Compliance Outsourcing: A Model that Works

For many organisations, finding and retaining experienced compliance staff is becoming increasingly challenging.  The quality of mid to senior level compliance staff varies enormously, and persistent tightening of the regulatory environment, especially for some of the bigger firms in the market, has resulted in a stark shortage of talent.

At AB we believe that Compliance is perfectly suited to an outsourced model, especially at the mid to senior level – however the key challenge is that there is no one-size-fits-all approach. Firms will vary in nature, size, complexity, and also in the staffing arrangements they already have. The AB structure is designed to give a client enough structure to determine what they need, while maintaining the flexibility to complement any existing arrangements. By working together from the outset, we are confident that a great solution can be designed for any client.

Why outsource?

There are almost too many reasons to count – but here are just a few:

1.     Finding the right staff is time consuming, expensive, and risky

You need to run a recruitment campaign, compete with other employers, pay the recruiter. Then there’s cost of seat, training, performance management, superannuation and bonuses. By the time all that is factored in, the cost of a staff member far exceeds their salary. And even when that’s all done, and you’ve finally got someone that’s working out - now you cross your fingers and hope that the tightest ever professional job market doesn’t entice them somewhere else.

2.     Permanent resourcing is not ideal for compliance workflow

While some tasks can be predicted, a lot really can’t. Compliance is rife with issues – ranging from the day to day (approvals, queries, incidents) through to large projects that come out of nowhere. How do you get your staffing level right to cater for that? The answer is that you don’t. Instead you are forced to either resource at a level that is sufficient for the predicable and then immediately falters when unexpected demands emerge, or you factor in the unexpected an end up with idle capacity.

3.     Cultural fit and exposure

This may be a controversial opinion, but in our experience, in the average SME, compliance teams are often small and isolated with values that aren’t always aligned with the broader business. In addition, their experience is limited to a single business which can limit both development and interest. Often, an outsourced compliance manager is a happier compliance manager.

How it works

The AB Outsourcing model breaks compliance workflow down into 3 core categories.

1.     Core Compliance Program

When the regulatory knocks at your door, they will ask to see your compliance program – and at that point it’s good to have one. Fundamentally, this is a core plan and calendar combined with a collection of policies, processes, reporting and scheduled activities (e.g. training and monitoring). If you have one, we’ll make sure it’s adequate, if you don’t we’ll put one together for you. This is the most predictable category – we agree what’s needed up front, and then do it throughout the year – ensuring you can always point to a compliance program that works.

2.     Issues Management

Compliance is full of predictable unpredictability – and issues management is a big part of the job. From business queries, through to approvals, and minor incidents, breaches, complaints, and regulatory contact – you never know exactly which it will be this month, but you know it will be something. AB helps you manage this by providing the ultimate safety net – your staff escalates the issue, we deal with it within 48 hours.

3.     Projects

These are major pieces of work that are tough to plan for. It could be new regulation. It could be a major regulatory breach or dispute. ASIC might audit you. Perhaps you are changing your business on a fundamental level – launching a new product or engaging with a new partner. Unless we know about them from the start, we can’t account for these in our monthly fee, but we certainly can help – and because we already know your business, we’re usually a lot more efficient than other providers.

Flexible levels of support

The optimal level of support varies from client to client. It will depend on the nature, size and complexity of your organisation, its level of regulatory risk, as well as the resources you already have in place. As a result, our support model is flexible – designed to be able to mould around any company, but structured so that you can get exactly what you need.

1.     Advice

This expertise level is equivalent to a senior compliance manager – and is the core level of the service. Our advice offering is perfect for maintaining your framework, managing your issues and running your projects – and just generally making sure your business stays compliant.

2.     Administration

This level includes tasks that are process driven, with a greater need for organisation and people skills than expertise and judgment. While we can’t sit on your desk, we can be the perfect support for anyone who does, and we can even help you train or find them. And if the admin tasks do become overwhelming – we have junior staff of our own who can help.

3.     Management

Maybe you need someone to brief your board, chair your compliance committee or negotiate with a regulator. Our senior staff have experience with all those things and more, and you can lean on us to manage any of your key stakeholders.

What does it cost?

This will depend on the support you need – but a good rule of thumb is that if you invest half to two thirds of what you paid your last compliance professional, you will not be disappointed. One of the real advantages of the service, however, is that it can adapt around what you need and want. Perhaps you are comfortable managing all the regulatory change projects but want support on day-to-day issues. Or maybe you are happy managing issues and just want comfort that your program is functioning and compliant. No matter what your needs are, we can work out a monthly budget that suits you.

What next?

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