The list of regulatory requirements for financial institutions ( FIs ) continues to lengthen as a reflection of increasing cyberthreats , the sector ’ s rapid expansion and other key variables . Adding to the list is anti-money laundering ( AML ), as measures to safeguard this cornerstone of modern-day compliance are quickly becoming more robust .

This has encouraged some market players to consider – or fully move to – outsourcing compliance experts to stay up to date with new standards and ensure timely regulatory policy changes . While contracting out certain functions may turn out to be beneficial , there are several dangers that need to be considered as well .

During the pandemic , there was a significant jump in risk and compliance outsourcing , as the financial sector underwent major changes to accommodate new market habits with high expectations to maintain operational resilience . As continued interest remains , Thibaud Catry , Chief Compliance Officer at ConnectPay , noted ensuring compliance partner compatibility and synergy between inhouse and outside experts as key challenges to consider when hiring external help .

“ Compliance is tightly knit with a company ’ s key processes ; thus , every outsourcing partner must be carefully assessed , because if they are not up to the task – the company still bears the regulatory liability ,” said Catry . company ’ s initiatives and , in worst cases , completely jeopardise its strategy .”

While for some it might be seen as a cost-saving solution in regard to required personnel and necessary training , the reality is far from it . According to Catry , companies usually come back on their decision to outsource within two years or less . Thus , in the end , businesses might spend even more going back and forth than they would have if they had focused on building an in-house team from the start .

Keeping matters internal gives additional reassurance for customers as well , making sure their assets are secure and not subject to third-party liability . According to Catry , this , among several other reasons , has led to ConnectPay deciding to keep compliance in the hands of in-house experts .

“ Retaining focus on attracting talents and constantly investing in them , rather than outsourcing , can help build a very strong advantage , keeping in mind the market competitiveness for such specialists ,” he said . “ Furthermore , we put compliance at the heart of our strategy as well as involve its functions in all our business decisions , and the best way to do it is to have our compliance teams in-house .”

Ian McAlister , General Manager , CRS Technologies

In some limited scenarios , it might be beneficial to contract out more operational tasks , e . g . recordkeeping or data entry . Also , in some markets , where the resources are scarce , external help can bridge the gap to accessing relevant knowledge to ensure business continuity . However , in the end , the decision must be calculated and the outsourcing partner – extensively researched , especially for the up-and-comers .

“ Also , the team needs to be in constant sync with external experts so it can efficiently deliver , adapt and support the business . Having even the slightest disconnect can drastically slow down the

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