KYC AML Guide: the Clock shows the average reeding time of the blog07 min Read


KYC AML Guide: the Clock shows the average reeding time of the blogMarch 15, 2024

The Future of Compliance Consulting: Trends and Predictions

A compliance professional understands the changing landscape of industry standards and regulations. Staying current with the latest trends and anticipating changes is essential to managing a successful compliance program. In this blog, we discuss the current trends and predict what will happen in the future.

Belal Mahmoud

KYC Product Consultant

1. Using Artificial Intelligence and Automation

Let’s start with the facts. According to Accenture’s Compliance Risk Study, 54% of respondents said that artificial intelligence and machine learning technologies are strengthening compliance. In short, artificial intelligence will help us in the coming years. This leads to performance improvements that were not possible before. A 2023 survey by a compliance and risk management firm found that 85% of compliance professionals said their compliance and risk management teams spend at least 30% of their work time on repetitive tasks, a common cause of fatigue. The research and analysis firm Gartner in its mid-2023 report, said, “Compliance professionals expect technology to be one of the highest spend of budget this year.”

In short, compliance professionals will use next-generation AI technology to reduce manual labor and pave the way for greater efficiency, effectiveness, and risk prevention. Failure to do so opens the door to other risks in a broader and more complex regulatory landscape.

2.  Cybersecurity Compliance

Cyber security has become a critical aspect of compliance according to compliance professionals, especially due to the increasing frequency and severity of cyber attacks. As per Cybercrime Ventures in 2024, cybercrime is going to cost $9.5 trillion to the world.  Organizations must implement strong cyber security measures to protect their sensitive information and demonstrate compliance with relevant regulations. According to IBM‘s 2023 Cost of a Data Breach report, data breaches are costing companies $4.45 million, an increase of 15% over three years.

A compliance professional plays an important role in managing and communicating this organizational risk. Because it is not only expensive but can lead to legal action, criminal penalties, reputational damage, and lack of trust from others. Furthermore, non-compliance, especially where criminal sanctions are imposed for non-compliance, can sometimes exclude individuals from companies operating in their sector or region.

3. Communication Compliance

By 2024, compliance professional predicts to focus on law enforcement and communication compliance. Fixing recorded communications is becoming a compliance issue. Companies must demonstrate that they have properly recorded all the necessary information to meet the legal requirements. More than $2.6 billion in fines have been imposed recently, mostly due to a lack of communication. However, laws are now also enforced for improper data handling, including deletion errors, poor maintenance, and retrieval challenges.

Compliance professionals should have a well-defined, streamlined procedure for allowing authorized employees to comment, make changes, or give approvals on a document whenever it is involved. Showing this work in one shared space, rather than through email or other online communication, is basic. With regards to giving a proof path of conversations, alters, and sign-offs, it’s then simple for the compliance team to give everything in one spot.  In 2024, communications compliance is expected to be a key topic on company boards, and a large number of companies have already made this topic a top-level issue.

4. Managing Regulatory Change

The first important aspect of compliance risk management in the future is that organizations must quickly adjust to changes in global law, especially in the financial and technological sectors.  As per Diligent, in 2023 regulatory compliance is seen as a top risk for organizations, with 73 percent of risk compliance professionals worried about meeting compliance needs. Therefore, some organizations need to build the capacity to establish a strong change management system to cope with organizational change as they become more informal.

5. Increased Focus on Data Privacy

Data protection remains a major concern for organizations and governments. The EU General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) are just two examples of laws aimed at protecting personal data. In the coming years, we can expect to see an increase in the number of countries implementing similar laws and a greater emphasis on the ability of organizations to demonstrate compliance with these standards. As per Gartner  Research in 2024, 60% of organizations will employ new solutions to better protect data while in use, for example, privacy-enhancing computation techniques.

Compliance professionals are at the forefront of navigating a rapidly changing regulatory environment that is exacerbated by technological advancements and global economic pressures. The invention of strict AI guidelines elevated cybersecurity threats, and the arising significance of corporate sustainability highlights the requirement for agility and advancement in approaches. It is not only a trend but also a necessity to integrate artificial intelligence into compliance procedures.

These innovations offer remarkable chances to improve effectiveness, decrease manual responsibility, and smooth out compliance processes. The proactive adoption of these tools will be vital in dealing with the expanded regulatory demands and intricacy of compliance professional tasks.  The key to ensuring that our organizations fulfill the expected guidelines as well as influence these changes to acquire an upper hand is staying informed and adaptable.

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Belal Mahmoud
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Belal possess over 8 years experience in the KYC Identity Verification industry. He has consulted KYC solutions for over 20 new economy companies at DIFC and ADGM while ensuring a seamless technical integration and helped in jurisdictional compliance audits.