Meeting regulatory compliances is costly, labor-intensive, and error-prone when done manually. Robotic process automation (RPA) can automate this process to improve compliance.
Why it’s important:
Failing to meet compliances can have significant cost and operational impacts. RPA can ensure your organization is meeting compliances while also saving time and money.
- What is Compliance?
- Consequences of Noncompliance
- What is RPA?
- 7 Ways RPA Improves Compliance
What is Compliance?
Simply stated, compliance means conforming to rules, policies, and regulations to maintain data integrity, data security, and safeguard the privacy of employees and customers. Compliance issues vary across departments and industries.
Common compliances per industry/business area include:
- Healthcare: HIPAA (Health Insurance Portability and Accountability Act) and the HITECH Act protect patient privacy, which requires healthcare organizations to protect patient data
- Critical areas for automation include scheduling, billing, record management, remote care, document digitization, and data entry
- Banking: Equal Credit Opportunity prohibits lenders from discriminating against credit applicants, establishes guidelines for gathering and evaluating credit information, and requires written notification when credit is denied
- Fundamental areas for automation include customer onboarding, report generation, trade finance, bank reconciliation, and application processing
- Insurance and Financial Services: The federal Gramm-Leach-Bliley Act (GLBA) regulates how financial institutions, and their affiliated companies, safeguard their customers’ and consumers’ personal information
- In relation to finance, areas for automation include quote to cash, procure to pay, and record to report
- HR: Anti-discriminatory compliances prohibit employers in all industries from taking negative employment actions based on race, color, sex, ethnic origin, disability, or age
- Areas for automation include the tracking and updating of employee information, onboarding, performance management, and payroll
Consequences of Noncompliance
Federal and state laws as well as internal policies and procedures fall under the umbrella of compliance. With the volume and variability of regulations businesses need to follow, meeting compliance can seem like a moving target. Nevertheless, failure to comply sends up red flags, increases the threats of financial liability, and probable lawsuits.
Repercussions of noncompliance:
- Financial penalties: The cost of noncompliance is staggering. A sole noncompliance event can cost businesses an average of $4 million, while the cost of total noncompliance is $14 million
- Piercing the corporate veil: Courts may determine that the individuals who own or oversee the business are personally accountable for the debts or legal wrongdoing of the company
- Compliance audits: Business owners and employees get pulled away from doing revenue-generating work to conduct compliance audit activities
- Suspension or termination: Depending on the severity, a noncompliant company may be forced to suspend operations or shutter altogether
What is RPA?
Robotic Process Automation (RPA) is the use of software bots to complete tasks that previously required humans to do. RPA handles digital, repetitive, and rule-based jobs. RPA has many business functionalities, but an area growing in popularity is compliance. Evidenced in a study where 66% of companies surveyed planned to increase RPA software spend, the usage of software bots to improve compliance is likely to rise.
How RPA Can Help Improve Compliance
RPA aids in increasing efficiency of a compliance program by strengthening business operations, helping to reduce legal issues, and saving companies time and money. The improved productivity linked to the automation of basic business practices is driving businesses of varied sizes to utilize RPA or enhance their current RPA solutions.
7 ways RPA Improves Compliance:
- Automatically update regulation requirements: In a KPMG survey, 60% of organization leaders reported that they do not use automation to stay up to date on regulation details, which are frequently modified by policy makers. RPA bots can scrape policy makers’ websites, extract news about regulations, and update regulation data in the organization’s internal regulation databases.
- Accuracy every time: Once a robot learns a task, it can repeat it exactly the same way time after time while being 100% accurate, allowing organizations to maintain higher levels of compliance across the enterprise
- Data precision: Automated data extraction from multiple sources and formatting helps increase speed and efficiency, reducing the chance of data errors
- Security: RPA can eliminate unauthorized access to privileged data
- Audit Trail: Robots log every single action they perform, allowing organizations to have a 100% accurate audit trail to references when compliance issues arise
- Name screening: Regulators intensely scrutinize this information for crime compliance. RPA can automate this with ease
- Save time and money: Removing humans from compliance requirements can save businesses time and money. The Institute for RPA estimates that RPA solutions can deliver immediate savings of 25% to 40% in labor costs alone
Automating your Compliances
Error-prone, mundane, and time-consuming tasks handled by humans are the best candidates for RPA; compliances are a perfect candidate. RPA increases the efficiency and accuracy of compliance, freeing businesses from the worry of noncompliance consequences. The importance of meeting compliances and their ever-changing nature will continue to be a driving force for organizations to automate; the results are proof that automation is not a short-term solution, but the future of compliance.
To learn more about using RPA to help meet your compliances, check out Infostretch’s Automation services or get in touch with us directly using the form below.