans in the compliance review process, aren’t we just budgeting ourselves out of a job?
If you’re strategic, you recognize that your organization needs a compliance professional at the table during discussions about everything from product design/development to market expansion to budget allocations. In our fast-paced business landscape, compliance professionals need to be included in strategic processes and must provide continuous monitoring of regulatory guidance application.
Compliance isn’t a one-and-done or check the box discipline. To do it well, you need to be actively involved, not sit on the sidelines, and wait for another department to assign you work or request a final sign-off blessing.
If you’re continually at your desk, personally and laboriously reviewing every piece of compliance material, every advertising document, etc., that comes across your desk, you won’t be able to be present and provide strategic guidance to your colleagues.
As compliance procedures continue to become more complex and with regulations from multiple governmental entities sometimes at odds with one another, compliance professionals also need to dedicate themselves to continuous learning, reading/reviewing, and higher-level analysis.
Employing automation technology in some compliance processes (like advertising compliance review, for example) reduces time spent on repetitive tasks and boosts your focus and commitment to managing critical activities that benefit your organization and mitigate regulatory risk.
I Know My Budget’s Being Cut This Year. How Can I Make Compliance Technology A Must-Buy For My Organization?
To secure the technology you need, you must convince others in your organization that the solution you’re proposing brings a significant return on investment to your organization. You also must recognize and broadcast that ROI comes in multiple forms.
Consider the opportunity cost.
If it seems difficult to ask for more money or to entertain new purchases during this budget cycle, remember that the actual line-item on the budget isn’t the only cost you should consider.
Compliance fines continue to grow as regulators crack down on even well-meaning companies. That means both massive penalties like the $550 million one levied against Goldman Sachs for misleading mortgage buyers, and smaller but still onerous fines like Arlington Capital Management received for misleading advertising ($125,000 in civil penalties). Last year alone, the SEC ordered companies to pay $4.3 billion in fines and disgorgements for actions that perpetrated harm on investors and markets.
Having a weak compliance program is a frequent citation during SEC reviews. Having technology in place to support your compliance efforts has become a necessity, and not having a resource available for your team can be a red flag to regulators seeking to ensure you’re adequately supporting your organization’s compliance efforts.
Time saved can be another measure of opportunity cost. If your team members are all working remotely, how are they handling processes that were once manual?
When it comes time to prepare for an audit, are you going to find that all your compliance documentation spread across an extensive network of team members’ homes and computers? How much time will it require to get that paperwork in place, and what’s the per-hour cost compared to making a technology purchase to streamline those processes?
Get business units invested in your vision.
When you advocate for yourself in a budget meeting, it can be frustrating to try to wring out the dollars and cents you need, especially if your organization’s concerned about the impact of the economic decline on your next year’s revenue.
Need a better strategy for getting your technology line items approved? Consider partnering up with another business unit that stands to gain value or time-savings from the implementation of new software.
For example, if you’re looking into advertising compliance technology, go straight to the source of your organization’s advertisements – the marketing team. Outline the benefits they’ll receive from the technology purchase (resource savings, faster time-to-market, less back-and-forth), then present it as a unified request.
You’ll gain several benefits with this approach:
- You’ll present yourself as a strategic thinker, looking for ways to collaborate between teams. This can lead to further and earlier inclusion in discussions, positioning compliance as a vital part of the decision-making process, rather than an afterthought or a last-check-before-going-live.
- You’ll have a better chance of approval if you have two teams looking for a solution, instead of positioning it as one team making a technology request solely for their benefit.
- You can split the cost between interested departments, decreasing your overall budget investment.
Advocating for compliance technology means you’re wisely considering the resources that will keep your organization out of trouble, in compliance, and functioning at a high level.
If you’re working to win the budget you need for new tech resources, present the strategic impact of your technology purchases and the benefits that compliance automation technology can bring to your organization.