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We are barely a quarter into the year, and a lot has changed already in the world. These changes have a direct effect on business regulations and compliance in 2022. Changes in the workforce, in the environment, in technology, and politics will all have an effect on business regulations.
So, what are these changes? What has happened so far in 2022 that will have you looking up compliance consulting firms to deal with it? Read on to find out the biggest hitters affecting regulations.
Diversity is a good example of a systemic problem that needs to be tackled. The biggest job in compliance in 2022 is around creating a welcoming work environment from the ground up. It is also one of the most high-profile agendas due to its addition to the Environmental, Social and Corporate Governance concerns.
Everything from hiring to onboarding to ongoing training must be approached with diversity in mind, whether that’s about race, class, religion, physical ability, etc. This is a big job that will likely need a compliance consulting firm to handle.
Shifting individual accountability
Who is responsible when compliance is not met within a company? Should senior managers be fired for events happening outside of the workplace?
More and more, as the concept of the public loudly declaring who they will and will not back with their wallets, higher ups in companies are having to address these questions. Any given issue is met with the problem of understanding if this was a systemic problem or one lone individual and the issue of how to then act on it. The problems that businesses face in terms of compliance in 2022 is often around the fallout of any rule-breaking that has been made public.
The concept of working from home is not about to go anywhere anytime soon. It might have evolved into hybrid working, which allows employees to come and go as needed, but it’s here to stay.
It has created a new problem for compliance in 2022, as firms now have to face creating a system that allows for this fairer work-life balance and accommodates for isolating when needed, as it looks like it will be needed for a while, whilst also adhering to rules, established regulatory standards and obligations, etc.
As a result of this, cybersecurity risks have greatly increased over the pandemic, mostly due to the fact that anyone who could work were working from home. But it was a rushed job, with a lot of employees using their own laptops to connect business software to unprotected networks.
Considering that cyber attacks were described by the chair of the European Central Bank as “the greatest economic threat” that we are currently facing in compliance in 2022, it’s important that businesses nail down their cyber resilience. Risk and compliance functions will be required to ensure that businesses don’t face a devastating consequence of lagging in their cyber security.
Cryptocurrency is gaining momentum, since, as a concept, a coin lives and dies on hype. This can create a lot of new problems for businesses considering getting involved with the digital currency. It might be popular, but the concept is still wrought with risks and a complete lack of regulation. Compliance in 2022 will revolve around dealing with the dangers of scams, money laundering and other illegal activities involving digital currencies as part of a business’ ongoing cyber resilience.
Climate risk reporting
As the world becomes more aware of the effects of their carbon footprints and the effects of global warming, politicians and businesses are encouraged to create an industry that is as eco-friendly as possible. This has meant a lot of re-working of old ideas, like how everyday operations occur.
Businesses will have to reassess how the company affects the climate, and what can be done to change that. They will have to create climate goals, get expert advice, and shake up their approach to enact these changes.
Further than that, there are new reporting obligations enacted since the COP26 events, and there will be fines and remedial actions for failing to report any data points collected around the climate. That’s all without the reputational damage and personal liability consequences of failing to adhere to climate regulations.
Financial crime isn’t about to go away anytime soon. As long as there is money in the world, there will be people looking to gain that money illegally.
Concerns specific to compliance in 2022 are mainly circled around the effects of the pandemic on cybercrime, as outlined above, but world events also have had an effect on finances and opened the door for financial crime. Problems in Eastern Europe, China and Afghanistan are all concerning to finances.
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