What is regulatory mapping?
Regulatory mapping is the process of identifying, tracking, and managing regulations that impact a business. It involves creating a comprehensive inventory of relevant laws, rules, and guidelines, and continuously updating this inventory as new regulations emerge or existing ones change.
Regulatory mapping is integral to compliance functions, which have grown significantly over the past two decades due to increased legal and regulatory scrutiny, particularly the financial services sector. This growth necessitates robust systems to ensure that businesses remain compliant and mitigate risks associated with regulatory changes. New regulations and changes in regulations need to be mapped to policies, procedures and internal controls – hence the term, regulatory mapping.
The importance of regulatory mapping
Regulatory compliance
Regulatory mapping helps organisations stay compliant with the regulatory obligations that apply to their operations. Non-compliance can lead to severe penalties, legal actions, and reputational damage.
Risk management
By keeping abreast of regulatory changes, businesses can proactively manage risks and avoid unexpected compliance issues.
Operational efficiency
Effective regulatory mapping streamlines compliance processes, reduces the burden on legal and compliance teams, and allows for more efficient allocation of resources.
Building an effective regulatory mapping process
- Identify relevant regulations
- Continuous monitoring of regulations
- Analyse and interpret regulatory changes – impact analysis
- Implement changes, once relevant changes are identified ensuring they are correctly mapped
- Leverage regulatory technology, or regtech, as this makes is easier to manage large volumes of data and provide real-time updates.
Challenges in regulatory mapping
Despite its benefits, regulatory mapping presents several challenges.
- The sheer volume and complexity of regulations, especially for businesses operating in multiple jurisdictions, can be overwhelming.
- For international regulations, language barriers can pose significant challenges. Accurate translation and interpretation are crucial for effective regulatory mapping.
- Ensuring that regulatory changes are seamlessly integrated into business processes requires coordination across various departments and functions.
Regulatory mapping is a critical component of an organisation’s compliance strategy. By systematically monitoring, identifying and tagging, tracking and managing regulatory changes, businesses can ensure regulatory compliance, manage regulatory risk, and improve operational efficiency.
Regulatory technology can significantly enhance the effectiveness of regulatory mapping, turning compliance into a strategic asset rather than a mere cost centre.
For organisations aiming to stay ahead in a complex regulatory landscape, investing in a robust regulatory mapping solution is not just a necessity—it’s a strategic imperative.
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