Closing the Loop: Making Compliance Monitoring and Testing Work

Closing the Loop: Making Compliance Monitoring and Testing Work

An effective compliance program must not only set policies but also implement robust compliance monitoring and testing. Yet, according to an article by Navex, many organizations struggle to understand what that truly entails.

While regulators, such as the US Department of Justice and the UK Serious Fraud Office, clearly emphasize the importance of “timely and effective monitoring and testing,” the distinctions between the two and how to implement each are less clear in practice. 

For risk and compliance professionals, understanding the differences and structuring these efforts strategically is essential to reducing exposure and maintaining regulatory credibility.

Monitoring refers to ongoing observation of compliance controls in action. It may include dashboard reviews to track training completion or exception requests, which demonstrate how the program operates on a day-to-day basis. 

Testing, however, simulates risk scenarios to stress-test whether controls perform as expected under pressure. Both are essential, but deciding when to monitor versus test depends on the risk level, known process gaps, and changes in the regulatory or business landscape.

The article emphasizes the importance of strategic planning. Organizations need a structured risk register and control library, ideally supported by compliance technology, to align controls to risks and schedule testing activities. A documented testing plan, complete with rationale and procedures, ensures consistency and transparency. Equally important is the ability to act on findings—remediating gaps, updating policies, or delivering targeted training—to close the feedback loop.

For compliance programs to remain credible and responsive, monitoring and testing must be continuous and integrated with broader governance. These are not one-off tasks; they’re an ongoing cycle of evaluation, action, and adaptation. Without this dynamic loop, even the most sophisticated compliance frameworks risk falling short when it matters most.