CRISC Certified in Risk and Information Systems ControlGovernanceHard
A financial services organization is considering a new product offering that involves complex algorithmic trading and introduces new data privacy challenges. The regulatory landscape for such products is rapidly evolving. To proactively manage compliance risks and ensure the product meets all current and future regulatory requirements, which approach should the organization adopt?
- AFocus on developing robust technical security controls to mitigate all potential risks.
- BOutsource compliance monitoring to a third-party legal firm after product launch.
- CImplement a 'Compliance-by-Design' (CbD) approach, integrating regulatory requirements into the product development lifecycle.
- DDelay product launch until all regulatory frameworks are fully established and stable.
Show answer & explanationAnswer & explanation
Correct answer: C. Implement a 'Compliance-by-Design' (CbD) approach, integrating regulatory requirements into the product development lifecycle.
Given the rapidly evolving regulatory landscape, a Compliance-by-Design (CbD) approach is most effective. It integrates regulatory requirements from the outset of product development, making compliance an inherent part of the design, which is crucial for managing dynamic compliance risks proactively.
Why the other options are wrong
- A. While robust security controls are essential, they address only part of the risk (security) and do not inherently ensure compliance with broader regulatory and privacy requirements.
- B. Outsourcing monitoring after launch is reactive and may not prevent non-compliance during development or integrate compliance effectively from the start.
- D. Delaying indefinitely is impractical and can lead to missed market opportunities, especially in a dynamic environment.
Compliance-by-Design (CbD)
An approach that embeds regulatory and legal compliance requirements directly into the design and development of products, systems, and processes from their inception.
- Proactive, not reactive, compliance management.
- Reduces cost and effort of retrospective compliance.
- Ensures compliance is an inherent system property.
Memory trick: Think 'Build the rules INTO the machine, not bolt them on later.'