Compliance Fatigue and Bloated Cost of Control

Compliance Fatigue and Bloated Cost of Control

| By Karmine Team | Category: Opinions

Background

Let us for illustration purposes understand the approximate scale of the compliance requirements for mid-sized enterprises in India.

India’s regulatory ecosystem has tens of thousands of requirements, over 69,000 unique compliance requirements across 1,536 laws by one count. These are not abstract numbers; they translate into a daily grind of filings and checkpoints.

A medium-sized manufacturing company in India, for example, might need to comply with 5,500+ distinct regulations, whereas even a small manufacturing unit must follow around 750 regulations. These include everything from labor law registers and tax returns to factory safety displays and environmental permits.

TeamLease Regtech, a compliance technology firm, estimates that an Indian MSME with just over 150 employees faces 500–900 applicable compliance requirements. It’s no surprise that business owners feel the weight of this “control bloat” in their operating costs.

Although the organizations are free to assess their own risk appetite and calibrate approach to suit a “Risk Based Approach”, in reality, the fear of potential non-compliance leads to excessive compliance burden.

Rising Compliance, Spiraling Costs, Unclear Value

One of the clearest signs of “compliance fatigue” is the growing cost of compliance, relative to its perceived benefit. Compliance budgets have been rising rapidly, often without commensurate clarity on what risks are actually being mitigated or value gained.

Despite massive compliance expenditures in certain industries, breaches and fines continue unabated. For instance, global banks collectively paid billions in penalties in recent years even as their compliance departments grew larger than ever. Regulators have openly noted that they remain unimpressed by the amount of money spent on compliance, what matters are outcomes. If compliance spending doesn’t translate to fewer incidents, its ROI is fundamentally in question.

Across industries, leaders are asking hard questions: “What are we really protecting with all this spending?” It’s often difficult for compliance officers to answer with hard data. Ideally, compliance investments protect the business from fines, fraud, data breaches, safety incidents, reputational damage, etc. But quantifying the absence of a crisis is challenging. Compliance’s success is often that “nothing bad happened,” a counterfactual that’s tricky to monetize.

In fact, most organizations don’t even measure their compliance spending in a holistic way. A 2023 survey by Thomson Reuters found that 45% of firms did not monitor the total cost of compliance across the organization in any form. Without tracking cost, it’s nearly impossible to calculate ROI. It’s not surprising, then, that compliance teams struggle to demonstrate tangible value.

The bottom line: Many organizations feel trapped in a compliance cost spiral; pouring more and more money and effort in, without a clear picture of risk reduction or business value out. Business leaders don’t want to write blank checks for compliance; they want to know their investments are actually protecting the company’s most critical assets and stakeholders.

Audit Overload and Tick-Box Compliance Culture

Why Leaders Are Concerned

When we weigh fragmented initiatives, audit overload, ballooning costs, reactive spending, and staff burnout, it becomes clear why many organizations see a cost-benefit imbalance in their compliance programs.

The benefits (risk reduction, avoidance of fines/incidents, improved reputation), while very real, are often opaque and lagging, whereas the costs are immediate, tangible, and rising. This imbalance is leading some executives and board members to question whether they are getting value for money  from compliance.

In blunt terms, if we doubled our compliance spend in the past 5 years, are we twice as safe? Or as one expert framed it: “What is the probability that the usual GRC investments are genuinely protecting the business?”. If that probability is low or unknown, it signals a problem in how the program is structured or measured.

Business leaders don’t want compliance to be a necessary evil; ideally, they want it to protect what truly needs protecting and enable the business to thrive. The challenge ahead is how to rebalance the equation so that the compliance function’s value is as plain as its cost.

Improving ROI Clarity: Strategies for Better Compliance Value

Despite the daunting picture, there are concrete steps organizations can take to rebalance their compliance efforts and improve clarity. Below are several actionable recommendations and strategic shifts that can help transform compliance from a fatigue-inducing cost center into a more efficient, value-driven function:

1 – Adopt a Risk-Based, Strategic Approach:

Rather than treating all compliance activities as equally critical, prioritize resources toward the risks that could most seriously harm your organization. This means clearly answering the question, “What are we really protecting?” Is it customer data? Financial integrity? Safety of employees? Once you identify your crown jewels and top threats, align compliance controls to those areas first.

A risk-based approach also involves defining your risk appetite (what level of risk you’re willing to accept). This helps right-size compliance efforts; in areas of low risk, avoid over-engineering costly controls that don’t add value. By focusing on what truly matters, you can start to quantify benefits (e.g. “we reduced the probability of a major data breach by X% through these controls”) and thus demonstrate ROI in terms of risk reduction.

2 – Consolidate and Streamline Programs: 

  • Break down the silos between various compliance initiatives. Often different teams manage overlapping requirements with separate processes and tools.
  • Conduct a program audit to identify overlap and inefficiency. You may find, for example, multiple teams separately assessing vendor risk or multiple tools tracking similar control inventories. Consolidating these efforts not only cuts cost but improves consistency.
  • Consider establishing an integrated GRC (Governance, Risk, Compliance) framework where a single system maps all controls to relevant regulations. This allows one control (say, an access security control) to satisfy multiple requirements at once, reducing duplicate work.
  • Streamlining should also extend to audits: whenever possible, use a single evidence repository so that one piece of evidence can serve multiple audit objectives, alleviating audit fatigue.

3 – Leverage Technology and Automation:

Invest in modern compliance tools that automate and improve visibility. According to Accenture research, 93% of compliance leaders agree that AI and cloud-based compliance tools can remove human error and automate manual tasks, boosting efficiency.

Some areas to target with technology include: continuous monitoring of controls, workflow tools for policy management and attestation, and data analytics to detect compliance issues early. However, technology is not a silver bullet. It should be implemented alongside process improvements, not just layered on top of bad processes.

4 – Define Metrics and Communicate Value:

To make ROI clear, define key performance indicators (KPIs) for your compliance program that relate to both cost and benefit. It’s notable that nearly half of the firms do not monitor their cost of compliance at all; simply starting to measure it is step one. Next, translate compliance outcomes into the language of business. Even if not perfect, they signal that the compliance function is evaluating its own effectiveness.

5 – Foster a Culture Beyond Box-Ticking: 

  • Cultural change is critical. Tone at the top matters. Leadership should emphasize that compliance is about protecting the company and its stakeholders, not just pleasing regulators.
  • Make compliance part of performance evaluations for everyone, not as an extra burden but as an expected aspect of good business practice.
  • When compliance is culturally rooted, people are less likely to see it as an external imposition and more as a shared value. 
  • Engaged employees are the best defense and also the best champions to demonstrate that compliance work has real impact.

6 – Right-Size the Compliance Organization: 

  • Leverage external expertise strategically. For example, use outside counsel or consultants for niche regulations or periodic compliance program reviews, rather than carrying that full expense in-house year-round.
  • This can provide access to expert knowledge on demand and help answer tricky ROI questions.
  • At the same time, cross-train team members on different aspects of compliance; a well-rounded team can handle a wider range of issues, improving efficiency.

7 – Align Compliance Objectives with Business Goals: 

  • One way to underscore ROI is to tie compliance initiatives directly to business objectives. For example, if a company’s goal is to expand into European markets, frame the enhancement of your privacy compliance (GDPR, etc.) as an enabler of that expansion (gaining customer trust and avoiding legal roadblocks).
  • If the business is embracing digital transformation, position your cybersecurity compliance upgrades as protecting that digital innovation (thus avoiding costly setbacks from breaches). By framing it this way, you shift the narrative from “compliance is a cost we must bear” to “compliance is helping us achieve X business outcome securely.” 
  • Consider building “compliance by design” into product development and strategy, ensuring that new initiatives consider regulatory requirements from the start. 

8 – Review and Reduce Bureaucracy: 

  • Periodically conduct a “clean-up” exercise. Many compliance programs accumulate layers of checks over time (often as reactions to past problems) and never shed any.
  • Sometimes, simplifying a control or combining two steps into one can maintain effectiveness and save hundreds of person-hours. Every hour saved is essentially money saved or re-allocated to more meaningful work. This improves the perceived ROI because people see that compliance is mindful of efficiency and not just adding procedures endlessly.

Implementing the above strategies requires effort and commitment, but the pay-off is two-fold: reduced fatigue and higher ROI clarity. Firms that have pursued such improvements report not only cost savings, but a stronger confidence among leadership that compliance investments are worthwhile.

Conclusion

Companies today find themselves juggling a multitude of regulatory demands, from financial controls to data privacy to ESG, with teams that are overloaded and budgets that seem to grow faster than the perceived benefits. The current state in many organizations is fragmented compliance efforts, reactive fire-fighting, and a culture of ticking boxes to get through audits, all contributing to high costs and murky value. Mid-size firms feel this pain acutely as they shoulder enterprise-level rules with far fewer resources.

Yet, it doesn’t have to remain this way. By reimagining compliance through a strategic lens, focusing on risk-based priorities, integrating programs, leveraging technology, and fostering a compliance-positive culture, businesses can turn compliance into a more streamlined, proactive, and yes, valuable part of operations.

In the end, the goal is to establish compliance programs that confidently answer the ROI question. That means being able to articulate, at a high level: Here’s what we’re protecting, here’s what it would cost if we failed, and here’s how our compliance efforts prevent that. 

Sources:

  • Wipro Sustainability Report FY 2023-24 – warning against “compliance fatigue” leading to a checkbox mentality 
  • LinkedIn (A. Agarwal) – challenges for mid-sized firms: limited resources, staff burnout, manual processes 
  • TeamLease Regtech report
  • NorthRow/Drata 2023 survey
  • Indian Economic Survey 2024-25
  • DigFin (LexisNexis study)
  • Drata 2025 survey
  • Secureframe (2024), “Overcoming Audit Fatigue: Causes & Mitigation Strategies” 
  • Thomson Reuters (2023), Cost of Compliance Report 
  • National Association of Manufacturers – NAM (2023), “Regulatory Onslaught Costing Small Manufacturers 
  • PwC (2023), “Risk and Compliance Reimagined: Unlock Hidden Savings” 
  • Corporate Compliance Insights (2023), “From Firefighting to Future-Proofing” 
  • Sprinto (2024), “100+ Compliance Statistics for 2025”