When to Engage Regulatory Compliance Consulting

Businesses face unprecedented challenges in maintaining compliance across multiple jurisdictions and rapidly evolving legal frameworks. We will explain the critical role of regulatory compliance consulting and provide strategic insights into when and why organizations should seek expert guidance to navigate the intricate world of regulatory requirements, mitigate risks, and ensure sustainable business growth.

It can be understandably frustrating to stay on top of regulatory risk compliance, especially because it seems like new standards always arise. At the same time, however, the stakes couldn’t be higher. Financial penalties and the risk to your reputation are compelling reasons to ensure a tight compliance alignment system. To meet these challenges, many successful organizations use regulatory compliance consulting.

Compliance issues have become more complicated in recent years because the laws have changed, and different jurisdictions have begun building their standards. For example, suppose you do business with a company in the European Union. They need to safeguard their data under rules outlined by the General Data Protection Regulation (GDPR).

What will you do if your company stores emails their employees send, and in one of those communications, an employee expresses a political opinion? Under GDPR, political opinions are classified under protected personal data. Therefore, you’d need to have systems in place to handle this kind of information properly.

This is only a hypothetical example, but it underscores the level of thoughtfulness needed to avoid problems. In many situations, it makes sense to secure the help of a regulatory compliance consultant. Here are some situations that may make this the wisest step.

Call In a Regulatory Compliance Consultant

When Facing a Compliance Audit or Investigation

The risks of being unprepared for a compliance audit or an investigation are considerable. You can get fined by a governmental agency or halt your operations until you redesign your systems according to compliance regulations. Also, your reputation could take a hit if word gets out that you had compliance hiccups.

When you hire a regulatory compliance consultant to provide guidance, you get someone familiar with documenting and remediating compliance issues. They understand the issues that may be problematic during an audit and how to address them. A compliance consultant can also outline processes you can use to save time and resources. Expert consultants understand compliance regulations inside and out and how they apply to your infrastructure.

Some processes a consultant may be able to help you with include:

• Establishing security procedures, such as documenting your policies regarding encrypting data, responding to incidents, and accessing controls
• Identifying vulnerabilities by taking into account the most recent attack methods
• Documenting breaches, which may include producing incident logs, performing forensic analysis, and establishing attack timelines

When hiring an expert, you take a proactive approach instead of fighting fires after they start. This prevents issues that could cost money or interrupt your operations. You also take a powerful step in earning the confidence of business partners and customers.

When Scaling or Expanding Your Business

Every time you expand into a new market, you must also consider the new rules and obligations this may introduce. Even though many compliance laws follow some of the same principles, they often differ in the details.

For this reason, it can be very difficult to manage compliance across multiple jurisdictions. Something relatively innocuous in one area may completely cross the line in another. If you do business with a company under a different jurisdiction, you could expose yourself or yourself to significant risks.

Consider this example: when a customer asks you to delete the data you’ve collected from them. Under CCPA, you may not have to comply if you need to use their data to debug an error or fix a problem in your cybersecurity system. On the other hand, GDPR includes a strict “right to be forgotten” policy.

Keeping customer data to fix your system may not be a valid excuse. As a result, you may be in the clear with a client in California but face legal exposure from a client in Europe. It can be difficult to track which regulations apply and how to use those to guide your expansion or scaling.

On the other hand, by hiring regulatory compliance consulting services, you can address potential issues long before they arise. Experts have a broad knowledge of regulations worldwide and understand how to avoid misaligning your practices with what’s acceptable in different jurisdictions.

While Implementing New Systems or Processes

It’s common for technology or process changes to introduce compliance risks. For example, suppose you’re migrating to a new software system. You need to understand:

• How that software stores data and where, such as in an external server, one at your business, or on each user’s device
• The kinds of encryption, if any, the software deploys to protect sensitive information
• Whether the software gives users the ability to delete data the system stores and, if not, how your employees can erase sensitive data permanently

A similarly thoughtful approach is necessary when adopting cloud platforms or using automation to upgrade workflows. Any solution that stores or transmits data, including those that share it through integrations, may present compliance issues.

When you bring consulting services on board, you can embed compliance immediately, ensuring any new technologies or innovations don’t expose you to excess risk. For example, a regulatory compliance professional can outline the most effective encryption protocols to protect customer data. They can also help you understand how to structure your digital architecture best to align with multiple compliance regulations.

When Preparing for Mergers, Acquisitions or Partnerships

When engaging in a merger, acquisition, or new partnership, it’s easy to introduce several compliance risks accidentally. Several unique considerations should be at the forefront of the mind during the due diligence process. Some of these may include:

• Whether an organization you’re acquiring or partnering with properly stores payment information and other sensitive data.
• Why an organization you are acquiring stores customer information. If, for example, they keep it only because they think they may need it in the future, they may fall out of compliance with standards such as the California Consumer Privacy Act (CCPA).
• The cybersecurity tools the other company uses to protect its data. If the protections are outdated or inefficient, you may need to include an upgrade as a condition in your merger, acquisition, or partnership agreement.

At times, hidden risks may exist, and the only way to surface them may be to hire a regulatory compliance consultant. For example, a European company you’re considering partnering with may not have attained proper consent when collecting personal data from customers.

As a result, their data is essentially illicit, and they may have significant legal exposure. By partnering with them, you may, without knowing it, assume the legal liabilities that come with their faulty consent-acquisition system. Therefore, a lawsuit against them becomes a lawsuit against you.

The legal landscape is especially complicated for companies in the U.S. due to the vast array of security standards that apply to mergers and acquisitions. For instance, healthcare organizations providing patient care must abide by Health Insurance Portability and Accountability Act (HIPAA) regulations.

Further, these standards apply to an organization and entities it partners with, including those it associates with during an M&A deal.

For instance, suppose your organization is thinking about acquiring a small but profitable medical practice. According to the “Notice Distribution” section of the HIPAA Privacy Rule, before moving forward, you need to know exactly how the practice collects data from patients, including how they ask for patient information. If the practices or policies are out of compliance, you may face legal issues down the line.

What does this mean for M&A deals in general? When considering a merger or acquisition, you need to deeply understand the other organization’s cybersecurity system and how it protects sensitive data. This may include critical considerations such as the organization’s:

• Compliance with HIPAA, PCI DSS, SOC 2, ISO 27001, GDPR, or other applicable standards
• Data retention policies for all forms of sensitive personal information
• Encryption standards, including the specific protocols they use to encrypt different types of data
• Supply chain risk management procedures
• Network monitoring systems used to detect potential breaches
• Incident response plans used during and after a breach
• Access control policies, such as role-based access controls and those employing zero-trust principles
• User authentication systems for both on-premise and cloud-based applications
• Audit history and results, as well as any pending audits
• Unresolved compliance issues, whether they arose out of an external audit or an internal review.

For instance, does a company you’re considering merging with have computers that run an Apple M3 processor? If so, have they figured out a workaround to eliminate the GoFetch vulnerability? This enables malware to steal data directly from the memory cache of the target computer. It could raise serious compliance issues after a merger, especially because it can make it easy for hackers to steal sensitive data.

The steps needed to avert a GoFetch attack vary based on the process being run, but before signing on the dotted line, you need to know:

1. Which processes depend on data that could be exposed to GoFetch malware
2. How the organization detects and prevents the installation of all malware
3. What the organization does to prepare its employees to avoid phishing attacks
4. How the organization detects and then stops data exfiltration attacks

There are many compliance issues to consider — many of which, unlike GoFetch attacks, may not have gained infamy. An effective way to stay a step ahead is to use compliance consultation services.

Use Regulatory Compliance Consulting to Strengthen Your Organization

There’s never a wrong time to engage with regulatory compliance consulting, especially because the landscape changes quickly. Getting started early can make the difference between success and failure when scaling your business, implementing new systems, passing an audit, or negotiating a deal with another organization.

Engaging in regulatory compliance consulting services is about protecting your business and increasing your chances of long-term success.

You know you need to protect your brand and financial stability by prioritizing cybersecurity. But do you know where to start? Our Cybersecurity team is ready to help you focus on everything from strategy development to penetration testing.

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