Regulatory compliance is a set of mandates that every company or industry is required to follow to track accountability at work.
Regulatory compliance is the efforts made by companies to implement and follow all applicable laws, regulations, and rules.
When it comes to a company's operations, it must follow a set of rules and regulations. These rules are developed by state, federal, or international institutions, and the requirements may differ depending on the industry or type of business. When a company operates according to these mandates, it is essentially following regulatory compliance.
Adherence to external legal mandates issued by state, federal, or international governments can be considered regulatory compliance. Furthermore, following company policies and procedures entails following the company's internal regulations. Both, nevertheless, contribute to increased workplace accountability.
In the year 2009, blockchain emerged as a revolutionary technology in the world. However, its application and potential extend beyond cryptocurrencies. Blockchain operates on a simple framework that consists of a distributed ledger that runs concurrently on millions of nodes distributed across geography, organizations, and individuals. What distinguishes blockchain is its cryptographically guaranteed data integrity and irreversibility.
For example, once ledger transactions are pooled into blocks and recorded to the database, they are followed by cryptographic authentication which makes it nearly impossible to change any part of the ledger illicitly.
This is one of the most impressive aspects of blockchain from the standpoint of compliance because it is practically immutable: once data is saved into the chain, it cannot be changed or deleted. As a result, blockchain is used as a document or proof of transfer for any digital asset, such as bitcoins or other digital currencies.
The immutability of blockchain can also be used in the proof-of-process for compliance. Blockchain technology can be used to record the steps required by regulatory requirements. The immutable recording of actions and their outputs can create an audit log for regulatory authorities to ensure adherence.
KYC (know your customer) and anti-money laundering policies are a part of regulatory compliance, and blockchain can play a key role. Banks and other financial institutions must complete several tasks and steps to accept new clients. There are important rules to follow regarding confirmation and verification, in addition to data collection. In some cases, the process can take several months. Many of the steps could be skipped if the data was already in a secure, tamper-proof database – an incorruptible blockchain.
Blockchain technology has the potential to improve private regulatory compliance, and it can also assist regulatory agencies.
Agencies can maintain near-real-time access to secure compliance-related data stored on regulated financial organizations' blockchains. Rather than analyzing information after the fact, this would allow regulators to continuously improve.
In conclusion, regulatory compliance is a protocol that every field must follow. But with the help of technology, these regulatory processes, such as KYC and financial crime prevention, maybe early converts among the many processes that could be improved and made efficient. All industries can reap enormous benefits.
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