By Sandeep Agrawal
The digital revolution in India is gathering steam, with more and more services adopting technological solutions. What was once thought to be an impossible task is now a reality as everyone, from roadside vendors to pop-up shops to high-end shops and establishments, accepts payments via UPI. While our ears have gone numb with reports of record-breaking figures, NPCI reported 9.96 billion transactions worth Rs 15.3 trillion in July 2023, we must not forget that this growth is a result of increasing access and affordability. The average Indian is now connected to high-speed Internet via smartphones and wants instant delivery of goods and services.
The pandemic years pushed the development of digital medical technologies by decades, with Aarogya Setu and CoWIN taking on the responsibility of contact tracing, booking vaccine appointments, and generating vaccination certificates. Not ready to be left behind, India Inc has also adapted to and integrated digital technologies into its business processes. Remote working solutions have allowed corporations to seamlessly shift from operating from a central physical location to being a spread-out organisation that is connected 24x7 via business management and communication solutions.
The support from the government has been instrumental in enabling businesses to amalgamate digital solutions and processes. One such instance is the digitalisation of income tax, wherein the income tax portal has become one of the most effective tax administration tools in the country. The user-friendly interface, e-documentation trail maintenance, speedy processing of returns and refunds, faceless assessments, and computer-based scrutiny have made it popular among businesses. Consequently, enterprises are actively adopting digital/automated tools to aid in tax functions, thereby automating transactional taxes, annual compliance, and data reconciliations.
Taking a step further, the digitalisation of compliance processes has become a key step for businesses looking to modernise and transform their business processes and compliance operations. In the case of tax regulations, both indirect and direct tax portals have become the flag bearers of API integration and straight-through filings that have allowed businesses to stay on top of their compliance obligations. With more and more compliance portals incorporating the principles of an open compliance grid, businesses will soon be able to take care of all their filings, returns, registers, and challans, among others, via a single digital platform.
Entrepreneurs are understandably wary of inadvertently breaking the law due to the steep penalties that can result from it. The approach to regulatory compliance is also becoming more vigilant and demanding among boards of directors, CXOs and key managerial personnel (KMPS). Since the repercussions of non-compliance with regulations are severe, companies are actively searching for solutions that will provide them with greater insight and management over their compliance processes. They are rapidly shifting towards compliance management that is more automated, digital, traceable, and event-based and away from processes that are ad hoc, manual, anecdotal, and people-dependent.
Technology has completely changed how employers approach compliance. Digital compliance management solutions are laced with features like tracking and managing compliance obligations and automatic collection, creation, and storage of compliance records and documents in the required format. The tracking feature further lets the enterprise keep track of compliances that apply to the enterprise, its contractors, and third-party vendors. The automation layers make it possible for compliance documents to be generated automatically in the right formats. Working in conjunction, they make it easier for organisations to switch from "reactive" compliance to "dynamic" compliance, which can keep up with the dynamic regulatory ecosystem.
Modern compliance tech has empowered compliance teams by creating a central repository of compliance documents stored in a verifiable, transparent, and tamper-proof manner. It allows for streamlined preparation and transfer of documents and approval and storage in adherence to the applicable standards, formats, and regulations. These digital solutions have given employers the ability to avoid instances of poor and non-compliance that are a result of lapses, delays, and defaults caused by manual processes.
Today, corporate India is readily adopting digital solutions that leverage Web, mobile, cloud, and analytics to offer end-to-end automation to stay on the right side of the law. Incorporating RegTech into business processes and, by extension, into the DPI with initiatives such as the Unique Enterprise Number (UEN), Enterprise DigiLocker, and API-enabled straight-through filings will transform the regulatory ecosystem. It will be a crucial step towards eliminating the lingering regulatory cholesterol and embracing the three-vector framework of rationalisation, digitisation, and decriminalisation for simplifying the complexities of compliance.
(The author is the Director and co-founder of Teamlease Regtech)
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