Compliance has been thrust into the limelight the last few years but has become more complex and convoluted at the same time. Filing and storing staggering amounts of information according to legal and regulatory policies can seem overwhelming, and organizations often view compliance requirements as a huge nuisance or proverbial thorn in their sides. Do any of these sentiments sound familiar to you?
- “Nothing’s happened so far, so let’s hope our luck continues.”
- “The cost of compliance seems high, so let’s ignore it for now and cross our fingers.”
- “The chances of us getting caught for non-compliance seem relatively low, so let’s just deal with it later if we ever have to.”
The avoidance approach is far more costly in the end
Existing attitudes towards compliance or the “avoidance approach” are problematic for a couple of reasons. Firstly, your luck may run out. Secondly, when your luck does sour, the cost of non-compliance is nearly three times higher than the cost of compliance through implementing governance and compliance frameworks and solutions. In fact:
- The average cost of compliance came in at $5.47 million, while the average cost of non-compliance was $14.82 million.
- The average cost of non-compliance has risen more than 45% in 10 years.
- The true cost of non-compliance for organizations due to a single non-compliance event is an average of $4 million in revenue.
- Organizations lose an average of $5.87 Million in revenue due to a single non-compliance event.
- GDPR fines start at $11 million or 2% of a company’s annual revenue for corporate abuses and disclosure of user information.
Cautionary tales of fines and penalties
If you’re looking for examples of how not to do compliance, you don’t have to look very far. Recent enforcement actions show that recordkeeping failures and inadequate governance remain costly.
In August 2024, the U.S. Securities and Exchange Commission charged 26 financial firms with widespread failures to maintain and preserve required electronic communications. The firms agreed to pay $392.75 million in combined civil penalties, with several organizations receiving penalties of $50 million. Read the SEC enforcement announcement.
Privacy regulators also continue to increase enforcement activity around the world. According to the 2024 GDPR Enforcement Tracker Report, more than 2,000 publicly known GDPR fines had been recorded through March 2024, with total penalties reaching approximately €4.48 billion (US$5.1 billion).
These examples serve as an important reminder that the cost of non-compliance extends well beyond fines. Organizations may also face legal expenses, operational disruption, reputational damage and lost business when governance and compliance controls are not in place.
Reputation and business damage from non-compliance
While fines and penalties for organizations not in compliance are astounding, they are only the beginning. The impact of compliance breaches or lapses and not implementing robust governance and compliance programs extends much farther than the top line. Here are four additional hidden costs of non-compliance:
1. Expensive and time-consuming lawsuits
If your organization is violating laws and regulations, it’s open to governmental sanctions and lawsuits from customers, employees, and institutions.
2. Business disruption
Non-compliance can bring your business to an immediate halt while you spend time correcting non-compliance changes. Cost estimates from business disruption are over $5 million on average. In a recent Colligo webinar poll, 33% of respondents reported they had experienced business disruption as a result of non-compliance.
3. Decrease in staff morale
Company non-compliance negatively impacts staff morale. In our webinar, How to Fix Your Email Compliance Problem, 33% of poll respondents reported they experienced a decline in staff morale related to non-compliance at their businesses.
4. Reputational damage
When word gets out about your organization’s non-compliance, damage to your brand and loss of customer trust occurs. According to IBM’s 2025 Cost of a Data Breach Report, the global average cost of a data breach was US$4.44 million, while the average in the United States reached a record US$10.22 million.
5. Customer and stakeholder loss
Non-compliance leads to the loss of loyal customers who shy away from a brand they view as unethical.
Overall, the total cost for non-compliance is deemed greater than $14 million, including fines, penalties, business disruption, revenue loss, productivity loss, reputation damage and other fees.
Modern regulation spans industries across the globe
Privacy regulation continues to expand and become more complex. In 2025, 49 U.S. states and the District of Columbia introduced or considered more than 800 consumer privacy bills, while more than 30 states enacted at least 100 new privacy-related laws. Here are a few well-known regulations your company may encounter:
- General Data Protection Regulation (GDPR)
- California Consumer Privacy Act (CCPA)
- Health Insurance Portability and Accountability Act (HIPAA)
- Freedom of Information Act (FOIA)
- Sarbanes-Oxley (SOX)
- Securities and Exchange Commission (SEC)
While each regulation differs in focus and scope, fines for non-compliance or breach of code of conduct can be significant.
The Cost of Non-Compliance in the Age of AI
The rapid adoption of AI tools is creating new compliance challenges for organizations. While technologies like Microsoft Copilot and generative AI can improve productivity, they also increase the importance of strong information governance. AI systems can only be as secure and compliant as the data they can access.
Organizations with poorly managed content, inconsistent retention practices, or excessive user permissions risk exposing sensitive information, confidential records, and regulated data to a much wider audience.
As organizations invest in AI initiatives, compliance is no longer solely about avoiding fines. It is also about ensuring information is properly classified, retained, secured and accessible only to the right users. Strong governance practices help reduce risk, improve audit readiness, and create a trusted foundation for AI.
Learn more about AI-ready data, why metadata is important in the age of AI and unlocking better Copilot results with organized content & email.
Strong governance and information management practices are your best defence
Given the staggering risk and downsides of non-compliance and the comparatively low cost of preventative action, organizations can no longer afford to turn a blind eye and opt to do nothing. Instead, proactive measures are necessary.
Implementing a stringent information management program is key to staying out of trouble.
Centralized governance, the most impactful best practice, involves technology at its core. However, banning certain mediums for communication and collaboration is not enough.
Technology solutions can help you get control of your data, implement centralized policies, employ some degree of automation, make it easy for end users to comply, and enable records managers to understand the risk within their data.
Get control of your content and stay compliant with Colligo
As the costs of compliance are far less than the penalties for non-compliance, utilizing the right technology solutions is essential. Effective use of technology can further reduce your costs and make staying compliant a whole lot easier.
Colligo’s email and document management solutions help make the capture of records easy. They incorporate the capture process into a broader centralized information governance strategy to remove some of the friction from storing, securing, retaining, and protecting content. Of course, an automated process can help augment the human element.
| Compliance objective | Colligo compliance feature |
|---|---|
| Emails filed to specified SharePoint location | Email Manager removes the friction from filing emails, increasing governance in organizations |
| All business records filed and tagged to SharePoint | Email Manager provides a frictionless way to save records and promotes records management compliance and policy adoption |
| All business records created saved to SharePoint | Office Connect app makes this easy, in the same way Email Manager helps connect Outlook and SharePoint, right from the Office Apps |
| Manage documents, edit metadata tags, follow workflows required | Colligo Content Manager helps provide capability to manage and edit content in one single location |
| Know where sensitive or confidential information resides | Designate SharePoint as the repository or System of Record; Colligo’s suite will help your organization get content in the right place |
Now is the time for digital compliance
A digital information governance solution like Colligo lowers your risk of non-compliance by helping you organize, file, and tag your even your most unstructured data. We reduce the cost of compliance while increasing effective governance.
According to PWC, “now is the time for compliance to define a radically different way of operating than it does today: a way that has a digital core.” Leverage technology to automate more of your email and content ingestion, optimize content management, and better access and manage content at the user and admin level. Doing so enables you to take proactive stance that doesn’t rely on luck.
For more information on how Colligo can improve your governance and stay compliant, get in touch.