Organizations today face a myriad of challenges related to regulatory requirements, industry standards, and emerging risks. To address these challenges, organizations must have robust compliance and risk management programs in place — and the more integrated, the better. 

In this post, we'll explore the differences, similarities, and strategies for integrating compliance and risk management seamlessly into your business operations to help ensure the success and sustainability of your organization.

What is compliance management?

Compliance management refers to the process of ensuring that an organization adheres to relevant laws, regulations, standards, and internal policies. It involves identifying and understanding what requirements are applicable, establishing controls and procedures to meet those requirements, monitoring these controls over time, and addressing any non-compliance issues.

What is risk management?

Risk management, on the other hand, is the systematic process of identifying, assessing, prioritizing, and mitigating risks that could impact the achievement of organizational objectives. Risks can arise from various sources. Some of the most common types of risk are strategic, financial, legal, operational, cybersecurity, and compliance. 

Effective risk management involves identifying the types of risks that your organization is facing, understanding the nature and magnitude of these different risks, implementing measures to reduce their likelihood or impact, and continuously monitoring and reviewing risk exposures.

Let’s take a closer look at the similarities between compliance and risk management.

What are the similarities between compliance and risk management?

Compliance and risk management share key similarities, including:

• Both functions involve the same core set of activities: risk assessments, policies and procedures, internal controls, testing, documentation, and reporting.
• Both functions help management guide business operations and decision-making in order to achieve the company’s objectives.
• Both functions rely on automated and preventive measures to avoid incidents such as a data breach and ensure organizational integrity and resilience. 

However, compliance and risk management are not the same. Let’s take a closer look at their differences below. 

What are the differences between compliance and risk management?

While they share similar purposes, compliance and risk management differ in their focus and approach in a number of ways, including:

• Compliance management primarily deals with meeting external requirements imposed by laws, regulations, standards, or customers, whereas risk management encompasses a broader spectrum of potential threats and uncertainties, including those arising from internal and external sources.
• Compliance management tends to be more prescriptive, with specific guidelines and regulations dictating required actions, while risk management involves more custom and strategic decision-making to anticipate and mitigate potential risks that are unique to the organization and its objectives.
• Compliance management often involves a reactive approach, with a focus on pursuing certifications and compliance after regulatory bodies or customers request it, while risk management emphasizes proactive identification and management of uncertainties to prevent adverse impacts on organizational objectives.

Is compliance a subset of risk management or vice versa?

Compliance is an integral part of risk management since compliance risks can result in financial penalties, reputational damage, operational disruptions, loss of investors, loss of revenue, legal fees, and other severe consequences. However, compliance risk is just one type of risk organizations can face. Risk management is therefore a much broader area than compliance risk management. 

While some experts in the compliance and risk management fields argue that compliance is a subset of risk management for this reason, the reverse can also be said to be true. 

Effectively identifying, assessing, and mitigating risk is a critical requirement for achieving and maintaining compliance with frameworks such as SOC 2®, ISO 27001, PCI DSS, and HIPAA. However, organizations must implement additional controls and processes beyond risk management in order to comply with these information security frameworks. So risk management can also be seen as a subset of compliance management.

Both perspectives emphasize the same truth: risk management and compliance are inextricably linked. As a result, compliance and risk management functions should be integrated as much as possible in order to improve an organization’s stability and resiliency. Let’s look at how below.

How to integrate risk management and compliance

Integrating risk management and compliance is essential for creating a robust and resilient governance framework that addresses both regulatory requirements and strategic objectives. Here are some tips to achieve this integration:

1. Align objectives

Ensure that risk management and compliance efforts are aligned with the organization's overall goals and objectives, taking into account both regulatory requirements and strategic priorities. For example, some goals or outcomes you aim to achieve through integrating compliance and risk management may be improving efficiency or enhancing risk awareness.

2. Focus on cross-department collaboration

Foster collaboration and communication between compliance and risk management functions to identify overlapping areas and streamline efforts. Establish clear roles and responsibilities and assign tasks and owners when possible to avoid duplicate work and ensure accountability.

3. Link controls and risks when possible

Some controls might be able to reduce compliance and other enterprise risks. In that case, compliance and risk management teams should collaborate when reviewing and remediating controls to ensure that the controls in place are effective and to reduce or avoid any duplicate controls and associated work.

4. Centralize third-party risk management

Compliance and risk management both require your organization to identify, assess, mitigate, and monitor any risks associated with your relationships with third parties. So it makes sense to consolidate all your third-party risk management efforts, processes, and data in one place like a GRC platform. 

5. Embed risk and compliance into operations and decision-making

Embed risk management and compliance processes into existing business operations and decision-making frameworks. For example, consider embedding risk assessments and compliance activities into strategic planning, project management, and performance evaluation processes.

6. Leverage technology and automation

Utilize a governance, risk, and compliance (GRC) platform to streamline and automate compliance and risk management activities and track them all in one place. These tools can facilitate data sharing, reporting, and analysis, enabling more efficient and effective compliance and risk management.

How a GRC tool can help you integrate compliance and risk management

According to PwC’s 2023 US Risk Perspectives Survey, more than half of risk teams say they have seen “significant improvement” in how they manage risks by using applications such as advanced analytics, automated workflow solutions, artificial intelligence/machine learning, and GRC platforms.

A GRC platform can serve as a centralized hub for managing all aspects of compliance and risk management, providing features such as:

• Automated continuous monitoring: By continuously monitoring your security controls and risks, a GRC platform can help your organization proactively identify and respond to compliance issues and other emerging risks.
• Streamlined third-party risk management: A GRC tool can help you manage your entire third-party risk management program — including your policies and procedures, risk assessments, testing of controls, documentation, and any other due diligence activities — in a single, automated platform rather than a set of disparate tools. This makes it easier to build and maintain a secure and compliant third-party ecosystem. 
• Workflow automation: A GRC tool can automate compliance and risk management processes, including risk assessments, remediation, and audit readiness, through automated workflows and task assignments, thereby reducing the time and resources required to manage each program.
• Reporting and analytics: GRC software can also generate comprehensive reports and analytics about your compliance status, risk exposures, and mitigation efforts. Centralizing this compliance and risk data in a single tool provides visibility into the overall effectiveness and efficiency of your organization’s compliance and risk management programs, where gaps exist, and what improvements you can make over time.  
• Task tracking: A GRC tool also simplifies the analysis, tracking, and communication of tasks involved in assessing and managing risk and demonstrating compliance. Risk and compliance teams become more effective and efficient as a result, reducing the time and resources spent on managing disparate systems and processes.
• Mapping controls to risks: The best GRC tools will allow you to link controls to known risks so that you can coordinate your risk management strategies with your compliance requirements. 

By leveraging GRC software, organizations can enhance their ability to integrate compliance and risk management efforts seamlessly, thereby strengthening their overall governance framework and resilience to emerging threats.

Why organizations choose Secureframe to integrate compliance and risk management

Organizations today are challenged with navigating the complexities of regulatory and customer requirements and emerging risks while achieving their strategic objectives.

Thousands of organizations have chosen Secureframe to address this challenge because of its automation and AI capabilities for compliance and risk management, including: 

• End-to-end risk management: With Secureframe, organizations can assess and document treatment plans in their environment to meet the criteria for frameworks such as SOC 2, ISO 27001, PCI DSS, and HIPAA. Secureframe’s Risk Management system follows the ISO 27005 methodology so organizations can effectively assess risks in their environment to make smart decisions for their security compliance program.
• Control mapping to risks: Secureframe allows you to link controls to known risks so that you can coordinate your risk management strategies with your compliance requirements. Linking up controls helps organizations assess their residual risk so they can recognize and close any gaps in their risk management program.
• Automated control mapping suggestions: Comply AI for Control Mapping leverages advanced machine learning and natural language processing to intelligently suggest control mappings to risk assessments. This makes it even easier to link controls to risks in order to display the steps an organization has taken to mitigate risk and identify gaps so they can proactively treat and respond to risk. 
• Task tracking and notifications: Organizations can create compliance and risk management tasks in the Secureframe platform, assign owners, set due dates, and send notifications via a preferred notification delivery method – email, Jira, or Slack. Tasks and notifications improve collaboration within your organization and ensure tasks are completed in a timely manner to maintain a strong risk and compliance posture.
• Centralized TPRM: Secureframe TPRM enables organizations to centralize and automate third-party review and risk management processes, including security reviews and continuous monitoring. This not only saves organizations time — it also helps them strengthen their ability to prevent third-party data breaches and maintain compliance.

To learn more about Secureframe or see these solutions in action, schedule a demo with our compliance experts today.