Compliance and risk teams in financial services companies not only have to cope with managing and mitigating risk across the firm, but also keep on top of changing regulations and new and emerging risks. Having the right staff in place is crucial to the success of the business, however what happens if they leave or are off ill?
Increasingly, companies are tackling this challenge by bringing in interim compliance solutions to fill the resource gap in their team and add value by helping them meet the dynamic needs of modern compliance.
Although, compliance outsourcing is happening more and more at all levels in compliance functions in the UK, we would recommend that it is on a temporary basis, and not as a full time, permanent solution, especially for in-house roles such as:
- Heads of Compliance
- Heads of Risk
- Money Laundering Reporting Officers (MLRO)
- Data Protection Officers (DPO)
In this blog, we look at when you might need interim compliance solutions and how to make the most out of these roles.
Why bring in interim compliance and risk resource?
Firms are facing resource issues in their compliance functions and the growing need for compliance means it can be difficult to find the right people, at the right time to staff your team. When might you require interim compliance resource?
- Temporarily replacing a member of the compliance team, an MLRO or a DPO.
- Helping to fulfil a specific one-off project which is not part of business-as-usual activity – a large remediation project.
- Working towards company-wide objectives to bolster a compliance unit which has to deal with new regulations and risks.
- Bringing in an external perspective to review a firm’s compliance operation with fresh eyes.
- Adding deep domain expertise to help a company to adjust to a new regulatory compliance requirement or confront a specific risk, such as cyber security.
- Start-up payment and e-money institutions often grow rapidly, and their number of clients and level of regulatory risk increases in tandem. An interim compliance role can assess how the firm’s compliance approach should adapt in proportion to this growth.
Interim is opportunity: The benefits of outsourcing compliance
Our clients tell us that the addition of an expert on an interim basis can bring wider benefits to the company and leave its compliance function in better shape for the future. Successful examples include the following.
- A major bank had a large and long-established compliance team. Due to some internal changes, it was recommended that an external expert provide an independent review of current policies and controls. This resulted in a remediation project where the client engaged fscom to implement corrective actions over a six-month period.
- A large payment service provider dealing with international remittance required dedicated project management to provide compliance assistance and consultation. We were able to provide a senior compliance associate for a period of three months, taking pressure off the senior compliance team but also bringing forward valuable industry insight for process improvement.
- A small Fintech start-up benefited from bringing in one of our highly experienced experts for a six-month period where they were able to share best practices and recommend a structure which was proportionate to the business’ size and risk. Getting this right at the start saved the company time and effort and freed up the firm’s founders to focus on growing the business rather than becoming compliance experts.
Interim compliance experts bring deep domain expertise of financial services’ firms business models and the sector as a whole. They also understand trends in regulatory approaches and emerging risks. Busy in-house compliance teams are often snowed under by their day-to-day workload and unable to see the wider view.
Contact us today
fscom provides a full suite of interim compliance solutions. In addition to the benefits listed above, our interim consultants can also draw on fscom’s full support team of subject matter experts in regulatory compliance, financial crime and cyber security. If you are looking for highly qualified compliance experts to implement a one-off project or a temporary replacement of a member of your team, contact us today for a free confidential consultation.
This post contains a general summary of advice and is not a complete or definitive statement of the law. Specific advice should be obtained where appropriate.
