The word “compliance” makes many employees cringe. The term conjures up images of onerous and seemingly superfluous internal rules and regulations. But companies don’t implement compliance requirements for no reason.
Developing those requirements is often time-consuming and expensive. Profit-focused private enterprises aren’t going to last long against their competition if they squander those resources for no reason.
To highlight that point, in this post, we’ll look at some examples of disastrous compliance violations and their costly consequences.
New York Presbyterian Hospital and Columbia University HIPAA Violations
The Health Insurance Portability and Accountability Act of 1996, more commonly known as HIPAA, regulates how covered entities manage and share patient healthcare information.
In 2014, The New York Presbyterian Hospital and Columbia University agreed to pay a $4.8 million fine resulting from a 2010 incident in which the health records of 6,800 patients wound up online and searchable.
Deutsche Bank Exposure to Financial Crimes Risks
Financial institutions are subject to a variety of compliance requirements—requirements to not only maintain the financial security of individuals and national economies but also ensure they aren’t enabling transactions in support of money launderers, terrorists, drug dealers, and other criminals.
In 2017, the United Kingdom’s Financial Conduct Authority (FCA) fined Germany’s Deutsche Bank £163 million for exposing the United Kingdom’s financial system to potential financial crimes when it failed to properly oversee the establishment of new customer relationships.
Citigroup and Goldman Sachs Subprime Mortgage Fines
The subprime mortgage crisis that caused a meltdown of the U.S. financial system and triggered a global recession led to some significant fines against the companies that created and sold the shaky financial instruments at the heart of the crisis. For example, Citigroup paid $285 million in fines for its role, while Goldman Sachs paid $550 million.
Compliance requirements can be costly, tedious, and burdensome, but the costs, headaches, and bad publicity of noncompliance with laws and regulations can be truly devastating to organizations and even drive companies out of business. Tomorrow, we’ll discuss some tips for helping boost employee awareness of key compliance requirements.