Regulation is not only important for large companies, but also affects medium-sized companies, regardless of size. Compared to corporations, however, they have fewer resources and this increases the effort required to comply with laws, guidelines and internal company rules, i.e. the compliance effort. It is all the more important for medium-sized companies to set up these processes sustainably and efficiently.
Compliance generally stands for “conduct in accordance with applicable law”. In general, compliance in a company means adhering to the applicable legal provisions. But establishing internal company compliance guidelines can also be a competitive advantage for working with partners. In addition, compliance also plays an increasingly important role in the image of the company and the retention of specialists. Employees are attaching more and more importance to working with companies that, in addition to legal regulations, also comply with other standards.
Why is compliance important for small and medium-sized businesses?
Compliance is just as important to small and medium-sized businesses (SMBs) as it is to large corporations for a number of reasons:
Firstly, SMEs are subject to the same legal regulations as large companies, although implementation can be challenging due to limited resources. Failure to comply can result in fines, litigation and business disruption.
Second, compliance is critical to SME risk management . By complying with regulations, they minimize potential financial and legal risks. This protects the company from losses and enables sustainable business operations.
Third, compliance strengthens the trust of customers and business partners. They prefer companies that act ethically and in accordance with the law. Adhering to compliance standards increases credibility and improves the company’s image.
Finally, compliance can also contribute to operational efficiencies . By implementing internal controls and processes, SMEs improve their business operations, minimize fraud and abuse, increase transparency and ensure proper accounting.
Compliance digitization: 4 tips for small and medium-sized businesses
For small and medium-sized businesses that want to benefit from digitization in the area of compliance, there are some important steps they can take:
- Training employees in compliance: Digitization can only be effective if employees understand compliance requirements and the technologies used to meet them. Training can help ensure employees are able to effectively meet compliance obligations. There are various providers of one to two-day seminars that are worth investing in. Online training courses where employees just click through are quickly forgotten and are not enough to really understand the topic.
- Invest in digital KYC tools: There are numerous digital tools that can support companies in automating their KYC processes and that can be used at various points: There are tools that monitor changes in case law, others digitize the onboarding process of new customers Customers, and others, monitor transactions to identify suspicious patterns. All can help reduce compliance time and costs while improving accuracy and increasing fraud protection.
- Work with compliance professionals: For small and medium-sized businesses that do not have the expertise or resources to meet compliance obligations themselves, working with compliance professionals can be a valuable option. There are law firms and consultancies that specialize in the field. They can help organizations design and implement effective compliance programs while providing advice and guidance on the use of digital tools and technologies. Before you start working with us, find out exactly what the costs are and get comparable offers.
- Managed services replace manpower: If the employees do not have enough capacity to check suspicious cases, managed services are a good substitute. The large management consultancies offer complete packages for the entire KYC process. This includes both the appropriate software and advice from experts in the field.
Also Read: 7 Keys To The Successful Digitization Of Sales Processes