4 Benefits of Outsourcing Compliance That Will Help Your Business
What is compliance outsourcing?
With rapidly growing regulatory complexities bogging down risk management and compliance work, more and more businesses around the globe are seeing the benefits of outsourcing compliance to trusted third-party providers.
Compliance is a critical part of the business because it ensures that all its operations are following laws, regulations, and enterprise standards. Failure to meet compliance requirements has huge repercussions that can cost huge fines and, worse, damage to reputation and existing business relationships.
The heavy emphasis on the importance of compliance is demanding more skills, deeper knowledge, and better technology from businesses, which alone can be costly and difficult to meet, especially when other companies are trying to resolve the same issue.
Outsourcing compliance is a strategy wherein an organization hires a third-party provider to take over certain compliance functions to help its core team focus on parts of the process that have the highest direct impact on their business.
Partnering with experienced providers has allowed many companies to save time and resources while increasing their capacity to respond to various updates in regulations that concern different facets of their business – a critical improvement to keep up with the ever-changing compliance trends.
Can compliance be outsourced?
Despite the obvious benefits of outsourcing compliance, some companies are still hesitant in engaging with a third-party provider because of issues with control, accountability, and data privacy, which leaves other companies asking, “can compliance really be outsourced?”
The short answer is yes, like most business processes, compliance can be outsourced safely. But there are still a few things a company needs to understand and consider before looking for a partner to ensure that they get the most out of this strategy.
First, companies must understand that accountability ultimately rests on them, not the outsourcing partner, even if a compliance issue occurred on the side of the outsourced team. Just because you pass an aspect of compliance work to an outsourcing partner doesn’t mean you also pass off responsibility.
The misconception about accountability is one of the few reasons why some companies are having second thoughts about outsourcing compliance. Others also raise the fear of having a bad time managing an outsourced team, especially if their partner is located offshore.
One thing that companies must know is that there are already tried and tested solutions to these perceived problems, such as following clear communication frameworks, setting key performance indexes (KPIs), using shared systems, and establishing escalation and governance structures.
For example, setting KPIs and clear timelines, scheduling regular standups, and assigning a point person for your outsourced compliance team will ensure that you are on top of every situation. This will ensure that you will be the first one to know about even the smallest problems so they can be resolved quickly.
Lastly, a company must already have a good and working compliance workflow on its own before outsourcing. Remember, you do not engage outsourcing partners to repair broken processes. You hire them to improve your compliance processes with talent, technology, and infrastructure support.
Moreover, before outsourcing, a company must purposively decide what parts of the compliance process to outsource, and what functions must remain in-house. It is also the duty of company executives to communicate the rationale behind outsourcing to their in-house staff.
If the in-house compliance team understands how the outsourcing team can help them perform their tasks better, it will be easy to get buy-in from everyone. A good synergy between the in-house and outsourced compliance teams will do wonders for your business.
In-House vs Outsourced Compliance
Combining the best of both worlds is always the better solution in doing compliance work. And when it comes to choosing which compliance functions to outsource and which ones should stay within the company, there are several things to consider.
First, there will always be a part of the compliance process that requires knowledge that is unique to your business. There will also be compliance processes that require knowledge of confidential company information. If this is the case, it may be better if you leave this compliance function in-house.
On the other hand, all the other compliance functions, such as auditing, bookkeeping, and whistleblower hotlines to name a few, are good choices for outsourcing. It is also a good idea to outsource certain processes when there is a need to adapt to sudden regulation changes.
Outsourcing is flexible enough to provide emergency plug and play staffing solutions when a sudden need arises. Businesses can get a couple of staff or even a team that can do compliance work for a few months until their in-house team has cleared all the other tasks at hand.
The Benefits of Compliance Outsourcing
With a proper understanding of its dynamics, the rewards of outsourcing compliance can be transformative. With the right partner, outsourcing can give you access to specialists, technology, and systems, relieve tons of workload from your core team, and give you huge savings.
1. Access to compliance specialists
The growing complexity of regulatory compliance demands more skills and knowledge that may require specific specialization. But finding specialists in the locality can be hard with every company trying to recruit every last one of them.
Outsourcing providers, meanwhile, have access to talent offshore that will suit your exact needs. If you provide a clear direction when it comes to the specific knowledge required for your business, an outsourcing partner will easily find the right compliance specialist that can otherwise be scarce.
2. Focus and efficiency
With the support of outsourced personnel, your in-house compliance team will be relieved of excess work. This will give them a better focus on performing core compliance tasks that have a direct impact on your business.
Your in-house staff would no longer have the burden of running after changes in regulation because the outsourced compliance team can already do that function. With a renewed focus, expect efficiency
and overall improvements in productivity among your core team members.
3. Access to technology and systems
Catching up with the latest compliance trends would require companies to develop new systems and technology. If done alone, this could be costly, especially when you factor the time needed to set up such crucial systems.
However, outsourcing does not only provide talent. Because outsourcing providers are in the business of service delivery, they always have the latest systems and technology used in compliance, which is included in the service packages they offer. You can even customise these systems to fit your needs.
4. Huge savings
Outsourcing providers source talent from countries with lower costs of living, such as the Philippines. This means acquiring talent from these places is significantly lower, leaving you with more resources to allocate for other important aspects of the business.
Moreover, when you have an outsourced team from a different time zone, you can set up a 24/7 operation, which is crucial if you want to keep up with regulatory and compliance trends. Having 24/7 operations will help you mitigate many risks.
More than the savings, the quality of service that outsourcing partners can deliver, especially the experienced ones, would significantly improve your business process and overall productivity, which would only result in growth.
Outsourcing with Emapta, Philippine-based, Australian-owned offshoring firm lets you leverage all the benefits of having an outsourced compliance staff with fully flexible business solutions that will suit your exact needs.
The benefits of outsourcing compliance far outweigh its perceived challenges. In the end, it will always depend on how seriously you will approach this business solution. No matter what happens, outsourcing partners will help you achieve your goals.