Compliance outsourcing is an efficient solution for companies to meet complex regulatory requirements without sacrificing resources they could use to grow and innovate.
For medium to enterprise level businesses who have been in the game a long time, compliance management gets more complicated every year. For the smaller, digital native startups, it can feel like you have a lot to catch up with before you’re even off the mark.
But currently only 24% of firms use compliance outsourcing to alleviate the pressure of this complex – and not especially exciting – part of business.
While in-house teams can carry a piece of the burden, the costs of building the team and automation will only increase as you grow larger and into new markets, and receive more scrutiny from regulators.
In this guide, we’ll take you through the business case for outsourcing your compliance, as well as what they actually do.
Table of contents:
- What do regulatory compliance outsourcing businesses do?
- How do compliance BPOs function differently from in-house compliance teams?
- Why should you consider outsourcing your compliance?
What do regulatory compliance outsourcing businesses do?
Regulatory outsourcing companies are specialists in providing organizations with the expertise, regulatory insight and resources to support industry-specific regulations. They typically execute against a playbook you or a consultant created.
On top of the industry-specific nitty gritty, regulatory compliance outsourcing also covers the broad requirements that govfern most companies like data privacy, anti-money laundering (AML), anti-bribery and corruption, cybersecurity and sustainability.
But, what can regulatory outsourcing companies do for you?
Going beyond the regulatory playbook
Compliance outsourcers execute your regulatory playbook, but they also add expertise in things like tech and automation to reduce the manual work, operations, data management, managing high volumes of document processing, privacy, and infosec standards and onboarding.
Regulatory outsourcing helps you get back the time and cost of taking on these tasks yourself, and mitigate the compliance risks of getting these manual tasks wrong. They can take on your day-to-day compliance work and help fill the gaps in any in-house teams. But that doesn’t mean you should do away with your in-house compliance function.
How do compliance BPOs function differently from in-house compliance teams?
You may have an established in-house compliance team at your disposal but the benefits of working with a BPO compliance partner on top of this are numerous.
Elasticity
Compliance outsourcing can give your company the flexibility to freely scale up and down compliance programs based on changing needs. For example, if you suddenly lose in-house compliance team members, a new regulation passes or you want to enter a new market, you may need to rapidly grow your capacity.
Internal compliance teams are difficult to adjust quickly, whether up or down. Good BPOs have armies of recruiters well-versed in hiring for those exact skills, as well as onboarding and training. They also have access to existing talent pools. And it’s a lot easier and less painful to wind down a BPO engagement than scale down your in-house team. Especially for smaller companies, scaling down rapidly comes with its own complications. One of the reasons for this is our next point…
Resourcing and costs
In-house compliance teams may be required to split their time between compliance functions and other business responsibilities, especially in times of peak demand. On top of this, the costs associated with hiring, training and retaining full time employees can add up, affecting your bottom line and employee satisfaction.
Compliance outsourcing have dedicated resources focused solely on compliance, meaning they have no issue allocating the right amount of attention to tasks, no matter how pressing. They can also effectively use economies of scale to provide services more efficiently, at a lower cost per customer for your business.
A good BPO also understands how to find talent in cheaper labor markets without sacrificing quality. They should understand how to find talent outside your area that matches language, culture and regulatory context.
Independence/partnership
Outsourced compliance companies have the luxury of working independently from and with your business. This can help them be unbiased and objective when it comes to data collection and reporting, and be totally transparent with your team at the same time.
Internal teams may face pressures to overlook compliance issues in the name of maintaining good relationships with partners or executives.
Overall, BPO compliance requirements can be met with more detail, cost-effectiveness and understanding.
Why should you consider outsourcing your compliance?
Firstly, it’s important to realize that you don’t always need to outsource every in-house compliance function to an outsourcing compliance company.
Keep compliance in-house when:
- Situations require an insider’s understanding of your unique business, e.g., creating procedures to keep members of your company from making mistakes or inappropriate decisions. Highly nuanced decisions should be kept in house.
- BPOs do their best work on volume, where it makes sense to create repeatable processes. One-off situations are often better handled in house, but there are exceptions, such as remediation projects, where you require additional resources on top of BAU that can be difficult to find if kept in-house.
Consider using an outsourcing compliance partner when:
- Tasks don’t require an insider’s view of your business, such as training seminars and candidate screening.
- You need to keep 24/7 systems such as whistleblower hotlines online.
- Situations where you need expert advice and guidance immediately, like a sudden change in a regulation that leaves you without enough time to train in-house compliance teams.
- If you’re expanding geographically, you’ll have to quickly adapt to the local regulatory requirements and be aware of any changes or external forces that may affect you. In this case, an outsourcer who is already aware of these issues will be able to do this faster.
When choosing the right compliance outsourcing company for your needs, it’s important to recognize that there is no “one-size-fits-all” approach. Compliance, like customer experience and market forces, is ever changing; what got you here won’t get you there.
Need help managing your regulatory compliance requirements? We have the experience under our belt to provide the most adaptive and comprehensive service to help mitigate the risks of your specific industry.
Take a look at our services, or get in touch with us.
