Even before the pandemic, challenges to effective compliance management were acute. Unexpected political outcomes, such as Brexit and the 2016 election of Donald Trump, led to major regulatory changes, overhauls which left businesses catching up.
Nor had businesses completely recovered from the previous systemic shock: the global financial crisis of the late 2000s. Following that crisis, national and supranational bodies issued sweeping financial reforms.
The years 2009 to 2012 saw more than 50,000 regulations sweep across the G20. That number rose to 50,000 in the year 2015, according to the London-based think tank, JWG.
Those regulations had the effect of upping the ante on compliance management, especially on the cost side. Compliance with the Dodd Frank Wall Street Reform and Consumer Protection Act cost banks USD 36 billion, according to the publication, Trade. All told, regulatory compliance cost banks USD 100 billion in 2016.
Financial regulation, though significant, isn’t the only contributor to ever-increasing compliance costs. Australian enterprises spend around AUD 94 billion to administer and comply with public sector rules.
Besides adhering to external edicts, companies also develop their own set of rules, regulations, policies, procedures, and by-lines. Compliance with these internal mandates have cost implications, as well. Australian enterprises spend around AUD 155 billion to administer and comply with self-imposed rules and regulations, according to Deloitte.
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