It is common for organizations and federations to outsource top-level management functions like auditors, IT Heads, chief financial officers, general counsels, and even COOs and CEOs.
Hence, it has also been determined that outsourcing the Chief Compliance Officer (CCO) for various large and small scale structures is highly cost-effective and promotes efficiency.
It is difficult to hire an experienced professional who holds a degree in government agencies and has the credibility in constituting an operative program, so it is highly recommended to outsource one.
Moreover, organizations must invest a lot of resources, time, cost, and expertise to design and implement a compliance program – and many cannot afford to fund an in-house chief compliance officer role.
For these reasons, seeking the compliance services offered by an outsourced CCO can dramatically improve internal workflow and assist the organizations in various regulatory tasks.
The Major Benefits Of Outsourcing The Duties Of A Chief Compliance Officer
Outsourcing the services of a CCO instead of hiring one is considered a viable option because of the following benefits:
1. Have Extensive Experience With Regulators
The CCO typically administers a compliance environment designed to avert, identify, and report violations of various laws. But the role also demands a deep knowledge of local regulations.
Outsourced CCOs are professionals and experts in dealing with regulators.
They have the apt experience of answering regulator questions and are well aware of the regulatory environment, policies, solutions, and staff in your area.
It becomes a relaxation for firms to know that an experienced, knowledgeable, and meticulous expert is representing your interests and saving you from a difficult situation.
2. Implements Quick Reactions To Regulatory Changes
Another major advantage is the speed in which CCOs are accustomed to working. They can collect pertinent compliance data from the organization’s internal and external systems and stakeholders.
They are used to dealing with common and rare regulatory issues, so they have enabled themselves to follow clear procedures and quickly implement them in a variety of situations.
When the business in itself has not been established, and the compliance program is not in place, it is better to outsource the services of a CCO.
This rich experience is an invaluable resource for firms who don’t have to undergo the pressure of handling a variety of regulatory changes.
This way, organizations can concentrate better on their staffing models, operations, and management and swiftly implement the compliance process suggested by the outsourced CCO.
3. They Are A Different Set Of Eyes With An Unbiased Approach
Another benefit of outside compliance is the opportunity to have a third person looking over your operations.
Aside from creating documentation, outsourced CCOs conduct risk assessments, manage internal audits, and offer ongoing compliance consulting and support for a company with regulatory struggles.
As far as compliance issues within the organization are concerned, it is imperative to outsource it to unbiased professionals to work on underlying problems with rigidity and provide beneficial resolutions.
It is natural for an in-house leader or officer to overlook or ignore problems because you’re so familiar with your operations. Thus, potential issues get snubbed or flouted.
An outsourced chief compliance officer will have an unprejudiced overview to objectively review policies and procedures and find loopholes within the system.
4. A Diverse Range Of Experts Equals Greater Expertise
Outsourcing CCOs are a pool of focused and dedicated talent with untapped knowledge and an abundance of compliance resources which is realistically not available in-house.
This wealth of compliance expertise allows CCOs to assist with personalized compliance needs and address issues about overseas operations.
When businesses deal with local and international regulations and directives, it means they need an expert who understands the regulatory terminology of multiple countries and is updated with legal challenges.
Thus, the analysis offered by more than one outsourced chief compliance officer is of paramount importance when dealing with global legalities.
5. Reduced Costs
Being a Chief Compliance Office requires operational experience, legal knowledge, process management expertise, business acumen, and the right education and experience.
It is difficult to find an expert in all the above within a pre-defined budget for organizations, so outsourcing a CCO comes in handy.
There are training and attrition costs involved in an organization. Outsourcing a chief compliance officer eliminates the fixed cost and a commitment to maintaining the expert.
Moreover, outsourcing is more cost-effective than hiring in-house talent, especially for new organizations with low budgets.
6. Streamlined Access And Useful Technological Resources
Encrypted Technology, the backbone of compliance, and additional requirements may prove to be a heft cost for any firm. Organizations can outsource the services of compliance to eliminate such costs.
Outsourced CCOs have access to significant resources like deficiency letters, trends, etc., which assists organizations in managing a proactive compliance program.
These professionals are also equipped with the latest technological updates and use their equipment and applications to work on your organization’s compliance.
7. Laser Focus On Industry And Compliance
Compliance is a non-revenue generating function that requires an array of resources to be invested in management, training, and investment.
This could deviate these firms from investing in the right places which generate revenue. Therefore, it is best to outsource compliance to a professional CCO in such cases.
The entire business model of an outsourced CCO is compliance and improving your firm’s program.
They will direct their expertise exclusively toward offering compliance education, drafting and updating compliance policies and manuals, and filing notice filings.
With such a specialized focus, outsourced professionals aim to exceed expectations.
By utilizing outsourced compliance officers, organizations can ensure focused outcomes by concentrating on key trends and focus areas to reduce overall compliance risk.
Any kind of misconduct or irregularities occurring in the area of compliance within an organization can expose it to corporate criminal and civil liability, as well as suspension and debarment from all legal laws.
Clearly, all organizations, regardless of their size, must conduct themselves with the highest degree of honesty, integrity, and compliance.
Companies can accomplish these goals by outsourcing the expertise to professional chief compliance officers who have an excellent purview of the code of business ethics and conduct.