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2025 will be a breakout year for compliance management systems, according to a recently released Gartner report surveying hundreds of U.S. compliance leaders in highly regulated industries like finance, aerospace, biotech, AI, robotics, and manufacturing.
The most revealing question Gartner asked compliance leaders dealt with the intersection of compliance and their strategic initiatives. A whopping 76% of respondents said improving their organization’s approach to managing third party risks would most directly impact their top goals in 2025.
Let’s underscore that – 3 out of 4 respondents said third-party risk management was their number one compliance priority. Improving the quality of information used for risk detection and evolving or implementing AI governance were also highlighted as important by 2 out of 3 respondents.
De-risking the Enterprise
Scrutinizing third-part risk reflects the responsibility compliance leaders have at their organizations. Over 80% of compliance leaders said they would face consequences if their organization experienced a third-party incident like a cyberattack or service outage, according to the same Gartner report. No one wants to lose work as a result of choosing a vendor.
Two of Gartner’s recommendations for managing third party risk directly impact compliance management systems. The consultancy emphasizes outgoing monitoring of third-party relationships instead of point-in-time efforts and that technology solutions are at the center of timely risk identification. One critical compliance tool is the compliance management system.
Defining Compliance Management Systems
What’s a compliance management system (CMS)? The Federal Deposit Insurance Corporation defines a CMS as how an organization:
- Learns about its compliance responsibilities
- Ensures that employees understand these responsibilities
- Ensures that requirements are incorporated into business processes
- Reviews operations to ensure responsibilities are carried out and requirements are met
- Takes corrective action and updates materials as necessary
Whereas most of these tasks used to be carried out manually – typically by a designated compliance offer – an online CMS can guide startups and other organizations on which risks matter most to its partners, customers, and stakeholders. It can also show organizations how to best mitigate those risks, whether through compliance frameworks, evidence collection, the acquisition of business insurance, or some combination of these approaches. A CMS is not only valuable to companies choosing third-party vendors, but also to the vendors themselves who gain a better understanding of how they can shorten deal cycles and close new customers.
Choosing the Right Compliance Management System
Compliance Management Systems have come a long way since their inception. That doesn’t mean you can take any CMS off the shelf and call it a day, though. At a bare minimum, a compliance management system should:
- Identify contractual requirements your organization needs to close business
- Map those requirements to evidence collected by you or your organization
- Support ease-of-use with intuitive design and functionality
- Expedite compliance-related projects like achieving SOC 2 certification, acquiring business insurance, or enhancing security processes
These features help mitigate third-party risk for customers and vendors alike.
To Compliance Management – And Beyond
Even after you’ve selected a compliance management system for your team, there’s more you can do to elevate your trustworthiness and generate new business faster: demonstrate your compliance bona fides to everyone and anyone. Companies do this in two ways: by displaying a badge with their compliance or insurance credentials on their website, and by joining trust databases that enterprise procurement leaders use to vet startups, like TrustHub.me. Enterprises rely on tools like TrustHub when they want to choose vendors that already meet their contractual requirements instead of determining whether a vendor can meet their requirements during the sales cycle.
Large-scale third-party breaches happen at least weekly, so it’s no surprise that third-party risk management is top of mind for compliance leaders. Thanks to modern compliance management systems, compliance is no longer the headache it once was. Cutting-edge companies are using their CMS to preempt contractual requirements, meet those requirements, and demonstrate their trustworthiness across the enterprise. The combination of these benefits leads to shorter sales cycles, lower customer churn, and more revenue for the teams that invest in them.
About Koop
Koop simplifies compliance, insurance, and security for startups, helping them save time and money while building trust with customers and partners. Its all-in-one approach to trust management enables startups to achieve SOC 2, HIPAA, and ISO 27001 certifications faster and more affordably, empowering them to commercialize and grow confidently. Learn more at koop.ai.
