Data-related regulations are catching up with advancements in different fields quite commendably in some parts of the world. While some regulations are imposed to foster interoperability and data sharing, others are brought in to promote data security and fundamental values such as fairness and democratizing access to data within larger ecosystems.
Having driven data management initiatives within FinTech and Automotive, I gather that the way different domains handle data-related regulations is quite different. Based on this experience, this article discusses how businesses could possibly view data regulations as either a boon or a bane, how different industries handle regulations differently and how businesses stand to gain by adopting regulations as part of their core.
Data Regulations: An Opportunity or a Constraint?
In a world with so many variables, the one thing that’s sure is change. Many a times, this change is spawned by new regulations. There are businesses that take regulations on, as if it’s second nature to them. And then, there are businesses that try to flee from them. One would argue that striving to comply with regulations sets the bar low. But I would argue that imbibing regulations as a part of our DNA helps us all climb higher and higher collectively by setting the base at the compliance level and presenting ample space to go over and beyond the compliance level.
Companies need to resist the temptation to view regulations as a threat. Regulations are here to stay. By considering regulations as an ally, we stand to gain not only by enhancing credibility, by mitigating potential risks and by steering clear of possible penalties, but also by raising our focus on advanced innovation by getting the basics out of the way. When companies have embraced regulations, they’ve not only been frontrunners at compliance, but have also become pioneers in innovation. From my work so far, I’ve come to appreciate that regulations never restrain progress. Also, the extent to which a company chooses to comply with or go beyond a regulation determines how much a company stands out from the rest of the crowd.
Across Different Domains
The difference between the way FinTech and Automotive domains handle data-related regulations is too glaring to be missed. This stark difference may originate from the contrast in role that data plays in these quite unique industries. Data is almost considered sacred (due to the level of confidentiality of financial data, and the allied need to be on top of this data) in Fintech, whereas the significance of data in Automotive is just beginning to be acknowledged. I would even go on to claim that the overall data maturity of an industry is influenced by how the industry responds to regulations and the extent to which its regulations have developed.
Companies in nearly every sector heavily prioritize their compliance initiatives, recognizing that utilizing regulatory compliance as a justification builds the most robust business case to obtain the required investments for new initiatives. In my view, one promising aspect is that industries that are currently grappling with balancing innovation and compliance can draw inspiration from those industries that are ahead. Doing so would promote better quality of a company’s data product lineup, apart from extensive possibilities for innovation.
Regional differences in regulatory areas and in timelines of imposing regulations are typically bridged by influencing all parties in the value chain. In an environment as global as today’s, where supply chains are spread out geographically and ecosystems are expanding, it is imperative to lead our suppliers and bring them along. After all, entire supply chains can only be influenced one supplier at a time. That said, it cannot be denied that data-related regulations need to be interoperable across regions around the world in order for businesses and customers alike to reap extensive benefits.
Business Gains
The ultimate value of ensuring compliance time and again is that it builds trust with the customers – irrespective of whether it is business-to-business or business-to-consumer – and advances brand value by enhancing transparency. A focus on interoperability through standardization opens more avenues for innovation. Adhering to regulations not only has the power to galvanize cross-functional forces and to boost a company’s capabilities, but also catalyzes initiatives and thrusts them forward, incentivizing the company to be one among the first to reach a higher level of functioning. In some cases, complying to regulations can open the doors to new markets. Staying on top of regulations can prove to be a stimulus for innovation by urging businesses to create compliant processes and technologies. In an evolving regulatory landscape, following regulations can contribute to future-proofing businesses.
To Wrap Up
Due to the step-by-step process that needs to be undergone in order for a regulation to be brought into effect, regulations are typically well-thought-out. The time period during its drafting also presents the possibility to galvanize the required competence, to begin cross- functional discussions within companies and to understand what it takes to effect business changes towards ensuring compliance.
Irrespective of industry, data is at the very core of every business, and all businesses benefit greatly by embracing regulations related to data. Regulatory compliance can prove to be an effective competitive differentiator where competitors might not meet the same high standard.
In summary, embracing regulations not only protects businesses from legal and financial risks but also enhances reputation, fosters trust, promotes operational efficiency, and can provide a competitive advantage in the market.
About the Author
Charanya Thangaraj is Service Area Manager of Data Access Services at Connected Services in Volvo Buses. She is responsible for commercializing products built from connected vehicle data. Charanya is a seasoned data professional in fintech and automotive, dedicated to leveraging data for driving business value effectively. Her data leadership in the automotive industry includes leading enterprise-wide data governance efforts in the autonomous driving space. This enhances transparency of electromobility supply chains with blockchain-traced data and creating value-adding data and insights products.
Moreover, at this year’s Data Innovation Summit in Stockholm, we hear more insights from Charanya as she presents on creating value-driven data products! Tune into her talk to gain insights on strategies for elevating your data game.
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