3 essential steps for tech-and data-driven compliance

For a business team that has traditionally spent little time in the spotlight, the ethics and compliance function has been firmly center stage over the past two years against a backdrop of increasing risk and regulatory activity.

And that spotlight is only getting more intense amid new (or looming) regulatory actions and beefed-up enforcement of existing measures. Indeed, three-quarters of compliance leaders expect even more pressure ahead, as we reported in a recent KPMG survey of chief ethics and compliance officers (CCOs).

Beyond the sheer volume of activity and the tenacity of enforcement efforts, though, another factor is at work: an increase in the complexity of the issues a compliance team must track—and especially around technology.

With companies relying more and more each year on advanced and increasingly interconnected digital, data, and technology capabilities, compliance teams sometimes feel like they are playing a losing game of catch-up. And that was before emerging technologies like generative AI added exotic new risks to the ethics and compliance to-do list.

At the same time, more sophisticated data and technology approaches are exactly what many compliance teams need to navigate the cascading risks. Successful companies meet this new era of seemingly permanent regulatory churn head-on, as we detail in a new report, Implementing tech and data-driven compliance. 

To flip the script, CCOs and their teams must build the case for increased investment and innovation. Enhanced data, enterprise-level compliance systems, automation, AI, and upskilling staff all need to be addressed. As detailed in our new report, here are three steps to make that happen:

Top actions items for CCO

A big part of the challenge on aligning technology with evolving compliance risks is that the whole exercise can feel like trying to hit a moving target. Aim for these marks:

• Updating to robust, tightly connected compliance technology systems—a key point of emphasis for regulators
• Closing data gaps to improve accuracy and integrity and help ensure the enterprise technology systems work from clean data with ongoing governance
• Investing in people to address a persistent lack of compliance resources and a growing gap in digital-first capabilities

Top actions items for CCO

To integrate automation into compliance and increase organizational awareness of the compliance framework, CCOs need to prioritize:

• Enhanced data and analytics that can provide a real-time view of key performance indicators in ethics and compliance
• Predictive models, powered by AI and algorithms, that enable the compliance team to identify potential risks and run mitigation scenarios

Top actions items for CCOs

CCOs will benefit from viewing compliance investments as portfolios that are continually measured and optimized. To do that, compliance teams need to:

• Include quantitative data that demonstrates the return on investment data and analytics bring to leadership and stakeholders
• Prioritize resources to help monitor and measure the ongoing value of compliance

How KPMG Compliance service can help

KPMG’s Regulatory and Compliance Transformation services encompass a spectrum of innovative technology solutions, including:

• Compliance automation 
• Compliance controls 
• Regulatory change management 
• Compliance risk culture 
• Compliance target operating models