Businesses are grappling with unprecendent levels of compliance, creating significant new risks and exacerbating old ones. Here’s how to meet the challenge head on

The regulatory landscape is facing unprecedented challenges as lawmakers continue to react and adapt in response to new technologies and a more global economy.

In many cases, these regulations are necessary, like implementing sanctions on countries such as Russia in response to the conflict in Eastern Europe. 

Compliance (3)

However, this is adding to the significant compliance headaches facing businesses, particularly those that operate internationally.

Over half (53%) of UK businesses have been forced to reject potential customers due to a lack of risk visibility.

A further 61% stated that excessive workloads are forcing them into reactive firefighting instead of proactive risk management, Dun & Bradstreet research finds.

Key findings

  • Over half (53%) of UK businesses have been forced to reject potential customers due to a lack of risk visibility
  • Demand on compliance team’s time has increased by 30% in the past year
  • 67% agree that over the past year, regulatory demands on their compliance team have significantly increased
  • 61% said they will increase compliance team headcount this year.

The study of compliance decision makers revealed increased pressure on compliance teams, with a 28% increase in demand on their time over the past year.

Despite this, 55% of businesses had no additional budget to dedicate towards compliance activities, highlighting the discrepancy between complying with an evolving regulatory landscape, budget constraints and the need to invest in technology to enable companies to meet these increasing demands.

The survey also revealed that 48% of UK businesses do not have appropriate Perpetual KYC or Always-On Compliance solutions in place, with 52% of compliance teams saying their workload relies on inefficient manual and routine tasks.

How to tackle the risks

Leveraging technology, particularly the power of data insights, will be critical for expediting risk analysis and speeding up intelligent compliance decision making, according to over two-thirds (69%) of respondents.

A further 70% of UK businesses also noted that automating their operations saves time and reduces cost.

Respondents also point to how the use of data and automation can lead their teams to have more time for high-value tasks with 64% stated that leveraging automation tools for periodic checks enables them to spend time on more complex or ambiguous cases.

Dun & Bradstreet’s research also indicates 64% are investing in AI solutions to streamline compliance processes and enhance risk assessment while mitigating the increased cost implications.

Stuart Swindell, strategy director of third-party risk and compliance at Dun & Bradstreet, UK&I said: “A lack of harmonisation and increasing regulatory demands, coupled with inadequate technology, means compliance teams are forced to invest excessive time and effort into manual tasks. This not only reduces their efficiency but leaves them vulnerable to errors and oversights, which could otherwise be avoided.

“The evolving challenges faced by UK businesses are evident, with over half having to turn down new projects due to lack of risk visibility. Yet, by embracing data insights and automation, they can navigate these hurdles and make smarter decisions, which will allow for a more seamless compliance process, and free up time to explore more high-value or growth opportunities.”