Evolving Regulatory Change Management Mindsets for 2021

All the actions, planning, strategy, and work that organizations have been doing to manage regulatory changes is critical, but it is important to remember where it all comes from. A business will only be able to take the right action and make the right decision if it has the right mindset. Businesses do not simply need to change a few action items in their plans and parts of their strategy if they truly want to succeed – they will have to go beyond and look at the big picture and make sure that all the decision makers and the stakeholders within the organization have the right mindset.

This is important to remember because of the unprecedented nature of not just 2020, but 2021 and 2022 as well. Everyone knows what has been happening and how it has affected the world; however, it is also important to understand that the year 2021 will be very different from 2020 and subsequently the year 2022 will also be different from the year 2021 when it comes to the effects of the pandemic. 2020 was the year where businesses tried to survive the best they can, 2021 is the year where businesses are trying to capitalize on the new opportunities, and 2022 will be the year when the global community will settle into the new normal.

Changing Gears from 2020 to 2021

360factors CEO Carl McCauley recently wrote about six considerations businesses need to think about to prepare for regulatory change management in 2021 for Risk Management Monitor. The first thing he mentions is that businesses need to understand that 2020 was a very different year from 2021. No one was prepared for the pandemic in 2020, which is why the government also gave businesses a lot of leeway in terms of reporting and monitoring. Not only that – customers also got a lot of relief in the form of low interest rates, stimulus checks, PPP loans, and much more.

It is important to remember that while the changes that were made in 2020 did help businesses and banks and even the consumers, they introduced some new challenges as well. Rule changes also add new risks or modify existing risks, such as new default rates around extensions, forfeiture, and other issues. For banks, historically low interest rates, for example, pose a vexing risk because they are dealing with less profit but the same number of loans to process.

2021 Is the Year of the Recovery

The most obvious shift between 2020 and 2021 is that the year 2020 was the year of survival and 2021 is the year of recovery. Businesses and governments were doing the best they can with a very limited amount of information and without any news regarding the end of the pandemic. 2021 paints a very different picture for the society and Commerce both. Vaccines are now widely available, and the health care industry now knows how to manage the disease much more efficiently than it did a year ago.

This means that businesses will now be returning to more normalized operating standards. All the leeway that was given in 2020 will slowly be taken away. Businesses would have to shift gears and start capitalizing on the new opportunities available instead of simply focusing on survival like they did the year before.

Regulatory change management has always been an art as well as a science. It is a science when it comes to implementing regulations and making sure that all the business processes comply with the new regulations. It is an art as well because the best regulatory change management experts do not simply focus on new regulations but also anticipate regulatory changes. When we look at the statements made by government officials in the previous year most of them talked about managing the pandemic. However, when we look at what they’re talking about now it is clear that their attention has shifted. Additionally, not only has the current administration announced that new people will be taking lead roles in regulatory authorities, but it has also created entirely new designations and roles within the regulatory bodies.

All signs point to a major shift in the way organizations and businesses are regulated. One of the biggest changes is in the way businesses will be evaluated. The days when businesses were only just based on their financial performance may not last a lot longer, as many new factors and considerations are being added to the way business performance and a business’s effect on society are measured. The smart thing to do right now is to make sure that your organization has a regulatory change management framework in place that will be able to quickly adapt with the new rules and regulations expected from the new administration.