How Technology is Revolutionising Compliance Services
Over several years, India has experienced a drastic shift in the context of compliance challenges mostly due to the enhancement of modern technology. This digital revolution is changing how businesses go about statutory compliance services in terms of capacity, reliability and costs. This brings us to the topic of interest, how technology is transforming compliance services in India and its consequent effects on enterprises in the country.
Increasing Significance of Compliance Services
Compliance services have emerged to be quite essential for enterprises in India. Today, there is huge pressure on organisations due to a complex regulatory landscape and frequent changes to the laws in force. Statutory compliance services can thus indicate tax, labour law, corporate, and bylaws compliance as well as environment compliance.
A survey by KPMG India in 2023 revealed that 78% of the companies cited regulatory compliances as their major concern. This indicates that compliance management is becoming increasingly important for smooth business operations.
Technological Innovations Shaping Compliance Services
Artificial Intelligence (AI) and Machine Learning (ML)
AI and ML are some of the leading technologies revolutionising compliance. These technologies are being used to:
Automate data
Anticipate the change in regulation and its consequences on companies
Improve the fight against fraud
Cloud-based Compliance Management Systems
Businesses have been able to reduce compliance management costs due to the development of cloud technology. Benefits include:
Straight-through access to compliance information and materials
Fostering of cooperation between different teams and parties
Better protection of data and ability to recover from disasters
Robotic Process Automation (RPA)
RPA is streamlining repetitive compliance tasks, such as:
Data entry and validation
Report generation
Regulatory filing submissions
Blockchain Technology
Blockchain technology is gradually gaining prominence as a solution to improving the compliance processes’ transparency and security. Applications include:
Immutable audit trails
Secure document verification
Enhanced data integrity
The anticipation about blockchain is still relatively low, but a 2023 survey by PwC India states that 45% of compliance officers expect a major disruption of statutory compliance services within five years.
Data Analytics and Visualisation
Advanced data analytics tools are helping businesses in many ways. The following are some of them:
Categorise the compliance activity trends
Develop ideas for decision-making in the organisation
Build compliance reporting forms
As highlighted by a NASSCOM survey conducted in 2024, more than 68% of Indian firms are now using data analytics in their compliance management exercise and this has boosted the accuracy of risk assessment by 25%.
Effects on Trade and Compliance Service Organisations
The technological revolution in compliance services is having a profound impact on both businesses and service providers:
1. Cost Reduction: Technologies advancements such as automation and digitisation have gone a long way in decreasing compliance costs. According to the Frost & Sullivan report presented in 2023, a cost cut of up to 30% for Indian companies could be achieved due to the use of compliance solutions based on advanced technologies.
2. Improved Accuracy: The application of technology in compliance has significantly helped reduce human error and improve information quality. This has over the years cut compliance-related penalties by a record 40% as identified by the Confederation of Indian Industry (CII in its report for 2024).
3. Enhanced Risk Management: Proper data processing and AI solutions have allowed companies to forecast and minimise compliance issues. According to the FICCI’s survey conducted in 2023, 65% of the companies that implemented these technologies cited that efficiency in risk management has been enhanced.
4. Streamlined Reporting: Reporting automation solutions have made it easy to prepare and submit compliance reports to the relevant authorities. According to Grant Thornton India’s 2024 study, this has led to the decreased reporting time of many businesses to half.
5. Increased Focus on Strategic Activities: Task automation can assist businesses and service providers in using their resources for proactive actions, understanding, and additional services and solutions that improve compliance.
Challenges and Future Outlook
While technology is revolutionising compliance services in India, there are certain challenges that the company faces. So, let’s understand the challenges and future outlook of compliance services in India to address the issue efficiently:
Data Privacy and Security: With more compliance processes on the internet, it is important to keep data more private and secure.
Regulatory Adaptation: Regulators must continue to adapt to technological development to ensure that they can exercise their oversight responsibilities effectively.
Skill Gap: Currently, there is a rising demand for expertise in the application of technological tools in compliance solutions.
As we look to the future of compliance services in India, it is clear these services will be ever more influenced by IT. As per a study by NASSCOM published in 2024, the RegTech market of India is expected to grow at a CAGR of 25% over the next five years and reach a value of $1.5 billion by 2029.
The compliance services segment is being revolutionised globally by technological advancement and Indian businesses are no exception. From artificial intelligence and blockchain to cloud technology and Robotic Process Automation, such advancements are making compliance effective, efficient and affordable. These technologies will prove to be important as organisations adapt to new regulations to meet the regulatory requirements and compete effectively.
However, for businesses that are looking to implement or expand the use of such technologies in their compliance processes, outsourcing to competent service providers can be the right choice for you. You can consider connecting with Kutumbh Konnect, which is one of the prominent compliance service firms in India. Well, by maintaining high standards in cutting-edge technological renditions, Kutumbh Konnect assists clients in comprehending the intricacies of compliance confidently and without any difficulties.