As every year passes, compliance is becoming increasingly complicated especially with the various updates and changes to tax laws and employment laws that organisations must contend with. This compliance function requires more skills, experience and knowledge, as a result, there’s a growing need for organisations outsourcing some of their compliance needs. Especially the need for compliance outsourcing increases with the growing regulatory complexity that the compliance teams need to understand and navigate.
Let’s go through a scenario to understand the need for compliance outsourcing. If you are a business owner you are obviously bound by regulations like HIPPA or FINRA. This means you are responsible to maintain the compliance and keep the data you are collecting from your clients safe and secure. If you somehow fail to do so it can lead to significant costs. And if you don’t take any necessary precautions to meet your regulatory requirements, it can result in damage to your customer relationships and even damages your company’s reputation.
In the worst case scenario, if a hacker gains access to your network which can lead to stealing of sensitive information and even puts your company at risk. When it comes to protecting your data you need to be proactive and vigilant. As with other tasks it has become tougher to manage compliance an outsourced compliance service with capable specialists will manage this function on behalf of your organisation.
Why are companies relying on compliance outsourcing?
- The primary reason for outsourcing is the shortage of talent and skills in this discipline. Bringing external help will blend your teams together and fill the gaps rather than relying on an over-stretched team which may lack skills. This will help companies overcome challenges such as lack of trained in-house staff or deficiencies in current regulatory compliance processes, and infrastructure and operating costs.
- Compliance is not a revenue generating business function. However, it is a core competency in the business process. Due to the rapid changes in the compliance process your organisation can face higher operating costs. However, external compliance services see a wide variety of issues in a variety of situations as they have to work with a variety of clients day to day. Even with rapid and continuous changes they can solve anything, what is to you is a unique issue. Not only that, they are a team of experienced compliance experts so the decision and work they do is collective and strategic.
- It is very important to be familiar with the regulatory environment for businesses. Since good compliance arrangements normally result in improved efficiency and business process. Whilst hiring an employee might make sense when a firm needs to benefit from multiple skill sets but turning to outside experts is beneficial as they have practice answering regulator questions and are well equipped with knowledge that is essential for compliance function.
- This familiarity with regulations will benefit you in two ways. First, it will obviously save you from difficult situations when you are about to deal with someone you don’t know, and second, you have the freedom to breathe freely when you know that skilled, meticulous and knowledgeable team of professionals in handling and presenting your interests.
- To address evolving compliance needs, it is important for organisations to invest in new technologies and infrastructure. Global enterprises face even higher investments. An outsourced solution can help you save a lot of time and also provide you with much quicker access to multiple systems like compliance analytics that you would have to develop separately if you plan to hire in-house. On the top of that you will stay on the top of all the latest regulations and rule changes.
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