Did you know that organizations from all around the world lose not just millions but billions of dollars yearly due to non-compliance with rules and regulations? That surprising trend will continue rising as data regulations become stricter, so it’s crucial to conduct cybersecurity learning programs ASAP!
The losses don’t stop there, though. Non-compliant organizations are also at serious risk of loss of productivity, security breaches, reputational damage, and even closure of their business. Let’s delve deeper into the consequence of poor compliance and why regular, practical compliance training courses is an absolute must.
The Legal Consequences
All businesses are required by law to adhere to rules and regulations. If a business fails to do so, then it can face these legal consequences:
- Fines and penalties: This is the most well-known consequence of non-compliance. Regulatory bodies that govern industry standards and laws would impose fines and penalties for non-compliant organizations. The penalties would vary, depending on the severity of the non-compliance and the governing body. For example, GDPR fines may go up to 4% of an organization’s revenue!
- Lawsuits: If non-compliance occurs, the repercussions aren’t only related to fines and penalties. Depending on the law broken, it can affect stakeholders like employees, vendors, customers, and more. There are chances that affected parties would take legal action, filing a lawsuit. This will take a lot of time, effort, and money, and also cause reputational damage.
- Regulatory scrutiny: Recovering from non-compliance isn’t easy. Even after facing the consequences and paying what’s due, organizations are subjected to costly regulatory audits in the long run.
- Imprisonment: Regulatory standards state that organizations must take necessary steps to stay compliant. In worst-case scenarios, business owners, executives, or directors may face imprisonment for criminal negligence.
The Business Consequences
Business consequences of non-compliance might not have actual monetary implications. However, the damages are just as intense. Here are just some of the business-related consequences non-compliance can bring:
- Business disruption: Non-compliance would severely impact business operations as customers wouldn’t trust a non-compliant organization! They will more likely head to competitors instead. Furthermore, the costs spent on lawsuits, fines, and penalties would negatively affect a business’ ability to create much-needed investments.
- Revenue loss: Non-compliance may force organizations to discontinue operations, devastating the business temporarily. Overheads costs associated with maintaining a business as it remains idle are high. In fact, many organizations don’t recover after major non-compliance incidents.
- Damaged brand reputation: Once word gets out that your organization is non-compliant and faces issues like lawsuits, your reputation will fall, taking a permanent hit. Customers and potential investors lose confidence in your organization, and it can take a long time before you restore the reputation again, if you even can!
- Security breach: Any security breach due to non-compliance can also result in the loss of critical business data, which incurs even more loss!
Wrapping It Up
Now that you are aware of the consequences of poor compliance, it’s time to start strategizing and building an effective compliance training program for your employees.