Compliance Risk

What is compliance risk?

Compliance risk refers to the potential for legal penalties, financial losses, or reputational damage that an organization may face when it fails to comply with laws, regulations, any regulatory obligation, or internal policies.

In the context of email archiving and security, compliance risk often emerges from:

• Improper retention practices
• Incomplete records
• Inadequate security controls

Any of these can expose organizations to litigation, regulatory fines, or data breaches. A well-governed compliance program is essential for managing risk across these areas.

What is compliance risk management?

Compliance risk management is the systematic process of identifying, assessing, and mitigating compliance-related threats across an organization as part of a broader risk management process. It requires more than simply reacting to audits; it involves:

• Risk identification – recognizing vulnerabilities in communication, archiving, or data handling practices.
• Policy development – creating clear internal policies (compliance policies) that align with external regulations.
• Technology integration – leveraging SaaS solutions like Mimecast to automate compliance controls.
• Monitoring and reporting – continuously tracking compliance posture and generating reports ready for a compliance audit.

When managed effectively, compliance risk management protects organizations from regulatory penalties, operational disruption, and reputational harm.

Minimizing compliance risk for email archiving

As the complexity of regulations concerning email retention continues to grow, more IT teams are seeking solutions that can help to reduce compliance risk while simplifying email archiving tasks.

The regulatory environment around email archiving has become quite complicated in recent years for several reasons. Email is increasingly used as evidence in legal proceedings – as the primary record of business communication, it can be used document timing, motivation, intent and knowledge of business decisions and transactions. And because email is so ubiquitous and relied upon by so many users, it is the #1 attack vector for malicious individuals seeking to breach defenses to steal data and money. Consequently, email security and retention is increasingly governed by regulations in the government, finance and healthcare sectors, increasing the difficulty of managing compliance risk when archiving email data.

To achieve archiving compliance and minimize compliance risk, organizations need easy-to-use tools that can significantly reduce the time and resources required to manage retention and archiving compliance while automating backup and system recovery. For tens of thousands of organizations worldwide, Mimecast provides the email archiving and recovery management solutions of choice.

Multiple copies of email help minimize email compliance risk

To reduce compliance risk, Mimecast retains three tamper-proof copies of all archived email. Each message is encrypted and stored in data centers in geographically diverse locations. Mimecast retains original email content, messages that are modified by content policy, and metadata that provides proof of delivery and non-repudiation information.

Mimecast also offers an optional Sync & Recover solution for fast and easy mail recovery and contact and calendar data recovery after loss or corruption. And because Mimecast Cloud Archive can retain documents in addition to email, Mimecast can serve as a file recovery software solution in addition to an email backup and recovery solution.

Learn more about email compliance risk and Mimecast.

Types of compliance risk

Compliance risks manifest in several forms depending on industry, geography, and business operations. Common categories include

• Regulatory Compliance Risk – failure to meet laws and regulations such as GDPR, HIPAA, or PCI DSS (including each regulatory obligation) can result in steep fines and sanctions.
• Operational Compliance Risk – risks associated with not following internal processes or industry best practices (i.e., operational risk), leading to inefficiency or exposure.
• Financial Compliance Risk – non-compliance with financial reporting or recordkeeping standards that can impact audits and investor confidence.
• Data Security and Privacy Risk – mishandling sensitive customer or employee data can lead to breaches, identity theft, and loss of customer trust.
• Reputational Risk – even if fines are avoided, non-compliance can harm brand reputation, erode trust, and damage market position.

Understanding these categories helps organizations focus resources where exposure is greatest and prioritize the most relevant risks.

Compliance risk examples

Practical examples illustrate how compliance risks emerge in everyday operations. Each compliance risk example below shows how gaps can surface:

• Healthcare organizations failing to retain patient email communications securely can face HIPAA violations.
• Financial institutions that cannot produce timely email records during audits risk penalties from FINRA or the SEC.
• Government agencies subject to FOIA requests may face compliance gaps if they lack reliable e-discovery tools.
• Corporations in litigation without defensible email archives may lose cases due to inadequate documentation of intent or timelines.

These scenarios highlight why organizations in every sector must take proactive steps to manage compliance risk.

Cloud and data compliance

As businesses adopt cloud-based collaboration platforms, compliance requirements expand beyond traditional email systems. Organizations must now account for:

• Data residency and sovereignty – ensuring data stored in the cloud complies with local and international regulations.
• Data lifecycle management – maintaining control over how long emails, chats, and documents are retained.
• Cross-border transfers – managing compliance when data moves between different jurisdictions.
• Third-party vendor risk – ensuring cloud providers like Mimecast meet stringent compliance certifications and security controls.

Mimecast Cloud Archive is designed with these factors in mind. Its geographically dispersed, encrypted storage architecture provides assurance that cloud adoption does not increase compliance risk but instead strengthens it. These controls should roll up into a centralized compliance management system for oversight.

The importance of compliance training and culture

Technology alone cannot eliminate compliance risk. A culture of compliance must be embedded within the organization:

• Training – employees must understand regulatory requirements and internal policies, particularly around email usage, retention, and security; formal compliance training reinforces these behaviors.
• Accountability – clear ownership of compliance responsibilities across leadership and IT.
• Awareness – ongoing programs that remind employees of phishing risks, retention policies, and compliance consequences.

An organization that treats compliance as part of its culture – rather than an afterthought – reduces human error and strengthens its defenses against both regulatory and reputational risks.

The role of technology in managing compliance risk

Manual processes alone cannot scale to today’s regulatory environment. Technology plays a central role in reducing compliance risk by:

• Automating retention – ensuring email and data are archived according to required schedules.
• Accelerating e-discovery – providing fast, accurate responses to legal and regulatory requests.
• Improving visibility –centralized dashboards that give compliance officers real-time insights as part of a compliance management system.
• Reducing costs – avoiding manual labor and capital investment with SaaS-based compliance solutions.

Mimecast exemplifies this approach by combining cloud archiving, security, and continuity into a single solution that streamlines compliance while protecting business-critical communications—supporting your risk management framework.

Developing a Compliance Risk Mitigation Strategy

Organizations should take a structured approach to compliance risk mitigation:

• Assess regulatory requirements – identify which regulations (GDPR, HIPAA, PCI DSS, etc.) apply to your industry and map each regulatory obligation.
• Map current risks – evaluate existing gaps in email retention, archiving, and security practices, focusing on the most relevant risks.
• Adopt SaaS compliance tools – implement solutions that automate processes and reduce human error as part of a compliance management system.
• Establish governance policies – define retention schedules, security protocols, and escalation paths backed by formal compliance policies.
• Conduct regular audits – use audit logs and reporting to validate compliance and perform a periodic compliance audit to identify new risks.
• Foster compliance culture – reinforce employee awareness and accountability at every level through ongoing compliance training.

By combining strategy, culture, and technology, organizations create a sustainable framework for managing risk that minimizes compliance exposure while adapting to evolving regulations.

Managing compliance risk with Mimecast

Mimecast's 100% SaaS solutions for email archiving, continuity and security enable IT teams to significantly minimize administrative burden while also reducing compliance risk. As a cloud-based solution, Mimecast can be implemented quickly to provide impact on day one. And with no hardware or software to purchase and install, Mimecast enables organizations to avoid capital expense as they work to reduce compliance risk.

Mimecast provides powerful yet easy-to-use archiving capabilities in Mimecast Cloud Archive, a centralized repository for email data, files and IM conversations. To minimize compliance risk, Mimecast gives administrators flexible and granular retention management tools to ensure that the right email data is retained for the right amount of time. Fast search tools accelerate e-discovery while legal hold and case management tools minimize the time required to respond to legal and compliance requests.

Discover how Mimecast can help your organization reduce risk!