As we head into the final quarter of this year, your IT team is probably starting to look closely at upcoming regulatory challenges your organization may face. Staying ahead of the regulatory curve helps your team feel confident that your organization consistently maintains compliance.
2020 was a challenging year for nearly every type of organization and industry; and 2021 is going more smoothly on most fronts. For 2022, we expect that regulatory bodies will make moves toward significant changes.
Cybersecurity Compliance Will Be a Top Priority
Because 2020 and 2021 were record-breaking years in terms of the number and severity of attempted cyberattacks. Citing that more than 86% of organizations have been impacted by at least one successful attack, Retarus Corporates states,
“2020 was a record-breaking year for data lost due to breaches as well as the sheer numbers of cyber-attacks – and 2021 is already outstripping its predecessor.”
Following disasters like the SolarWinds compromise, regulators like CISA and the Securities and Exchange Commission (SEC), are updating their guidance for mitigating these types of events. Recently proposed rule changes regarding breach disclosure and investigations into breach events lead us to believe that public companies will see another regulator more involved in their cybersecurity efforts. We also see regulators on the state level, like NYDFS for example, pushing for increased security related to ransomware and publishing.
The bottom line is that regulations are likely to be updated and become more stringent in the coming year while cybersecurity incidents will be subject to greater scrutiny.
Which Industries Are Most Likely to Make Regulatory Changes?
Depending on your industry, you may have more work cut out for you than others. Each industry has its own set of regulatory concerns to which each organization must adhere, so it is important that you work with your legal department, or another regulatory specialist, to stay on top of all the changes within your specific industry. And 2022 will be no exception.
Industries like healthcare, financial services, and insurance have the most relevant regulations on the books and are the most likely to undergo changes. This is because there are ongoing efforts by policymakers to protect various parties, which include patients, customers, policyholders, and investors.
Healthcare Regulation Challenges
The healthcare industry is a consistently challenging and regulation-heavy industry. The array of regulations often seems overwhelming to those working in the healthcare industry since nearly every aspect of healthcare is overseen by some regulatory body — and often by more than one, or even several. Keeping up with these regulations can become dizzying for your IT team and you, so it helps to continually monitor the various bodies’ changes and new regulations so you and your team avoid surprises.
- HIPAA Concerns and New Technologies. The expanded use of telehealth in 2020 has pushed the boundaries of patient privacy issues and data security regulations. HIPAA regulations were relaxed to enable wider use of this technology in healthcare. Now, looking forward to 2022, we anticipate that HIPAA will be formally adjusted to allow the continued use of electronic devices for telemedicine while ensuring patient privacy and confidentiality.
- Affordable Care Act (ACA). The ACA makes frequent updates that you and your IT team need to monitor to stay in compliance. Since it is continually expanding, and imposes non-compliance fines, it is essential that you and your team stay on top of ACA updates throughout the year.
Financial Industry Regulation Challenges
The financial industry continually undergoes regulatory changes that keep your IT staff and regulatory experts busy. Knowing that keeping up with the financial industry’s regular regulatory shifts does not make it any easier for you and your team to manage their updates since there is little predictability, outside of the fact that there is predictability.
There are several issues that keep the financial industry regulators busy, and here are just a few that may impact your financial institution:
- The USA Patriot Act. This regulatory act serves to strengthen national efforts to monitor and prevent potential international money laundering schemes and any other efforts that serve to fund terrorism. Lack of compliance with the USA Patriot Act can result in harsh penalties, including financial fines that can soar to billions of dollars.
- Financial Industry Regulatory Authority (FINRA). FINRA is a regulatory body founded to help detect and Ponzi schemes and other illegal practices. Non-compliance with this regulation could cost your financial institution up to $100 million in fines.
Insurance Industry Regulation Challenges
The insurance industry is currently undergoing several regulatory changes that may affect your organization. It seems that more federal, state and international governing bodies want a chance to govern some aspect of your insurance business than ever before. Experts note that the impact could prove “tremendous,” due to the potential bureaucracy such oversight entails, as well as the aggressive tone already noted by regulators who want to impose their regulations.
Below are just a few of the many regulatory threats the insurance industry must tackle in the near future:
- Principal-Based Reserving (PBR). As a result of NAIC’s Solvency Modernization Initiative (SMI), PBR was designed to more accurately define the capital risks that life insurers assume in the policies they underwrite. Since it has gone into effect, insurance companies have been working to implement principle-based reserving.
Stay Up to Date on Upcoming Regulatory Challenges
Regardless of your industry, you, your IT team, and your whole staff can easily keep up with any regulatory challenges that may come your way. With vigilance and diligence, you can avoid fines while protecting your company, customers, patients, or any third-party stakeholders.
As long as you make compliance your key objective, regulatory challenges should not slow you down. Consider adding some of the following strategies to make sure you never miss a regulatory change so you can maintain compliance at all times:
- Educate Staff, Managers and Executives. Whether you call regulatory meetings or send out mass emails on regulatory matters, keep everyone who works on your regulatory team in the loop on changes to existing regulations, as well as any possible new regulations. Ask everyone to alert you and the rest of your regulatory team to news that they receive immediately.
- Monitor Your Competitors. Watch how they manage various regulations and adopt their best practices to stay up-to-date.
- Reach Out to Regulatory Experts. Consider hiring compliance officers, internal auditors, or engaging specialized consultants in regulatory auditing and compliance.
At I.S. Partners, LLC., our expert auditing team keeps track of regulatory changes in various industries. Whether you need help building your initial list of regulations, or if you need additional expertise to keep up in an industry brimming with changes, our team can step in to help you achieve all your goals and stay in compliance. Call us to learn how we can help.