Future of Compliance: 2024’s Essential Cybersecurity Insights

Compliance Trends and Timeline for Regulations in 2024

From data security standards to privacy laws and emerging technologies, staying abreast of the evolving regulatory compliance trends landscape is crucial. Here’s a comprehensive overview of key milestones set to take effect in 2024, along with predictions for how these changes will shape the compliance landscape.

We’ve gleaned insights from a recent GRC webinar and other industry findings.

1. ESG is Becoming an Integrity Measure

Environmental, Social, and Governance (ESG) risk becomes a crucial metric for organizational integrity. A strong emphasis is placed on doing the right thing, with Europe notably ahead of the U.S. in ESG adoption. 

ESG is a barometer of an organization’s commitment to ethical behavior and sustainable practices. Beyond financial performance, ESG metrics reflect how companies manage environmental risks, foster social inclusion, and uphold governance standards. Compliance efforts that overlook ESG considerations risk falling short of stakeholder expectations and regulatory requirements.

While ESG adoption is gaining momentum globally, regional variations exist. Propelled by stringent regulations and investor pressures, Europe leads in ESG integration. In contrast, the United States is witnessing a gradual shift driven by investor demands.

2. Accountability for GRC Professionals and Senior Management

Accountability takes center stage, spotlighting GRC professionals and senior management. Regulatory bodies, including the SEC, DOJ, New York, and California entities, increasingly hold business stakeholders and leaders accountable. Real-world examples, such as the case of Uber, highlight the growing scrutiny of the actions of senior management.

In this light, senior management bears ultimate responsibility for compliance governance and oversight. They are accountable for setting the tone at the top, establishing a culture of compliance, and allocating resources to support effective risk management practices. Senior executives must actively engage with GRC professionals, oversee compliance initiatives, and ensure timely remediation of compliance deficiencies.

3. Global Workforce and Supply Chain Oversight

The modern business ecosystem is increasingly globalized, with companies operating across diverse geographic locations and engaging with many stakeholders. This globalization extends to the physical presence of offices or manufacturing facilities and to the virtual realm, where remote workforces and digital supply chains are becoming the norm rather than the exception. As a result, the boundaries of the traditional enterprise are blurring, giving rise to a more expansive and interconnected landscape.

Within this expanded enterprise paradigm, organizations are no longer solitary entities but nodes within a complex network of interconnected entities. These entities encompass employees and contractors, suppliers, vendors, partners, and third-party service providers, each playing a crucial role in the organization’s operations and value chain. 

Regulators are increasingly focused on the extended enterprise, holding organizations accountable for the actions of their suppliers, vendors, and other third-party entities.

Companies will have various options for designing supply chain compliance solutions tailored to their unique business models and corporate cultures. Establishing a centralized collaborative approach will facilitate governance and oversight across global entities. Alternatively, engaging third-party providers for supply chain compliance managed services offers a cost-effective solution, particularly for resource-constrained organizations.

4. Geopolitical Risks Step on to Center Stage

Geopolitical risks were not on the average GRC radar a few years ago, but that has changed. These risks have emerged as a paramount concern for organizations. The intersection of geopolitical and IT risks has become increasingly pronounced, highlighting the need for a holistic approach to risk management. Factors such as inflation, economic disasters, wars, and climate events further exacerbate the complexity of the risks organizations must navigate in today’s globalized world.

Global dynamics have evolved rapidly, driven by geopolitical tensions, trade disputes, regulatory changes, and shifting global alliances. These developments have far-reaching implications for businesses operating in diverse sectors and regions, necessitating a reassessment of risk management strategies.

The convergence of geopolitical and IT risks presents unique compliance challenges for organizations. Geopolitical events s can disrupt supply chains, impact market access, and introduce uncertainties that affect business operations. In parallel, cyber threats, data breaches, and information warfare pose significant risks to digital infrastructure, intellectual property, and sensitive information.

5. AI in GRC: Leveraging Cognitive Benefits and Managing Risks

The extensive use of artificial intelligence (AI) and automation will emerge as the cornerstone of compliance strategies in 2024. With 54% of respondents in the Accenture Compliance Risk Study acknowledging the strengthening role of AI, there is a consensus that these technologies enhance efficiency, reduce errors, and automate manual tasks.

Compliance teams are urged to leverage generative AI to analyze complex regulatory documents to streamline tasks such as policy interpretation, gap identification, and providing quick responses. The potential for AI to address critical pain points, including policy analysis and merger and acquisition support, positions it as an indispensable tool for compliance professionals.

Anticipation grows around enforcing AI regulations, particularly in the European Union (EU). The EU is set to introduce a legal framework for AI in Q1 2024, focusing on safety, fundamental rights, and market unity. Compliance leaders in the EU must proactively prepare for these regulations, aligning risk management and regulatory practices. Meanwhile, the U.S. and the U.K. are also witnessing developments, with President Biden’s Executive Order on AI and the establishment of the AI Safety Institute in the U.K. Compliance professionals must stay informed on evolving standards and regulations to ensure organizational alignment and compliance with new federal requirements.

6. Higher Complexity and Lower Budgets

Compliance departments face a challenging paradox in 2024, as the complexity of their responsibilities increases while resources diminish. A substantial 57% of compliance teams report budget reductions or transformation efforts on hold. As compliance leaders seek to achieve more with less, efficiency, technology, and agility become paramount. The imperative to balance competitive demands with compliance mandates is evident, and compliance programs are urged to innovate or risk faltering. Embracing change, championing efficiency, and leveraging compliance technology trends are emphasized as strategies to navigate the evolving risk and compliance landscape.

7. Corporate Sustainability Regulations Reshape Compliance

The EU’s introduction of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD or CS3D Directive) herald significant changes in how companies approach human rights and environmental impact. These directives, predicted to come into force in 2024, compel companies, including those outside the EU, to scrutinize their effects on human rights and the environment throughout their supply chains. Compliance professionals are tasked with navigating these stricter rules, emphasizing third-party risk management and transparency. Organizations failing to address sustainability concerns may face financial and legal consequences, highlighting the need for comprehensive compliance programs.

Compliance Timeline for 2024

January:

• EU Data Act Implementation: Get ready to align with the latest data management and privacy regulations across the European Union.

• Utah Consumer Privacy Act (UCPA): Brace yourself for the dawn of enhanced consumer data protection measures in Utah as the UCPA takes effect.

• Oregon’s Data Broker Registration Law: This one is for you, data brokers. Ensure compliance with Oregon’s regulations on data brokerage.

---

March:

• Utah Social Media Regulation Act Enforcement: Stay ahead of the curve as Utah begins enforcing regulations to manage social media platforms effectively.

• California Privacy Rights Act (CPRA): After a delay, CPRA comes into force, signaling a new era of privacy rights and obligations in the Golden State.

• Washington My Health My Data Act (MHMD) and Nevada’s Consumer Health Data Privacy Law. 

• PCI DSS v4.0: Prepare to meet the first mandatory requirements for the updated security standards on processing payment card data.

---

June:

• SEC New Cybersecurity Breach Disclosure Rules: Small companies must gear up to assess material incidents promptly in compliance with the SEC’s latest regulations.

• Washington My Health My Data Act (MHMD) – Small Business Compliance: Ensure compliance with MHMD tailored explicitly for small businesses.

---

July:

• Consumer Data Privacy Laws in Texas, Oregon, and Florida: Brace for the rollout of comprehensive consumer data privacy laws in these states.

• Louisiana Social Media Laws: Navigate through Louisiana’s new social media regulations applicable from July 1st.

• Colorado CPA Controllers’ Deadline: Under the Colorado Consumer Privacy Act, Controllers must recognize the approved list of universal opt-out mechanisms by this date.

---

September:

• Texas Securing Children Online through Parental Empowerment (SCOPE) Act: Prepare for compliance with the SCOPE Act aimed at enhancing children’s online safety.

---

October:

• Montana Consumer Data Privacy Act: Gear up for compliance with Montana’s comprehensive data privacy regulations coming into effect.

• Connecticut Children’s Privacy Law: Ensure adherence to the new privacy laws tailored to protect children’s data in Connecticut.

• NIS2 in the EU: Be prepared for compliance with the updated Network and Information Systems Directive (NIS2) in the European Union.

---

December:

• Expiry of the Right to Cure Violations under the Connecticut Data Privacy Act: Make necessary arrangements to address violations before expiration.

---

January 2025:

• Consumer Data Privacy Laws in Delaware and Iowa: Start the new year by complying with the latest consumer data privacy laws in Delaware and Iowa.

• Digital Operational Resilience Act (DORA) Applicability: Be ready for compliance with the DORA, focusing on ensuring operational resilience in the digital sphere.

Embracing Change and Innovation in 2024

A multifaceted set of compliance challenges, trends, and opportunities will characterize the GRC 2024 landscape. Organizations are encouraged to adopt a forward-looking approach that considers geopolitical, ESG, and accountability risks while navigating the complexities of AI integration. 

The ability to stay agile, informed, and proactive will be instrumental in shaping resilient GRC strategies in the dynamic year ahead. Success hinges on resilience, innovative spirit, and an unwavering commitment to upholding the highest compliance standards. While challenges lie ahead, the year promises opportunities for growth and transformation in the evolving compliance industry trends.