Everything You Need to Know About Compliance

Published On: January 16th, 2018Categories: EbookBy

What is regulatory compliance?

If you are in the finance, legal, medical or education field, you are all too familiar with regulatory compliance.

Regulatory compliance is the body of laws and protocols to which certain companies within specialized industries must adhere. The laws, regulations and guidelines are issued by regulatory bodies that govern over these specific industries.

What happens when a company fails to comply with industry regulations and protocols? They can face audits, fines, reputational damage and, in some cases, prosecution.

It’s important then to be aware of how certain regulatory bodies approach regulation and how those regulations can affect your business when you don’t have the tools in place to give you 100 percent compliance.

Who are the Regulators?

If you operate a financial services company such as hedge fund in Manhattan, or run a medical office, or maybe head the technology of a college, you’re going to face one or more of regulations from the following. It is incumbent on you to stay compliant.


The U.S. Securities and Exchange Commission is an independent United States government agency that enforces federal securities laws. The SEC’s mission is to protect investors, maintain efficient markets and facilitate capital formation.

The SEC carries out its mission across five divisions:

  • Corporate Finance
  • Trading and Markets
  • Investment Management
  • Enforcement
  • Economic and Risk Analysis

Politically speaking, the SEC must be nonpartisan. The president can hire but not fire an SEC commissioner.

Because investment is not guaranteed by the federal government (unlike banking), the SEC attempts to level the playing field by publishing disclosure statements and other financial information about public companies that require SEC compliance.

Many businesses and organizations are required to make SEC filings, providing and disclosing appropriate financial information to the public.

Hedge funds, in particular, are seeing deeper integration of their IT with their regulatory compliance. For example, off-the-shelf software and integrated dashboards can help with the SEC’s reporting requirements. Record retention, portfolio monitoring, archiving: Each of these can be automated with the right software.

But beware, “Piracy spans every type of company, as evidenced by the 51 percent of Fortune 100 companies in which unlicensed software is in use.” It is essential for SEC-reporting businesses to be fully aware of their software usage across workstations.

compliance and piracy quoteSource: Revulytics


The Financial Industry Regulatory Authority is an independent regulator that oversees security firms that do business with the public. These companies trade in securities like equities, bonds, options and futures. Overseeing brokerage firms and exchange markets like the New York Stock Exchange, the NASDAQ, the American Stock Exchange and the International Securities Exchange, FINRA can ensure the appropriate regulation and licensure for the safety and security of public investments, “Protecting Investors from Bad Actors.”

For firms and professionals who sell securities, FINRA compliance means a transparency of service. For most businesses, this means equity and debt reporting to reach compliance. The FINRA rulebook is a comprehensive list of rules and regulations that all members must follow to be in compliance, including not only practices for operation in securities trades, but also in reporting, data collection, records and reports.

Many firms find themselves noncompliant not out of negligence but rather from using best practices that are uninformed of the latest FINRA requirements. While your CFO can direct your procedures, your IT partner can help you automate processes and keep your tech in line with FINRA regulations and your business goals.

FINRA compliance quote


The New York State Department of Financial Services is responsible for regulation insurance, banking, and financial services laws in New York. Designed to spur economic development and ensure the prudence of financial products and services, the NYS DFS runs investigations on a multitude of institutions, like charitable foundations, credit unions, health insurers, mortgage brokers, bail bond agents and many others.

The NYS DFS attempts to protect consumers from fraud and unfairness in the market through several initiatives:

  • Payday lending
  • Community bank support
  • Student lending
  • Foreclosure relief
  • Virtual currencies
  • Health marketplaces

Initiatives like these are specific to New York State, and the NYS DFS demands that organizations that fall under their purview hold high standards of honesty, transparency and public responsibility.

How does this affect your IT? The simple answer is automation of processes and practices. The only way to ensure compliance with the NYS DFS is to have tech that aligns you with those regulations.

NYSDFS compliance quote

Taking Stock of Your Risk

With so much riding on your ability to stay compliant, can you confidently say your company is equipped to handle the demands of ever-changing regulations?

To understand your risk, a network security audit is necessary.

Running a Network Security Audit Informs You of Your Risk

Financial, legal, medical: If you operate in these fields, you are subject to increased scrutiny, security compliance and technology regulations. The more data you access and store, the higher your risk for failure, disaster or intrusion. At any moment, you may be subject to a security audit.

Your IT infrastructure expands with business growth, more and more compliance regulations come out each year, business needs are mounting, and your IT network is starting to feel the strain. With increasing demand placed on an aging IT infrastructure, you need to know that your network security is up to the tasks your business requires. A network security audit helps your company identify key areas of risk in your IT network, identifying what holes need fixing and how to strengthen and improve network security.

The audit itself is an assessment of your business’s IT network intended to keep your IT infrastructure up to operating regulations. It can be intimidating, but remember, a network security audit is a benefit to your office’s cybersecurity.

network security audit quote


  • What is the physical state of your hardware?
  • Is it up to date?
  • is everything patched and updated?
  • Are systems protected and attack surfaces minimized?

Software & Cloud

  • What kind of programs do you use?
  • What security measures are in place?
  • Where does your data reside, and do you maintain control?
  • Is key data encrypted, how and when?
  • How are your employees interacting with the extended data networks?
  • Are they utilizing it the best they can?
  • Are they following your acceptable usage policy and correct procedures?

a power couple reviews their compliance audit

What Needs to Happen Before an Audit

A network security audit is like any other audit, and naturally, you need to prepare for such a process. Thankfully the preparation for an audit is made manageable with the assistance of a regulatory compliance analyst. A good managed IT services firm will provide compliance analytics services. Before the audit gets underway, the analysts help get your office in shape. They inventory what kind of data and information your network is handling and how it is stored. From there, they examine who has what access to this data. Does anyone have too much access, too little? There must be the right amount of security and office efficiency. Furthermore, what protection and recovery plans are in place and are they up-to-date.

A regulatory compliance analyst will also look at what your employees are doing. Human error can be a significant hindrance to any IT network: 60% of cyber attacks are made possible because of poor company insiders behaviors. Examining your workers’ habits can help you discover and address countless accidental threats to your cybersecurity. Finally, the analysts monitor your network to see if anyone has outside access or has compromised your security. This may seem like a lot, but a regulatory compliance analyst helps your office compile and organize the data without cutting into business productivity.

cyber attack quoteSource Harvard Business Review

IT Threats for Companies

There are numerous risks that a business faces when it comes to cybersecurity. There are countless forms of phishing scams, ransomware, malware, viruses and hacker strategies that can breach your protection. Likewise, simple carelessness can lead to the loss of sensitive business data or capital. Mistakes will happen, and they can be damaging when they do. But it is important to minimize them as much as possible.  Here are some of the many security risks that can bring your business to a halt.

Learn More: Everything You Need to Know About Cybersecurity

Cyber Espionage

Your network has valuable business information stored on it: procedures, data, blueprints, patents, any number of pieces of corporate knowledge. Weak security makes a ripe target for a hacker looking to sell your data to the highest bidder. The result of data loss is often falling out of the competitive markets, almost overnight. Countless hours and business capital can be wasted.

Internal Fraud

Your employees are your best asset. But, sadly, there are unscrupulous people out there, and all it takes is one to get into your office. An inside leak of information to another company can be devastating. So too is embezzling funds. A disreputable employee can cost you hundreds, thousands, even millions of dollars, even in a short period of time Without the right procedures, adequate cybersecurity and proper allocation of security clearance, fraud can all too easily be executed from the inside.


There are always malicious hackers testing your network security, trying to send in all sorts of malware. Their tactics and objectives are always evolving. Sometimes when they succeed, they can hold your data hostage, lock out your employees, steal funds, corrupt files. Other times they may spy on your business or personal activities. The right managed services provider will help you get your security inspected and improved.

Human error

May not be the most obvious, but it can be most costly. This can hurt your business in one accident or over countless little slips. Whatever it is, human error will happen, but it can be addressed.

A regulatory compliance analyst can identify holes in your network and help you reduce mistakes by outlining processes and procedures for learning and improving your business.

How Does This Help Your Company?

The chief benefit of partnering with a compliance analyst is gaining awareness of the risks to your business and your current state of cybersecurity. But what real-world impact does this have? By being able to identify your needs from a best practices standpoint, you can prioritize, tighten critical areas of security, improve your protection strategy, advance your work process, or enhance the work habits of your employees, depending on what’s most relevant to your situation. Either way, you will achieve better results for your business.

A Regulatory Compliance Analyst Can Make Sure You’re Following the Rules

With the exponential explosion of information technology in the workplace, the rules governing its proper uses have expanded as well. Regulatory compliance measures can be intricate, complicated and laborious to parse through. There are many rules and regulations in place at state and federal levels, making it difficult to keep track of them all, let alone comply with them.

Despite the increasing complexity, they must be followed. Besides being the law, they are, after all, designed to protect your IT networks and promote cybersecurity. But how can you be confident that you are properly following the relevant regulations? A regulatory compliance analyst is trained in network security audits to help you answer that question.

The Process of an IT Security Audit

During the exhaustive security audit, massive quantities of information are compiled and reviewed. At the same time, various associated regulations are cross-references, including:

  • A digest of federal and state regulations pertaining to applicable levels of IT security
  • A review of cybersecurity measures that are in place
  • The physical locations and systems where data is stored and accessed
  • Procedure for protection, remediation, recovery, and follow-up learning including a testing process for the procedures
  • Data access levels for all employees, contractors, and partners (internal and external), including onboarding and off-boarding procedures

Checklist: Everything You Need to Pass Your Next Compliance Audit

How a Regulatory Compliance Analyst Can Help Your Office

Now you may think, why can’t my office staff complete our own security audit? The truth is, you’re not in the business of knowing every IT regulation or performing audits. Preparing for a security audit is as immense a task as the audit is itself making you and your employees’ input vital to the success of the project. The regulatory compliance analyst is there to expertly help you achieve maximum results while moving the project to completion.

A regulatory compliance analyst is already familiar with the intricate web of IT regulations that are in place, knows how best to organize for an audit, how to test your systems, making them ideal to pull all the necessary information together for a professional audit. Hiring a compliance analyst may cost money, but it will save you money in the end.

Your office staff will not need to be diverted to direct the organization for an audit, an analyst has a thorough understanding of IT regulations and can help you to implement them in your office. This can avoid government fines, inefficiency, fraud possibilities, cybersecurity threats from espionage or hacking, and address any human errors that cost your company money.

Contact KJ Technology to find out how a regulatory compliance audit can keep your business humming while maintaining the integrity of your business.

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