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Posted On:
November 15, 2023

Leverage AI to Improve Alignment Between Policies, Regulations & Controls

This blog discusses how teams can use AI-driven compliance to gain alignment between business intent, regulations, policies and controls.

LEARN Series 1: AI-driven Compliance Management as core technology revolutionizing risk, compliance and security programs.

In this series, we explore how AI-driven compliance management revolutionizes processes and creates alignment between governance, risk, ESG, compliance, IT, security and privacy programs.  Check out these editions in this series to learn more!

This blog discusses how teams can use AI-driven compliance to gain alignment between business intent, regulations, policies and controls.

The Challenge

  1. Change Happens - Policies govern business intent.
    It is no secret that organizations are complex structures. Procedures and functions intertwine and operate to ensure that value produced at the end of the pipeline is consistent and sustainable. Corporate policies govern, inform, and guide procedures, acting as a core principles for how business strategy is to be executed. When the time comes for a change in strategy or an adjustment to the state of the organization, policies are reviewed and revised to steer the organization toward its desired goals.
  1. Regulations are Complex! Policies and controls need to reflect changes.
    Regulations are another complicating factor, as they define the boundaries of how an organization may operate. Regulations, and their enforcement, are continuously changing as they address emerging concerns such as climate change, fraud or privacy. As risks evolve, economic conditions change, and social concerns inform the role an organization plays within its community, so do the regulations to which they must adhere.  
    These factors paint a seemingly straightforward picture. Regulations, along with other macro concerns, inform an organization’s strategy, and its objectives and risks, which are then governed through policies. Policy informs related processes, procedures and critically - the controls which provide evidence on how well they are being adhered to by employees, customers, partners, contractors and other third parties. Those procedures and controls produce the value which in turn supports the organization in achieving objectives and minimizing risk exposure. And as this cycle continues, the organization evolves and needs to stay aligned with changing regulatory, legal, economic, competitive, and emerging risks.  
  1. Map the Gap – Policy and Control blind spots increase risk.
    But this cycle is far from a simple one, and success is not guaranteed. It may be unclear how a regulatory change affects an organization, and if it does, how it needs to adapt to meet its new and evolving obligations. Policies govern the organization’s actions, behavior, and culture, but can easily be overlooked in day-to-day operations or mismanaged in a way that creates ambiguity. Controls meant to help inform decision-making and mitigate risks can become outdated, irrelevant, or disparate as different parts of the organization go about their operations and are susceptible to blind spots.  
    It can be frustrating for organizations to find a way to align so many different aspects of their organization into a single consistent whole that can respond to change with flexibility rather than toppling over like a house of cards with each new regulatory change or strategic shift adding another precarious layer to the structure.  

The Solution

AI-driven Compliance is revolutionizing analysis and serving up insights.  

Compliance has come a long way in enabling organizations to align their controls, policies, and procedures with their regulatory responsibilities and strategic goals/objectives in the context of change. Enabling teams to consolidate information, centralize and organize controls, and reduce waste efforts has unlocked a level of agility that gives these organizations a competitive edge.  

However, with the emergence of accessible AI technologies, new ideas about the value these tools can deliver has expanded the realm of possibilities for compliance and risk management teams.  

  1. AI is particularly suited for data analysis. AI tools can help analyze and identify patterns more effectively, even correlating information from disparate data sets. With AI, organizations have a tool that can find and potentially diagnose problems quicker and with a much higher level of visibility and accuracy into obscure indicators.  For example, AI can crunch through massive amounts data, that humans simply cannot – and address challenges of quickly understanding the implications of a regulatory change on policies, procedures, controls.
  1. Process mapping is another area AI can provide a tremendous level of assistance. Understanding how one process flows into the next, and in what ways it contributes to the organization can be a complex task. As organizations respond to a barrage of regulatory changes, teams must be thorough in ensuring that any new or changed requirement is properly addressed anywhere it is relevant across a dynamic business environment. AI tools assist by mapping processes to one another throughout the organization and by applying the implications of regulation to the known process map, identifying all the areas to which attention should be paid. This can be a tremendous benefit to those who would otherwise go to painstaking lengths to understand and address how they are exposed to a particular risk.  
  1. Deep Insights help prioritize what to do to remain in compliance. Knowing what needs to change, in priority sequence is table stakes for staying in compliance with regulations and evolving business obligations. Getting insights that allow team to quickly triage and act on new requirements can mean the difference between being in headlines, or reading about your competitors, who have mis-stepped.  

Summary Insights and More Resources on this topic

AI is pushing the boundaries of what compliance management groups and Compliance tools can achieve as teams strive to align policies and controls to regulatory and business obligations. Through data analysis, process mapping and deep insights, teams, can focus their efforts on leveraging sustainable and practical tools to respond with agility to the compliance risks which will inevitably emerge as their markets and organizations evolve. It can mean the difference between thriving in a world of change, meeting your business objectives, or becoming overwhelmed and ultimately, ineffective.  

4Crisk products: Regulatory Research, Compliance Map, Regulatory Change are revolutionizing the way organizations connect regulations with their business requirements.

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