8 Compliance Challenges Enterprises Face in 2025
October 18, 2024
Compliance is a critical concern for businesses today, but navigating the rules can be overwhelming. With regulations constantly evolving, many organizations struggle to keep up.
I had the opportunity to participate in a recent virtual panel with Ashish Tandon, Founder & CEO of Indusface.
Over the years, I have consulted with multiple large enterprises across geographies and industries. Below are the top challenges that they face as far as compliance is concerned.
Top Compliance Challenges and How to Address Them
1. Navigating a Complex and Evolving Regulatory Landscape
One of the most significant challenges in managing compliance is navigating the constantly evolving and complex regulatory requirements across industries. In sectors like healthcare, financial services, and technology, organizations must carefully monitor, report, and manage every process to comply with government regulations. The added complexity comes from varying compliance demands across jurisdictions, making it difficult to keep up with ever-changing rules.
To manage this effectively, staying updated on all regulatory changes is crucial. Organizations can benefit from having a dedicated team to monitor and analyze regulatory updates.
Investing in regulatory technology (RegTech) that automates compliance tracking and provides alerts for new laws can also streamline this process, reducing the burden of manually tracking changes. Many companies also seek external consultation to further simplify regulatory management and ensure they remain compliant.
2. Resource Constraints and Skill Gaps
Across industries, a common compliance challenge is resource constraints, particularly the shortage of skilled professionals who understand the nuances of compliance. There’s often a disconnect between the legal teams focused on the legal aspects and the IT/security teams focused on control testing. This creates gaps in compliance implementation.
Building a cross-functional team that includes legal, IT, and compliance experts can help bridge the gap. Training and upskilling staff on compliance requirements is equally important.
3. Data Management Complexity
Data management is a critical component of compliance, and organizations often struggle with understanding where their data comes from, how it is stored, and how it is being used. Different industries handle various types of sensitive data, such as healthcare records, financial data, or intellectual property, each requiring specific handling and classification.
Implementing robust data classification, encryption, and monitoring systems is essential. Companies should also train employees to understand data-handling requirements specific to their roles.
4. Employee Education and Awareness
Many organizations face challenges in educating their employees about compliance requirements. Lack of awareness can lead to unintentional errors, such as improper data handling, which can result in significant compliance violations.
Regular employee training programs that focus on compliance and security practices are essential. Creating a culture of compliance by encouraging employees to prioritize these efforts can help minimize risks.
5. Technology Integration Issues
Technology plays a significant role in ensuring compliance, but integrating new technologies can be challenging. Many organizations struggle to align their existing systems with modern compliance requirements, especially with the rise of cloud computing. Understanding how these technologies impact compliance can be difficult, particularly if there’s a technology debt where outdated systems continue to be used.
Prioritize addressing technology debt by upgrading or replacing outdated systems. Ensure that any new technology adopted is compliant with industry standards from the beginning to avoid future compliance headaches.
Additionally, engage third-party vendors to obtain clean vulnerability reports and SOC 2 reports. These audits enhance confidence in your security practices, making compliance audits easier to pass.
6. Proving Compliance
Even when organizations are compliant, proving it can be a challenge. When auditors or regulators ask for proof of compliance with regulations like GDPR or CCPA, many organizations struggle to provide clear documentation showing that they are meeting the necessary standards.
Develop a structured compliance reporting process. Documentation is key, and having a clear audit trail that shows how your organization meets various regulatory requirements will be critical for proving compliance.
7. Balancing Compliance with Usability
Maintaining a balance between compliance and operational efficiency is another challenge for many organizations. Strict compliance measures can sometimes hinder business operations, especially in sectors with high user demand, such as e-commerce or financial services.
This requires aligning business goals with compliance needs and ensuring that compliance is seen as an enabler, not a hindrance.
8. Managing Third Parties
Many organizations today work with multiple third-party vendors, and ensuring that these vendors are also compliant is a huge responsibility. Third-party compliance is a growing concern as it can affect your company’s overall risk profile.
It’s important to have a robust third-party risk management strategy. This includes clear communication of compliance expectations, regular audits, and assessments of third-party vendors to ensure they meet your organization’s compliance standards.
By addressing these compliance challenges head-on and implementing the right strategies, organizations can stay compliant while continuing to operate efficiently and effectively.
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