Many of us hear the terms compliance and risk management and assume the two terms are the same. While there is overlap between the two, it’s important to know the differences so you can assure your company is using each strategy to its full advantage. Both risk management and compliance help prevent threats to an organization’s legal structure and physical assets. There are a lot of misconceptions about risk and compliance. The assumptions from organizations are that if you’re compliant, you’re automatically able to protect against potential risks. On the flip side, there is a similarly incorrect assumption that if you’re risk program is already in place, your organization is already compliant by default. Now let’s explain both terms in more detail.
What is Compliance?
Compliance is the process of making sure your company and employees follow all laws, regulations, standards, and ethical practices that apply to your organization and industry. Corporate compliance covers both internal policies and procedures, as well as federal and state laws. Enforcing compliance helps your company prevent and detect violations of rules, protecting your organization from fines and lawsuits. Businesses and organizations strive to meet 100% compliance, but this is a complex process that takes hours of work and endless human resources if a proper system isn’t in place. Maintaining compliance allows your employees to do their jobs well, reach their career goals, and keep customers happy. In the end, your company can achieve its goals and grow faster.
What is Risk Management
Risk management is the process of making and carrying out decisions that will minimize the effects of risk on an organization. By focusing on risk and committing the necessary resources to control it, a business can protect itself from uncertainty, reduce costs, and increase its overall success. Cybersecurity risk, third-party risk, data privacy risk, and other forms of digital risk add to the uncertainty of achieving business objectives. The ultimate objective of digital risk management is to build digital resiliency, where an organization’s systems and operations are designed to detect digital threats and respond to them to minimize business disruption and financial losses. Digital risk management is an essential part of business management. It focuses on the threats and business risks and the IT systems supporting and processing them. Whether you’re trying to address cyber threats or third-party tools, digital risk is becoming a crucial part of business risk management.
The most obvious difference between compliance and risk management lies in their end goals. The end goal of compliance is to assure all rules are followed. Risk management aims to make sure there is money or insurance coverage in place to account for every risk a company could potentially face. Another difference between the two is the ability to react to risk. When it comes to compliance, an organization is trying to make sure rules are followed. If an organization only focuses on compliance, when something out of the blue happens, there’s a good chance they won’t have coverage. There are a number of security risks that, when not properly managed, can always lead to the organization suffering major loses. Project managers should have secure and well-configured platforms to reduce and control risks. The point of access is the key to everything. That’s why cybercriminals are targeting it so much. PAM is essential for all companies that are growing or have a large IT system. CyberArk is the global leader in privileged access security, a critical layer of IT security to protect data, infrastructure, and assets across the enterprise, in the cloud, and throughout the DevOps pipeline. CyberArk delivers the industry’s most complete solution to reduce the risk created by privileged credentials and secrets. CyberArk is considered the leader in Privileged Access Management globally, having the most advanced technology on the market. Contact SEGMENTECH today to learn more about how we can assist you with your risk management and compliance needs.