Regulation: Roadblock or Opportunity


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While the current regulatory environment can have the effect of increasing costs for operational compliance or reducing business opportunities due to increasing risk of liability - it can also "unlock the value" for new business in unexpected ways. This presentation shows several vertical market regulatory examples and trends to demonstrate why keeping abreast of regulations in your customer's markets is good for business.

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Regulation: Roadblock or Opportunity

  1. 1. Regulation: Roadblock or Opportunity? Elizabeth Gooding President, Insight Forums & Gooding Communications Group
  2. 2. 2 Copyright Insight Forums LLC 2014 Not a Regulatory Primer – I Promise! Understanding Regulation versus Compliance Global Trends that Influence Regulation Impact of Regulation – Why You Should Care Participating in the Regulatory Process Turning Roadblocks into Opportunities Thank You
  3. 3. 3 Copyright Insight Forums LLC 2014 Regulation versus Compliance Back in the day when everything was printed…
  4. 4. Question Everything!
  5. 5. 5 Copyright Insight Forums LLC 2014 Regulations and Internal Compliance Create a Governance Board Document Policies and Procedures Get Audited/Reviewed by outside parties "If a company markets privacy and security as key selling points in pitching its service to consumers, it is critical that it keep those promises. Any company that makes misrepresentations … about its privacy and security practices risks FTC action." FTC Chairwoman Edith Ramirez Oh, SNAPchat! Don’t Over-PromiseDon’t Over-Promise
  6. 6. 6 Copyright Insight Forums LLC 2014 Compliance Has a Cost When pursuing new markets, understand potential increases needed in controls, audits, certifications etc. Requirements are constantly changing and outside expertise is often required to keep up-to-date. • PCI DSS – will continue to have updates • USPS, Canada Post et al continuous state of pain • OSHA - hazard communication (Haz Com)
  7. 7. 7 Copyright Insight Forums LLC 2014 Regulatory Risk Rolls Down Hill Corporate Compliance Supplier Compliance Issues/ Catalysts Regulators Potential for structural change
  8. 8. 8 Copyright Insight Forums LLC 2014 Trending Issues Driving Regulation Global Issues • Economic Stability (post-financial crisis) • Tax / Financial Accounting Reform • Privacy (NSA did not help this situation!) • Security “Terrorism-Era” Reforms US Healthcare (economy related) Secure management and appropriate analysis of corporate, national and personal data is global theme.
  9. 9. 9 Copyright Insight Forums LLC 2014 Financial Services: Dodd-Frank Dodd-Frank Wall Street Reform & Consumer Protection Act The most comprehensive financial regulatory reform measures taken since the great depression. • Oversight and supervision of financial institutions, • New resolution procedure for large financial companies, • New agency: Consumer Financial Protection Bureau (CFPB), • Reforms the regulation of credit rating agencies, • Changes to corporate governance and executive compensation • Incorporate the Volcker Rule (prevents depository institutions from engaging in proprietary trading among other things) • Registration of advisers to certain private funds, • Significant changes in the securitization market. Catalyst? Economic Meltdown
  10. 10. 10 Copyright Insight Forums LLC 2014 One Result: The CARD Act Structural Change in the Lending Market Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act) • Prior to 2010 industry earned 73% of card revenue from interest, 17% from fees and 10% from interchange fees. All were reduced and capped. • Communications were overhauled (Shumer box!) • Credit industry complied – and found new sources of revenue. CARD Act Fact Sheet
  11. 11. 11 Copyright Insight Forums LLC 2014 Healthcare: Affordable Care Act Patient Protection & Affordable Care Act (ACA) Structural Change! • New Market of Un/Under-Insured • Marketing Direct to Consumers • Healthcare Exchanges • Medical Loss Ratio – @ 70% of premium$ must be spent on care Seek new sources: Use of PHI for treatment-related marketing communications for which financial remuneration was received, provided the individual was given notice and could opt out. + New Documents More mailings Process Improvements
  12. 12. 12 Copyright Insight Forums LLC 2014 HIPAA Omnibus Rule Changes 2013 Rules Affecting Marketing using PHI (September 2014) • Now, marketing communications about a third party’s products or services for which financial remuneration is received by the covered entity require authorization from the individual, (with few exceptions). If your organization uses PHI to market its own, or a third party’s, products and services, your organization should: 1. Draft a form authorization to cover multiple, ongoing marketing communications; 2. Implement or refine a process for tracking marketing communications and related authorizations to ensure that the recipients have signed authorizations or an exception applies; and 3. Ensure that business associates and their subcontractors follow procedures that are materially the same.
  13. 13. 13 Copyright Insight Forums LLC 2014 Healthcare +: HIPAA HITECH September 22, 2014 Covered entities must bring all of their Business Associate Agreements (“BAAs”) into compliance with the Rules; the new Rules also apply to Business Associate’s agreements with their own covered subcontractors. Changes include imposition of direct liability under the Rules on Business Associates for compliance with certain HIPAA Privacy and Security Rule requirements. Increased fines for non-compliance. • Not less than $1k and up to $50k per violation
  14. 14. 14 Copyright Insight Forums LLC 2014 Are Companies Complying? Thomson Reuters 2013
  15. 15. 15 Copyright Insight Forums LLC 2014 Financial Services: Gramm- Leach-Bliley Act “Almost 45 % of respondents do not outsource statement printing to a GLBA-compliant vendor… …GLBA requirements must be enforced throughout the statement composition and preparation process and validated through a series of quality tests and periodic audits. Recommended practice is for outsourced print vendors to be reviewed annually by federal and state bank examiners according to FFIEC guidelines.” CSI: 2013 Banking Priorities Study Are you outsourcing to a GLBA-compliant vendor?
  16. 16. 16 Copyright Insight Forums LLC 2014 Get Uphill from the New Regulations Pay attention BEFORE they become law • Be aware of your client’s position (industry lobby) • Understand what may “roll down hill” • Participate in your industry associations • Write Congress • Participate in “Calls for Comment” Raise Your Voice! USPS CFPB DOL EPA Congress States
  17. 17. 17 Copyright Insight Forums LLC 2014 Camp and Baucus Proposals: “Ad Tax” 50% of advertising expenses would be immediately deductible. Remaining 50% would be capitalized and amortized over 10 years. First $1,000,000 of advertising expenses are exempt. IHS Global Insight estimates “ad tax” could reduce advertising-induced sales in the U.S. by more than $446 billion and place 1.7 million U.S. jobs at risk. (I’m skeptical) Impact Direct Mail Statement messaging Catalogs Corporate Reorganization More fragmented marketing departments
  18. 18. 18 Copyright Insight Forums LLC 2014 Turning Roadblocks Regulatory changes provide an opportunity to reevaluate, redesign, renegotiate and demonstrate value to clients. “Bitter or Better? Break us or Make us? Victim or Victor?” … Into Opportunities
  19. 19. 19 Copyright Insight Forums LLC 2014 Regulations Start Conversations Do You Need a Lawyer to Interpret USPS Changes?
  20. 20. 20 Copyright Insight Forums LLC 2014 What Keeps Clients Awake Show clients you understand their industry and needs. Personal Liability! 2014 Cost of Compliance Survey
  21. 21. 21 Copyright Insight Forums LLC 2014 Understanding Regulations Differentiates Communicate with clients about changes needed to comply –from them and from you. Consider audits and certifications that will set you apart (understand cost). Working with leaders can make you a sought expert with the laggards (charge accordingly.) Market your expertise (but don’t overpromise.)
  22. 22. Regulation Causes Changes. Changes Must Be Tested. Testing is Expensive! Get More Done At Once.
  23. 23. 23 Copyright Insight Forums LLC 2014 Elizabeth’s Regulatory Top 5 1. Don’t Wait for Regulations to Affect You! 2. Look at the Big Picture – Structural Business Change. 3. Learn to work with Compliance – and “work” Compliance 4. Make the regulatory approach part of your design “palette” 5. Understand and plan for the cost of compliance (PSPs) Sites to watch: • Consumer Financial Protection Bureau (CFPB) • Commodity Futures Trading Commission (CFTC) • Federal Reserve System ("Fed") • Federal Deposit Insurance Corporation (FDIC) • Financial Industry Regulatory Authority (FINRA) • National Credit Union Administration (NCUA) • Securities & Exchange Commission (SEC) • State Insurance Commissioners (by state) • State Banking Regulators (by state) • Compliance Week
  24. 24. 24 Copyright Insight Forums LLC 2014 Thank You Questions or feedback on this presentation, please contact: Elizabeth Gooding 800-886-2196 x7 Find me on LinkedIn or follow on Twitter @EGooding