The Ever Changing Role of Compliance and Regulation in Business

Compliance has become an increasingly important factor in business over the past two decades. 

The days of the Wild West are over, and with the emergence of technology, social media and instantaneous news, companies must be careful or risk ending up on the news, in their deep (or not-so-deep) pockets or even in prison. The role of compliance and regulation in business has never been more crucial, and everyone from giants like Amazon and Apple, to Silicon Valley startups and side-hustle shopify sites are ensuring they are in accordance with established stipulations or guidelines. Ignorance is not an excuse in business, and the onus is increasingly on companies to stick to the rules and know when they change. When changes occur, like breaching a contract, it is important for businesses to rectify the situation to further avoid non-compliance. 

As a business practice, compliance is a relatively new concept, and a rapidly growing field in modern business. Working conditions during the industrial revolution were horrific, and when Upton Sinclair published his book, The Jungle, in 1906, publicising the disgraceful working conditions of a Chicago meatpacking plant, the government finally got involved and established the Food and Drug Administration (FDA) as a public safety initiative.

As the world kept industrialising and modernising, the friction between business and government continued. In fact, as recently as 2015, PricewaterhouseCoopers Global CEO Survey showed that 78% of respondents (CEOs) were concerned with over-regulation. Historically, there has been a constant push-pull between business and government regarding compliance and regulation, but as globalisation increases, as does technology and digitisation, CEOs to mom-and-pop stores are beginning to understand that compliance and regulation is not going away- in fact, it’s only going to become more vital to the success of their companies. 

Compliance and regulation was created to improve corporate behaviour and encourage self-policing, adequate safety and ethical conduct, in part by implementing lighter punishments for organisations with efficient compliance and regulation procedures in place. 

It’s all about risk management. Business owners don’t relish the idea of bureaucracy, regulations and paperwork, especially because this regulation covers all areas of the business, from OHS, customer privacy security, finances and HR. 


However, the non-compliance leads to fines and lawsuits- words business owners hate to hear. Whether you’re dealing with consumers, state or federal government, non-compliance puts you in the firing line, in danger of receiving criminal and/or civil penalties ranging from small to seriously heavy fines, work stoppage, business closure and even imprisonment, not to mention the possibly undoable reputational damage that comes with all of that mess.

Compliance is integral, and we are starting to see it boom in boardrooms across the world. 

Technology is king 

Globalisation, disruptive technology and modern business strategies have meant that the rules are being implemented and changed faster than ever, and as businesses grow, so too do levels of culpability.

Some significant changes we are seeing in compliance and regulations are:

  • Bigger compliance budgets in big institutions
  • More diverse jobs in compliance
  • A more important role for the Chief Compliance Officer (CCO)
  • 2-factor authentication 
  • Scaling back of overdone human checks and balances
  • Customer onboarding automation 
  • Managing rapidly scaling businesses 

With businesses rapidly expanding, it opens them up to scale-related compliance issues. This is where strategy comes in. It is becoming more and more essential that businesses implement efficient processes that actively keep tabs on regulatory requirements to avoid fines or further punitive measures. There is no one-size-fits-all approach, and much of the strategy will depend on the specific business, but the scalability of compliance and regulations is still an area just waiting to be figured out. 

Being proactive will always beat being reactive. 

The evolution of compliance teams has been astronomical, particularly over the past 20 years as technology has catapulted business into the digital age. There are now even emerging Business Intelligence compliance technologies like RegTech which could have enormous impact on the compliance and regulation in the future. By using AI to keep track of compliance risks and areas of interest, the gruntwork (and guesswork) could eventually be taken out of the whole process. Of course, there is still some skepticism from businesses regarding the innovative technology, however it is something to keep an eye on.

The business world changes fast, as do the rules and regulations; but reputations, once damaged, are tremendously difficult to salvage. Compliance is becoming a fundamental business strategy, focused on decreasing risk, increasing profitability, function and overall customer satisfaction, with everyone from CEOs to small business owners realising that regulations aren’t just restrictions to navigate, but are also an opportunity to make their companies more competitive. 


Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

Posted in Uncategorized

Leave a Reply

Your email address will not be published. Required fields are marked *