While all of the actions, planning, strategy, and work that companies have undertaken to manage regulatory changes are crucial, it is critical to recall where it all began. A firm can only take the appropriate action and make the appropriate decision if it has the appropriate attitude. Businesses that truly want to thrive will need to modify more than a few action items in their plans and components of their strategy - they will need to look at the broad picture and ensure that all decision makers and stakeholders within the organization have the proper mentality.
This is critical to remember given the unique nature of not only 2020, but also 2021 and 2022. Everyone is aware of what has occurred and how it has affected the world; nonetheless, it is critical to recognize that the year 2021 is markedly different from 2020, and consequently, the year 2022 will also be different when it comes to the pandemic's repercussions. 2020 was a year in which businesses attempted to survive to the best of their abilities, 2021 was a year in which businesses attempted to capitalize on new opportunities, and 2022 will be the year in which the global community adjusts to the new normal.
Changing Needs of a Changing Regulatory Environment
There are six considerations businesses should make as they prepare for regulatory change management in 2021. The first point is that firms must comprehend that 2020 was not the same as 2021. Nobody anticipated the epidemic in 2020, which is why the government also granted businesses considerable latitude in terms of reporting and monitoring. Not only so, but customers also received significant assistance in the form of cheap interest rates, stimulus cheques, and PPP loans.
It's critical to remember that, while the reforms implemented in 2020 benefited businesses, banks, and even consumers, they also presented some new obstacles. Additionally, rule changes introduce new risks or alter existing risks, such as increased default rates associated with extension, forfeiture, and other concerns. Banks, for example, face a troublesome danger when historically low interest rates result in less profit but the same volume of loans to process.
2021 Is the Year of Reconstruction
The most noticeable difference between 2020 and 2021 is that 2020 was a year of survival, whereas 2021 is a year of recovery. Businesses and governments were doing the best they could with few information and no news of the pandemic's conclusion. The year 2021 offers an entirely different picture of society and commerce. Vaccines are now widely available, and the health care industry is far more efficient in managing the disease than it was a year ago.
This means that enterprises will now resume more typical operational procedures. All of the leeway granted in 2020 will gradually be withdrawn. Businesses would have to shift gears and begin capitalizing on newly available opportunities, rather than simply focus on survival, as they did the previous year.
Managing regulatory change has always been both an art and a science. When it comes to implementing rules and ensuring that all corporate activities conform with the new legislation, it is a science. It is also an art, because the greatest regulatory change management professionals do not just focus on new legislation; they anticipate regulatory changes as well. When we examine the statements made by government authorities throughout the preceding year, we see that the majority of them focused on pandemic management. However, if we examine what they're discussing now, it's evident that their focus has moved. Additionally, the present administration has not only announced the appointment of new individuals to run regulatory agencies but has also created wholly new designations and roles inside regulatory organizations.
Every indication point to a sea change in the way organizations and enterprises are controlled. One of the most significant changes will be in the way firms are judged. The days of firms being evaluated solely on the basis of their financial performance may be numbered, as numerous new aspects and considerations are being incorporated into the way company performance and a business's impact on society are measured. The prudent course of action at the moment is to ensure that your firm has a regulatory management software in place that is capable of rapidly adapting to the new rules and regulations anticipated under the new administration.