What is a Compliance Risk?
Definition
Potential for violating regulations, standards, or contractual obligations resulting in fines, restrictions, or reputational damage. Compliance risks include data protection violations, security breaches, privacy law violations, and contractual non-compliance. Organizations assess compliance risk during vendor evaluation, examining vendor certifications, audit results, breach history, and compliance programs. RFPs should require vendors to demonstrate compliance capabilities and risk mitigation approaches.
Why This Matters
Compliance violations result in fines, restrictions, and reputational damage. Organizations should assess compliance risk during vendor evaluation examining certifications, audit results, breach history, and compliance programs. RFPs should require vendors to demonstrate compliance capabilities and risk mitigation approaches. Compliance risk assessment protects organizations from regulatory penalties and operational disruption.
Related Terms
Showing semantically related terms from our RFP knowledge graph. Priority connections are highlighted.
Essential Connections
Risk Assessment
Security & Compliance
Systematic process of identifying, analyzing, and evaluating potential risks associated with a vendor or software solution.
Regulatory Compliance
Security & Compliance
Adherence to laws, regulations, and industry requirements governing data protection, privacy, and operations.
Security Compliance
Security & Compliance
Adherence to security standards, certifications, and regulatory requirements to protect data and systems.
Privacy Compliance
Security & Compliance
Adherence to privacy laws and regulations governing collection, storage, processing, and sharing of personal data.
Vendor Due Diligence
Vendor Management & Evaluation
Comprehensive investigation of a vendor's financial health, operational capabilities, security posture, and customer satisfaction before contract signing.
Vendor Qualification
Vendor Management & Evaluation
The process of verifying vendors meet minimum requirements for financial stability, industry experience, customer references, security certifications, and regulatory compliance before allowing RFP participation.
Security Audit
Security & Compliance
Independent examination of security controls, policies, and practices verifying compliance with standards like SOC 2, ISO 27001, or industry regulations.
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