Regulatory compliance is a company’s adherence to the laws and regulations that apply to its industry, processes, and type of business. Organizations need to meet all relevant local, national, and EU legal requirements to protect themselves from penalties and reputational damage.

This article focuses on the benefits of regulatory compliance for businesses and how Penneo can help you comply with data protection and AML laws.

How can my business achieve regulatory compliance?
What is the cost of compliance?
What are the benefits of regulatory compliance?
Penneo can help you achieve regulatory compliance

 

How can my business achieve regulatory compliance?

Since not all businesses are subject to the same rules, ensuring regulatory compliance is different for every company.

Therefore, you have to identify what legal obligations apply to your company depending on:

  • the company’s location
  • the industry in which your company operates
  • the countries where you do business
  • the types of products and services that you provide
  • the type of customers you have
  • your supply chain etc.

For example, a company operating in the food sector in New York must meet standards regarding food quality, animal health, and hygiene established by the US Food and Drug Department.

On the other hand, a firm providing financial services in Sweden must comply with regulations focused on fraud prevention, data protection, cybersecurity, and financial instruments provided by the Swedish government, the EU Commission, the European Central Bank, and the European Central Authority.

Therefore, the first step to ensuring regulatory compliance is identifying your company’s legal obligations. Then, you can develop and implement the necessary measures to meet them.

 

What is the cost of compliance?

The cost of compliance refers to the expenses associated with the resources needed to ensure regulatory compliance. It includes the cost of personnel, infrastructure, and operations dedicated to meeting legal obligations.

Since the cost of compliance is directly proportional to the number of legal requirements that apply to the company, some firms have lower compliance costs than others.

For example, a small company operating in a single location will have to spend less money on ensuring compliance than a global enterprise working across several jurisdictions.

Other types of expenses that are often associated with the cost of compliance include:

Regulatory risks

Legal changes or new requirements can impact the specific industry in which the company operates, thus influencing the cost of compliance.

For example, changes in the tariffs for international trades can affect companies that run an import-export business. Besides weighing on the company’s balance sheet, these changes can also negatively affect the business’ competitiveness or make it less attractive to investors.

Compliance fees

Along with fines, each regulation includes specific penalties for non-compliance. The penalties vary from temporary bans on operations and the exclusion from public funding to permanent closures.

Many studies have shown that the cost of non-compliance is almost three times higher than the expenses associated with ensuring compliance.

Reputational risk

Business leaders consistently rank reputational risk as their number one worry.

Media scandals have shown how Warren Buffett was right in saying that it takes 20 years to build a reputation and about five minutes to lose one. Failing to meet compliance obligations can ruin a company’s public image and jeopardize its efforts to retain customers.

 

What are the benefits of regulatory compliance?

Many companies find it challenging to stay on top of compliance requirements due to the changing nature of the regulatory landscape.

New legal requirements are often seen as restraints on business activity since organizations fear that they will need to dedicate more resources to ensuring compliance.

But in the modern market, an organization can only succeed by keeping up with regulatory changes and leveraging the opportunities they provide. Because, when done well, compliance turns from a legal burden into a competitive advantage.

By complying with legal obligations, companies can:

Build customers’ trust and improve public relations

The success of a business pretty much depends on its public image. Regulatory compliance improves a company’s ethical stance, showing that it is honest and trustworthy. In turn, this earns customers’ loyalty.

Benefit from a level playing field and become more attractive for investors

Industry-wide rules create a level playing field where everyone has equal chances. What makes the difference is the quality of the products, the technology, and the people behind them. A good compliance record indicates that the business is well-run and can influence its desirability for investments or partnerships.

Optimize business processes and strategic decision-making

To ensure compliance, you must accurately document your business operations and data assets. In turn, data visibility enables you to make informed business decisions when it comes to planning investments, improving profitability and identifying emerging risks.

Attract top talent and enhance employee retention

Top talent looks for companies that take compliance seriously. An effective compliance program helps attract skilled and engaged employees.

The same goes for current employees. The more people feel they work in a fair environment, the more likely they are to stay in the company.

Protect your business

Laws and regulations are put in place to protect businesses, employees, and customers. For instance, data protection regulations safeguard people’s privacy, while Anti-Money Laundering laws help prevent financial crimes.

Ultimately, regulatory compliance protects your company against the financial losses, penalties, and reputational damage that a non-compliance scandal could cause.

 

How can Penneo help you achieve regulatory compliance?

Penneo caters to the needs of customers who are subject to the strictest regulatory compliance requirements.

Penneo SignPenneo KYC is a digital solution that automates CDD checks and simplifies AML compliance. With Penneo KYC, you can streamline the entire KYC process — from risk assessment and data collection to secure data storage. All information is end-to-end encrypted, so your clients’ data is always safe.

The system also checks individual clients and beneficial owners linked to clients that are legal entities against PEP and sanction lists. If a match is found, you will be notified so you can take appropriate actions, such as conducting enhanced due diligence on the client.

Penneo KYC stores all client data for five years from the end of the business relationship or occasional transactions. At the end of the period, the system automatically deletes the data. This ensures compliance with the data retention requirements set out by the GDPR and AML laws.


Penneo SignPenneo Sign is a digital signing platform that enables businesses to send, sign, and manage documents digitally in one place. With Penneo Sign, you can create digital signatures that meet the eIDAS requirements for advanced electronic signatures. This means that documents signed with Penneo are just as valid and legally binding as their hand-signed counterparts.

The platform allows you to secure your documents via end-to-end encryption. However, you need to check the option yourself when sending the files since the system doesn’t do it by default.

Penneo Sign also simplifies GDPR compliance by encrypting all information and documents stored in the system and letting users schedule automatic data deletion.

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