Global Compliance Regulations to Cost $204bn in 2026 – Study
The cost of compliance regulations globally is expected to rise by $204billion in 2026, a new study as revealed. Giving fresh insights into the rising cost of compliance regulations and regulatory technology on yesterday was Samantha Padayachee, Managing Executive Group Compliance, Vodacom, South Africa.
She spoke at the third edition of the International Compliance Congress hosted by the International Federation of Compliance Associations (IFCA) in Johannesburg, South Africa.
According to her, increasingly, the world is faced with challenges of compliance regulations made complex by new technology processes, and the inevitable cost.
Citing Juniper Research, Padayachee said, the global regulatory technology spend will account for 50% of all regulatory compliance spend for the first time.
It claims the spend will grow from $68bn in 2022, representing a growth of more than 200% over the next four years.
Money laundering and terrorism financing is a complex issues for many organisations these days and little wonder a lot more efforts must be put in place to mitigate the rippled negative effects of poor compliance regulations, she said.
The COVID-19 pandemic remains problematic for many compliance teams within financial services firms. As an uneven recovery continues, the adoption of technology, digital transformation, and hybrid working appear to be permanent changes that are leading many firms to reassess their approach to compliance.
In her keynote address, Sonja Blignaut, a Complexity Consultant based in South Africa said compliance officers face complex problems.
According to her, compliance practitioners are disadvantaged given the massively complex challenges they face as they combat things like terrorist finance, money laundering, and corruption.
In order to safely navigate the complex landmines, Blignaut, who is the Founder of More Beyond said compliance officers need to understand Prof Dave Snowden ideology of COOL, which means courage, openness, observing as well as lightness.
These templates, she said, would address otherwise complex situations within the compliance space.
Speaking earlier, Pattison Boleigha, president of Compliance Institute, Nigeria (CIN), the umbrella body of compliance professionals in the country, while alluding to the theme of the three-day conference tagged: ‘Compliance in an era of Global Complexity,’ said compliance regulations if done properly can ensure good return on investment (ROI).
“Businesses are set up to make profit but it must be done in such a way that it follows laid down procedures in order to reduce the cost of paying for compliance,” he said.
Pressed further, he was however, quick to add that compliance return on investment is not a one-size-fits- all kind of thing across the globe, but it is just only evolving in a place like Africa.
“We have to start thinking of compliance as an investment. That’s the only way we can reap the benefits. There is no global benchmark for measuring compliance. It’s done on a metrics by metrics basis. It is based on your compliance cost such as staffing, cost of non compliance arising from penalties, fines, reputational damages and all of that. We need to be able to put all of these down in numerical terms to compute our return on investment,” he stressed.
The duo-Jonny Frank and Chris Hoyle, both of Stone Turn, USA, they said compliance returns on investment ensures profit maximisation, power and prestige and personal safety nets for businesses.