What Is Compliance Monitoring?

As technology continues to take over business productivity, procedures, and consumers' daily lives, compliance standards have expanded to protect data and safeguard user privacy. Increased complexity of compliance regulations and demands force organizations to monitor infrastructure for any violations. Compliance monitoring solutions scan resources to ensure data protection follows standards and business operations fulfill obligations.

What Is the Purpose of Compliance Monitoring?

Most regulators in the US and the UK require compliance monitoring in some form. For example, the UK Financial Conduct Authority requires proof of a compliance monitoring plan before approval in the financial market. Simple monitoring is not enough for most organizations, so they need a thorough understanding of requirements and constant oversight of how data is processed and handled. Infrastructure continues to grow, and monitoring is the only way to keep up with all changes and risks.

Even when regulations don't require monitoring, organizations still use it to avoid hefty fines for violations. Regulators put significant fines on simple violations that accumulate for every compromise based on the organization’s failure to put proper protections in place. For every recorded violation, the organization could accumulate millions in fines. Fines aren’t the only issue. An organization could face litigation and be forced to pay monetary settlements if business processes are found to violate standards.

Typically, an organization uses a team of people to monitor procedures to ensure compliance, but some monitoring can be automated. Utilizing both manual and automated monitoring, an organization can ensure that data privacy is maintained, and compliance standards are followed for every regulation standard the organization must follow.

What Is Government Compliance Monitoring?

For government agencies, monitoring is crucial to protect the public sector’s data. Many state-sponsored threat actors target government agencies, and it can be devastating to the public. Most countries define regulations and data protection standards for government entities to protect employees and user data from unauthorized access from state-sponsored attacks.

It’s challenging to monitor government infrastructure when most of it is legacy with massive amounts of data that spans decades. Government compliance monitoring will find vulnerabilities and mistakes in the ways employees and officials handle data. Since government data is usually stored across several legacy systems, monitoring is done manually and automatically to find instances where threat actors can obtain unauthorized access. It also reveals cases in which data could be mishandled, giving internal threats an opportunity to steal or disclose data improperly to a third party.

The public sector is often subject to inspections, so monitoring ensures that the agency passes the next inspection. For example, the US Environmental Protection Agency (EPA) inspects organizations for pollution control devices, operating conditions, and material compositions. Interviews involve reviewing records, talking to site representatives, taking photographs, and observing site operations. A government compliance monitoring system ensures that this audit will run smoothly and the agency pass, avoiding hefty fines for non-compliance.

Who Is Responsible for Monitoring Compliance?

The organization must take a collaborative approach to monitor compliance, but most users need guidance. Depending on the organization, compliance monitoring may be managed by an in-house individual or planned and supervised by a third-party consulting team. Whether it’s in-house or through a third party, employees and management must be involved with the entire process.

Employees must be educated on the importance of compliance and how to carry out procedures that align with regulations. Informed employees are accountable for compliance and to their managers. Managers occasionally audit employees to ensure that they always adhere to compliance regulations.

Larger enterprises create a specific role for compliance monitoring, typically supported by a third-party consultant company to ensure that all requirements are met. This role is critical in financial institutions where FINRA (Financial Industry Regulatory Authority) defines monitoring of its regulatory requirements. Compliance standards are often updated and changed throughout the years, so the role of a compliance officer will include staying up to date with the latest changes.

Creating a Compliance Monitoring Plan

Monitoring for compliance requires a plan and then the right team to implement it. Before a plan is created, the organization should identify all risks across infrastructure and business practices. Regulatory bodies develop standards to safeguard data, but you must know what areas of the network are at risk to implement them. This risk profile can then be used to mold a monitoring plan that fits business needs.

Monitoring the organization requires comprehensive testing, so your plan should detail what will be done to audit and review all procedures and data. Monitoring is usually a combination of manual auditing and automated scans that detect failures to store data that aligns with regulations.

A plan will:

  • Outline testing procedures and any automated programs that find mistakes
  • Define who will be responsible for overseeing compliance implementation
  • Determine the frequency of testing
  • Cover all auditing and logging controls used for testing

Priority is given to resources that pose the greatest risk. For example, financial data carries a higher risk and therefore requires more protection than an office printer. The printer should still be protected from eavesdropping, but the financial system is a more valuable target to attackers. Successful data breaches against a financial system also carry more severe consequences.

Reports are also necessary for monitoring. A compliance officer will keep track of any issues using reports from automated scans and make changes to procedures if necessary. The compliance officer works with a risk assessment team so that monitoring covers all aspects of corporate infrastructure.

Because compliance standards are constantly changing, the compliance officer and team amend policies every year. When regulators make changes to policies, the organization is given a set amount of time—sometimes years—to apply updates to the system. Monitoring solutions should be flexible enough to change according to new guidelines.