09 Jan Creating Content for an Increasingly Regulated World
Content is growing at an exponential rate. It’s also increasingly regulated, particularly in the financial and life sciences industries, as well as for in-house departments like legal and corporate communications. When these industries and departments are also dealing with multilingual content, the challenges multiply.
The two sectors most affected by today’s regulatory environment in the U.S. are financial services and healthcare. In the financial sector, the intensity of the current regulatory environment is the result of misdeeds which led to its near collapse in 2008. The regulations that were created as a cure and preventive measure have since changed business procedures.
In an interview, Prosperity Bank’s chairman and CEO, David Zalman, said: “I’ve been in banking since 1978, and today, probably over half of my time is spent with regulatory requirements. The regulatory burden is a threat to traditional community banking. It is troubling that we don’t always know what the regulators are going to want.”
The 2nd most regulated industry in the U.S., healthcare, has its own unique set of challenges. They’re most apparent when it’s time to bring a new product to market, as the regulatory approval process is very complex.
The Global Picture
The complexity becomes more evident when looking at the global picture. There are over 800 individual regulators worldwide with a huge impact on go-to-market strategies. In MedDev, for example, it can take 6 months to 2 years to launch a product and prepare all the necessary documentation. Any delay can seriously affect budgets and forecasts.
Companies invest millions developing their legal and compliance standards since the consequences of non-conformity can be so severe. For example, last year a medical technology firm paid a fine of $7.8M because the SEC found that their internal processes to detect improper payments in some countries were inadequate. In 2016, a Japanese manufacturer agreed to pay $646M to settle two regulatory cases brought against them.
Counting the Costs
In a survey conducted by Forbes, the majority of the 400 U.S. CEOs responded that today’s regulatory environment has more impact on their business than the economy does. That’s because regulatory systems produce costly rules but breaching regulations could mean the end of a business. Today, the annual cost for an average U.S. firm is $233K or 21% of an average payroll.
An average U.S. company pays $10K per employee per year to comply with federal regulations. The average manufacturer in the U.S. pays double and for small companies even three times the cost borne by the average U.S. company.
When it comes to GDPR, a set of soft rules with tough penalties, it’s the penalties that got everyone’s attention as a data breach could cost a company either 20M EUR or 4% of its annual global revenues.
However, a couple of recent studies demonstrated that making the organization GDPR compliant also costs millions of dollars. The cost for a smaller company is around $50,000. A study by PwC, surveying 300 executives on an international scale, found that 60% spent at least $1 million on becoming GDPR-ready, while 12% believe their total costs will be over $10 million.
There are also invisible costs. Regulatory compliance can slow down innovation and restrict international expansion. Highly regulated industries experience lower productivity growth. In the last 20 years, productivity in the least regulated industries grew almost twice as fast as in the most regulated ones.
Challenges for Regulated Industry Customers
In the financial services industry, regulatory concerns are the biggest hurdle for marketers as everything from content format, channel and messaging can be subject to regulatory uncertainty. This causes marketing leaders to proceed with exceptional caution when working on campaigns.
As a result, financial institutions have often been reluctant to fully engage customers and prospects through social media, email, and webinars; this became even more difficult with GPDR in 2018. However, avoiding social media channels is no longer a choice for marketers as they need to find a way to work on demand-generation campaigns.
That’s why marketers who need to consider their organization’s risk tolerance as they develop social media marketing programs must ensure they partner with a company highly experienced with financial regulatory content, especially when the prospects are high net worth clients.
It’s important to note as well that recent trends are driving an increased reliance on marketing teams in the financial industry to provide risk and compliance review, measure potential risks, and support the corporate model’s risk management goals.
Time-to-Market & Expansion
Last year, over 68B USD were spent on acquisitions in the MedDev sector. When large organizations buy smaller companies, this can mean that many important gaps in regulatory compliance must be corrected. Because small companies often lack resources, budget, expertise, and the proper processes, they tend to not carry out everything as they should have. Aligning regulatory and quality systems to make them compliant with international regulations can impact integration and the ability to keep products on the market.
Another challenge is the difference in marketing materials. The large company will likely plan to distribute the newly acquired product lines in their current markets worldwide, while the small company may only have marketing materials prepared in a few languages.
In the MedDev industry, the FDA considers some of the documentation as a medical device as well. Surgical protocols, or instructions for use (IFUs), are highly regulated since they must accurately describe the intended use and provide instructions on how to safely use devices. Errors in IFUs can lead to adverse patient effects and there have been instances where errors in the IFUs have led to product holds and recalls, costing manufacturers credibility and millions of dollars.
Quality is key because it can affect future business – some RFPs for healthcare devices now require suppliers to provide information on mandated recalls and that could have a negative impact on a tender being awarded.
When dealing with global content, accurate translations are more important than ever, working with a supplier that is an industry expert can save companies millions.
Accessibility: Disability Shouldn’t Be an Obstacle
The Americans with Disabilities Act (ADA), enacted in 1990, requires most consumer-facing businesses, such as restaurants, hotels, hospitals, and museums, to accommodate disabled people. The growth of online commerce has prompted the government to enforce the law in the virtual marketplace in the form of 504 and 508 compliance.
504: Requires that agencies provide individuals with disabilities an equal opportunity to participate in their programs and benefit from their services, including the provision of information to employees and members of the public.
508: Requires that institutions receiving federal funds provide equal or alternate/comparable access to federal employees and members of the public with and without disabilities.
The cost of digital discrimination is actually quite high – some enterprise companies have faced lawsuits alleging their websites offer poor accessibility for the disabled.
A large retail company had to pay roughly $10M in damages and legal fees to settle a class action lawsuit with the National Federation of the Blind and agreed to make its site accessible to the many disabled customers who had trouble navigating it.
The National Federation of the Blind filed a lawsuit against a major tax services company. After an agreement, the company paid $100,000 in civil penalties and damages. That amount is likely a small fraction of the cost they paid for lost customers because of lack of accessibility.
Compliance: Obstacle or Opportunity?
If we look beyond the immediate challenges of compliance on business, we can detect the opportunity to leverage them as a source of sustainable competitive advantage. This will allow forward thinking and committed institutions to reconsider how their businesses are conducted to benefit their stakeholders.
Since organizations are so focused on regulatory issues, it makes sense to derive value out of new regulatory compliance processes. Tim Zuber, a regulatory center leader at KPMG says: “One way to do so is to take data that in the past has been used almost exclusively for tax compliance purposes and use it to drive additional value.” For example, it could be analyzed to provide new or better insights on product and customer profitability that otherwise was not known, and improve the decision-making process.
Regarding GDPR, its purpose was to serve the wider ethical principle that every person should be able to engage with the digital world, confident that their private information will be secure. However, this enforced good marketing practices since customers have the power to opt for content that’s relevant to them.
Accessibility provides us with an opportunity to achieve greatness in design. By approaching accessibility as a creative challenge, we can see clearly the factors that enhance user experience and avoid the issues that over time make interaction difficult, inefficient, and physically tiring. By studying and removing the issues that are practically impossible for someone with a disability, we boost UX for everyone.
Insights gained by addressing these concerns can result in products that are more delightful for everyone. Apple’s VoiceOver and Siri are examples—their screen reader and speech recognition software make mobile devices easy to use for people who can’t see and help them navigate, listen to and send emails and text messages, switch songs while driving and control everything from media devices to refrigerators.
One method is to focus on delivering quality experiences, which will bring ROI in the long term. Apple’s Tim Cook said, “When we work on making our devices accessible by the blind, I don’t consider the bloody ROI.” Apple is profitable and can afford to ignore ROI in some areas. “Apple makes a lot of money not only because it has an efficient supply chain but also because it has created a customer ecosystem that, as a whole, delights customers and makes them want to stay as an Apple customer.”
So accessibility is something we must address in order to meet legal obligations, but when done right, it’s a way to cut costs, build new capacities, establish partnerships, and learn what’s needed to design experiences that delight customers.
In the end, it’s the customer who’s taking control over the customer journey. The digital revolution changed the way people shop, both online and offline, and started an era of the empowered customer. Customers nowadays require quality experiences and the companies offering them will stand out in the market.
We bring comprehensive localization services to highly regulated industries, specializing in regulated markets and closely follow these regulations: PRIIPs, MIFID, KIID, FATCA and fund commentaries in the financial sector.
We also use this knowledge in new premium emerging verticals such as Fintech, Regtech and InsurTech, by developing solutions that help them during their global launch phase, based on our expertise and leading position in premium verticals.
Our proprietary technology, SDL MultiTrans, is specifically suited to regulated industries because it’s secure and offers audit and reporting capabilities.
We have over 25 years’ experience helping financial services and life sciences firms, as well as legal and corporate communications departments, efficiently handle their multilingual regulatory content. Get in touch to learn more.