Regulatory compliance and accelerating innovation are often framed as conflicting priorities for high growth businesses. The most sustainable businesses, however, view regulation as a systemic input, not a constraint. Embedding compliance in the growth strategy helps organizations build a more enduring business.
Putting compliance at the centre of product strategy
Lottoland is a lottery and casino platform which provides a useful example of how this balance can be achieved in practice. Operating within a highly regulated environment, such organisations must continuously innovate in areas such as user experience and platform functionality, while adhering to strict compliance standards. This requires a strategic alignment between product development, legal frameworks, and operational execution — ensuring that growth does not come at the expense of oversight. This is not a new concept in highly regulated industries. Companies that factor in their legal and compliance teams early in the product development life cycle typically have to do less retroactive engineering. It’s often about building in compliance and regulatory feedback up front in the product development cycle to ensure that features that have the potential to be regulated are deemed safe and compliant by regulators before they are released to consumers.
Regulatory frameworks that support experimentation
The rate at which developments are emerging in the sector is beginning to start to influence regulatory bodies, with moves towards creating testing environments. For example, FCA innovation support in the UK includes regulatory sandbox programmes which give businesses a safe environment in which to carry out the testing of brand new products in real market conditions without risk of regulatory action. Compliant innovation pathways allow for the continuous improvement and development of new developments and innovations without having to choose between their safety and efficacy or their regulatability.
Compliance to multiple regulations is a common challenge faced by many organizations dealing with sensitive information. Following a standard like NIST (National Institute of Standards and Technology) Cybersecurity Compliance Framework is a good starting point for many sectors. By implementing NIST regulatory standards, organizations can strike a balance between the required level of security and their desired level of innovation, thereby satisfying both internal and auditing needs.
Organisational design as a competitive advantage
Where in a company should compliance sit within the organizational chart, and how can compliance fuel, rather than stifle, growth? All the companies consulted had compliance personnel embedded between the Legal department and the rest of the business, usually closer to the Tech or Product departments. Having someone positioned between the compliance checklist and the actual technology implementation helps to reduce bureaucratic hurdles and speed up the time it takes to adapt to changing laws and regulations.
According to McKinsey research, companies that run their governance like a core competence may on average deliver higher long-term revenue growth. The reason: fewer stand-downs and enforcement notices, more investor confidence and quicker entry to regulated markets, in many cases.
Regulation as a long-term growth signal
Companies that frame regulation as a cost may tend to underinvest in the systems required for sustainable growth. But those that factor regulation into their design often end up with more robust products and enjoy greater regulatory, customer, and investor confidence. This is a fundamental distinction between short-term growth and long-term presence.
