What Is Compliance Monitoring?

Compliance monitoring refers to the quality assurance tests organizations do to check how well their business operations meet their regulatory and internal process obligations. This need to monitor compliance performance is often a regulatory requirement; regulators like the UK’s Financial Conduct Authority or the International Organization for Standardization require firms applying for approval to operate to detail their compliance monitoring plans, for instance. Ongoing, the robustness of organizations’ monitoring programs can form a central tenet of compliance with the rules that govern them. Typically, a dedicated compliance team will be responsible for tracking compliance and monitoring day-to-day activities, using relevant compliance tools, making everyday activities easier to control. This is achieved with an internal audit also providing additional checks and rigor, particularly in larger or more complex entities.

What Does Internal Monitoring of Compliance Ensure?

Internal monitoring of compliance ensures that your staff follows company policies and procedures. While auditing verifies that the necessary controls are in place, it’s through monitoring that you can determine whether or not staff are following those controls in their daily activities. This helps organizations guard against liability, data breaches, and costly regulatory fines like HIPAA penalties.

The compliance monitoring program’s extensiveness depends on the organization’s size. A smaller company might rely on a single compliance person. In contrast, larger organizations might have an entire compliance and audit team responsible for establishing the compliance audit strategy and continuous monitoring. In both cases, policy management technology can help ensure that policy administration is streamlined and verifiable for easy, accurate reporting. 

Elements of a Compliance Monitoring System

There are different ways to monitor compliance. When applied together, each review makes for a more cohesive compliance monitoring system that proactively identifies risks. Include each of the following in your organization’s compliance best practices.

Operational and Performance Reviews

Documenting your policies and procedures is one thing. But that doesn’t mean your employees follow these processes or are as effective as you think. Though performance reviews don’t fall directly under the compliance team’s oversight, an employee can and should be evaluated based on their level of compliance. 

Performance reviews should occur at set intervals and follow a prescribed measurement approach related to each employee’s duties. These reviews should also help evaluate communication or operational issues, HR procedures and anything else that might get in the way of compliance. 

Policy Reviews

The business landscape changes quickly. Regulations evolve, as do technologies and ways of working. That means an effective and compliant policy one year might be outdated the next. Effective compliance systems should review the organization’s policies and procedures at least once a year. 

Compliance teams can divide and conquer how they review policies and procedures by prioritizing the areas of most significant risk first, so long as all policies are reviewed within the year. Extensive organizational changes or new laws impacting the organization should also trigger a policy review.