Compliance means following complying rules and regulations, policy standards. Regulatory compliance defines the aim that an organization strives to accomplish. This is done to ensure that they followed sector specific rules & comply with them.
Due to the growing number of regulations and the need for organizational transparency, the use of a consolidated and harmonized set of complicated controls is increasingly being embraced by the organization. This approach is used to ensure that all the required criteria for the governance can be met without needless duplication of resource effort and operations.
According to Statista, “This statistic depicts the share of institutions based on the key concerns of financial crime and compliance in the Middle East and North Africa (MENA) in 2018. During the survey period, 27.62 percent of respondents replied that complying with international and local regulation to avoid censure was their main concern.”
What Is Asset Management Compliance?
Asset management compliance is required to manage assets as per the standard of the business specific sector. An organization must comply with the relevant laws and regulations and internal policies. Compliance ensures that the organization follows the rules made by the government and authorities.
The best example to explain compliance is paying taxes on time. The need for asset management compliance increases as the business grows. When your organization complies with the industry your business will run smoothly.
Asset management compliance provides you a detailed report. It improves the chances of achieving the target and lets you know how much improvement has been done so far. As we know there are certain rules for special equipment such as a license for keeping the equipment or taking special permission from the government.
If an organization does not comply with the rules and regulations of the industry then you will end up paying a fine specifically if the organization is found violating a rule during asset audits. Rule violation not only results in a heavy amount of fine but it also creates a negative impact on brand reputation.
If the working place does not comply with safety and security then employees will change their jobs because they will be worried about the working place. However, if the place is safe then employees will be attracted automatically.
Brand image matters a lot in business and it is important for the business. Especially when the government starts intervention in your organization and customers start losing faith in them. Obviously when you will lose customers your business will suffer. Compliance ensures that the organization's image is clean and transparent.
What Are the Various Types of Compliance?
Compliance can be divided into two categories.
1. Internal Compliance: Internal compliance is a designed set of rules and regulations set by the management of the company.
It needs to be followed by every employee, customer, etc. It is done to makes sure that the quality of the product or service is not jeopardized.
For example, all the departments need to ensure that all the papers & documents are well maintained so that no issue occurs during an audit.
2. External Compliance: It is also known as regulatory compliance. The government authorities and organizations set the rules and policies not just for organizations but for all organizations. Compliance is done for the various reason for example:
- To check the parameters of safety for employees.
- Check the quantity & quality of the product.
- To check the organization is using valid software.
- To check if everything is formalized and documented.
External compliance also cross-checks the financial records as per the law and ensure the record is clean and so that investors do not hesitate in investing in the firm.
Overall, external compliance is making sure that your organization follows the set of rules and protocol of the industry. These policies are made by the government for the people.
What Are the Challenges in Meeting Asset Management Compliance?
Meeting asset management compliance is not a simple job. It needs a business to execute strict policies and track its performance regularly. Here are the challenges businesses face while documenting their workflows to gain compliance:
1. Keep Yourself Updated
One of the biggest challenges in meeting compliance is keeping yourself updated especially when your business is growing. Policies, rules, and regulations are updated regularly if you don't keep up with the curve you will end up paying penalties and fines.
2. Compliance Standard
Evolving market trends need an organization to constantly re-evaluate its standard of quality. It means to cope up is a necessity! Nobody wants that their organization is penalized for not meeting the quality standards.
3. Data Security
Data security is a very sensitive issue as an organization has lots of data including their customer's name organization and so on. As we know nowadays cyberattack is on rising. A company has the responsibility for keeping data safe not only for compliance but also for their customers.
4. Inconsistent Baseline Processes
Without a consistent baseline, it will not be easy the track how much improvement has been made so far! Thus, all companies must have consistent baseline protocols and compliance documentation standards. This becomes hectic, money, and time-consuming specifically when your organization is grown & widespread.
Asset management compliance is very important for the business. It keeps your brand image clean and allows investors to invest without any doubt.
However, when an organization does not comply with rules, they face issues. You can easily avoid all these issues & challenges by utilizing asset management software. Because this software is cloud-based so it provides data security so no chances for data breaching and it keeps multi-layered data security and data encrypted form.
This software can help you to resolve regulatory and compliance challenges. This software can help in keeping track of changes done. Furthermore, it can help in collecting data and sharing information with all team members.
Asset Infinity's asset management software can provide these benefits:
- Minimizing compliance issues.
- Increasing daily operation efficiency.
- Data tracking, information sharing.
- Better decision-making.
- Improving & enhancing brand reputation.
Frequently Asked Question (FAQs)
1. What is a regulatory compliance audit?
Audits are helpful to organizations as they let you know where you are adhering to the rules and regulations where you are ignoring. The best practice is to perform an internal audit through which you identify where you need to improve because if it is found by an external auditor then you will end up paying a huge penalty.
2. Give some examples of organizations and laws that help in managing compliance?
U.S. Food and drug administration (FDA), Indian Standards Institute (ISI), HIPAA (The Health Insurance Portability and Accountability Act), The Federal Information Security Management Act (FISMA) are some organizations that help in maintaining compliance.
3. What is asset management?
Asset management is the procedure of maintaining and keeping assets in good condition. It includes keeping track of asset and asset lifecycle.