Regulatory requirements, as the term implies, are requirements mandated by relevant authorities for your business. Anything closely or remotely related to your business must be within your purview. Complete information on such requirements facilitates the future course of action and prevents any fines or enforcements attached.
The requirements serve as a legal fence. A full understanding of these requirements is also crucial for achieving competitive edge. The key terms here are the right direction and, therefore, the strategy or the business direction must be carefully drafted to ensure that it is right.
The basic regulatory frameworks and acts that govern the present business operations include Sarbanes Oxley Act ([SOX], 2002), Gramm-Leach-Bliley Act (1999), and Health Insurance Portability and Accountability Act ([HIPAA], 1996).
The specific requirements vary and require careful study; however, at the core, these regulatory tools ensure that your operations benefit the society. Accountability, integrity, confidentiality, transparency, and availability are few of the functions served by the regulatory framework.
The basic impact of the regulatory requirements on your business depends largely on how you perceive and implement them. Ignorance or negligence toward this end can lead to eventual negative consequences.
An important area affected is the customer trust and association with you. How you produce is an important determinant of how much you sell. The modern consumer is becoming increasingly cautious of things that go one backstage.
In the same category falls the impact of such obligations on your prospective associations, mergers or alliances. The other party is wary of defaulters or partners who are continuously avoiding the legal net by wrong means for wrong reasons.
Anticipating future changes and their implications are important in case of regulatory requirements. Investments or other crucial decisions made without taking into account such factors could cause huge losses in times to come. A minor amendment or an introduction could kill the profit streams and might entail huge modifications in your plans. So make sure to include regulatory commitments while planning.
Regulatory requirements are supposed to benefit the society and you but what is important is how you mold them to gain. Do not expect to sit back and wait for things to change for you; rather, make necessary changes in the overall business strategy that includes the regulatory requirements as a complementary add-on.