91% Of CEOs Are Concerned That They Are Not Prepared For Regulatory Risk
In an industry whose entire premise is built around providing expertise and being ahead of the curve, it is shocking to report that the vast majority of professional services firms say they are unprepared for the elephant in the room: regulatory risk. In fact, it’s less of an elephant and more akin to a brontosaurus given the scale of the issue and the potential impact if the status quo remains. Therefore it is time for firms to take action and ensure they are not just compliant, but agile enough to respond quickly and effectively to the risks of tomorrow.
What do firms need to do to prepare for regulatory risk?
Professional Services Trends Report 2018
Take A Long Hard Look In The Mirror And Audit Your Processes
You can’t plan for tomorrow without understanding where you are today, so the road to compliance begins with auditing your current processes and systems. It is essential that firms understand what legislation and guidelines impact their own business. If you have international operations (clients and/or offices), ensure someone is appointed accountability for understanding the local laws and regulations for the countries in which you do business.
Take Control Of Your Processes
Firms then need to tackle the brontosaurus in the room and, using the intelligence gathered during the process audit, work to mitigate identified risks and ensure compliance. Once you understand the scale of regulation and risk, then is time to map business processes to streamline the road to compliance.
Of course, it can be difficult to predict the risks of tomorrow. Therefore, having a governance framework in place across all core business functions is a recommended action for firms wanting to minimise disruption, and ensure all corners of the business adhere to set guidelines and improve efficiencies.
The industry is facing an ever-evolving myriad of legislation; from IFRS to GAAP, GDPR to ISO9000 to name just a few of the better known. The next big data breach, misreported profit statement or service crisis could bring further legislative change. It is critical that professional services firms prepare their systems and processes to deal with these legislations or potentially face the crippling effects of monetary fines and damaged reputations.
Streamline & Enable
Tackling regulation can seem burdensome, so we advise firms to look to ease the load and ensure technology and processes are enablers. Key business tools such as your enterprise resource planning software should be utilised to tightly manage processes, ease administration, identify schedule and delivery risks and provide clear audit trails (read more about the value of ERP here). ‘RegTech’ rose to prominence in the aftermath of the global financial crisis, but the concepts and principles will benefit all professional service firms looking to be both compliant and agile to change, without burying your team with administration.
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Embed A Compliance Culture
Managing regulatory risk is not just a management issue. For firms to tackle it successfully, it needs to be both top-down and bottom-up. Creating a compliant culture across the entire business by promoting communication between divisions, circulating process documentation and best practices and embedding regular checks and measures is critical. Firms who lead the way are ensuring they have the governance practices centre stage in decision-making processes, and are not siloing the responsibility.
Having regular audits and process checks in place, and having technology tools which are agile to change, will ensure you and your business are prepared.
How does your firm compare when it comes to being prepared for industry change and challenges? Download our latest research report, Insight to Action – The future of the professional services industry and see how you measure up.
2018 Industry Report
Professional Services Trend Report
- Agency Workflow
- Architecture and Engineering Firms
- Business Intelligence
- Change Management
- Cloud ERP
- Consulting Firms
- Financial Management
- Job Costing
- Legal Sector
- Marketing and PR Agencies
- Professional Services Automation
- Professional Services Industry
- Project Information Management
- Project Management
- Resource Planning
- Talent Management
- Time and Expenses
- Traffic Management