In today’s regulatory landscape, organizations are grappling with compliance across multiple frameworks, including the Digital Operational Resilience Act (DORA), Environmental, Social, and Governance (ESG) standards, the General Data Protection Regulation (GDPR), and the Network and Information Security Directive 2 (NIS2). These overlapping requirements create a web of challenges. Here are the top 10 pains companies face when tackling and reporting on these regulations.
1. Navigating Complex and Evolving Regulations
Each framework comes with its own specific requirements. Staying updated with regulatory changes and aligning processes accordingly is an ongoing challenge.
2. Data Silos and Fragmentation
Collecting data across departments and systems is difficult, especially when dealing with disparate sources for ESG metrics, GDPR personal data, and NIS2 cybersecurity information.
3. Lack of Standardization
Each regulation may require reporting in different formats or under different frameworks, leading to inefficiencies and confusion.
4. Resource Constraints
Small and mid-sized companies often lack the resources to dedicate teams or invest in tools for compliance.
5. Incident Reporting Overlaps
GDPR, DORA, and NIS2 all require incident reporting, but the criteria and timelines differ, complicating processes.
6. Ensuring Third-Party Compliance
Vendors and partners must comply with regulations like DORA and NIS2, but managing and verifying their adherence is complex.
7. Board and Leadership Engagement
Boards may lack the technical knowledge to oversee compliance, leading to gaps in governance and accountability.
8. High Costs of Implementation
Compliance often requires significant investments in technology, training, and consulting, placing strain on budgets.
9. Measuring ESG Impact
Quantifying environmental, social, and governance metrics in a meaningful way is often subjective and requires sophisticated tools.
10. Balancing Compliance with Innovation
Compliance processes can stifle innovation, particularly in industries where agility and speed are critical.
Strategies for Overcoming These Challenges
- Centralize Compliance Efforts: Use integrated platforms to unify reporting and data collection across regulations.
- Invest in Training: Educate employees and boards on regulatory requirements to improve engagement and accountability.
- Leverage Technology: Deploy tools for automation, risk management, and incident reporting to reduce manual workloads.
- Streamline Frameworks: Prioritize the most relevant reporting standards and find synergies between overlapping requirements.
- Engage Experts: Work with consultants who specialize in these regulations to ensure compliance and optimize processes.
- Monitor Third Parties: Establish clear contracts and conduct regular audits of vendors to ensure compliance.
By addressing these challenges head-on, companies can turn regulatory obligations into opportunities for improved governance, risk management, and stakeholder trust.