While working as in-house compliance officers we often tried to engage outside consultants to solve complex issues. However, in the course of communication, it sometimes feels like they are from another planet and give you recommendations like you have unlimited budgets and resources for compliance. As we know this is always NOT TRUE.
As a compliance officer, you have the critical task of ensuring that your company is meeting all the necessary regulations and industry standards. Working in fintech compliance is challenging since you have to wear many hats. The modern compliance officer is a good product manager, process owner, business analyst, marketer, financial analyst, and many other roles. So it is fine to engage external help from time to time so you may lack specific knowledge or perspective. And this is okay!
However, as your business grows and compliance requirements become more complex, it can be challenging to keep up with everything. Engaging a compliance vendor or consultant can help you mitigate risks, save time, and ensure that your business is compliant with all regulations and meets customer needs at the same time. Here are some key things to consider when deciding when to engage a compliance consultant:
- The Size and Complexity of Your Business and Product
If you are just starting it might be useful to engage a consultant with a narrow specialization relevant to your company. You can ask them to build an efficient customer onboarding flow, design customer screening controls, and build risk-scoring rules. It is important to define the key controls at the beginning and make them scalable and adjustable. As your customer base will grow, inefficient controls will generate an excessive number of false positives and will require more manual involvement. Make sure the customer scoring rules are not hard-coded, but can be customized as your customer base will change and grow over the time and some initial rules may become irrelevant. It is a good practice to review the key controls in the annual basis or even more often. If you see that some rules are not working, do not be afraid to remove or change them if they don’t bring any value.
- Specific Regulations and Compliance Requirements
You need to consider the specific regulations and compliance requirements that apply to your company. When this may sound self-evident, it is not really not. We have faced numerous times when the in-house compliance officers were pushing for the additional resources from the IT side to implement the suspicious activity reporting flow. That was a hot period when the company was just launching its product and IT resources were critically needed to improve the customer experience with the product. Compliance pushed its demands and reporting flow was implemented while the product launch was delayed. After some time it appeared that this company doesn’t need this type of reporting flow. It may have used the existing governmental resource for reporting the suspicious transactions. Obviously, semi-manual reporting process is not sustainable in a long-run, but when the company is just staring and doesn’t have customers (not even talking about suspicious ones) it is important not to overcommit in the controls that are just “nice to have”. Ensure the consultant you are engaging has relevant knowledge of the regulatory requirements in the country where you operate and not excessively risk-averse and conservative.
- Reputation and Track Record of the Consultant
When the first that comes to mind after hearing “reputable and experienced consultant” is somebody from BIG4, it is not always true. Yes, BIG4 are good, but not always required. While they are good to engage in complex regulatory projects, they are definitely not the ones who designs your customer flow. We believe that it is crucial to work with a reputable and experienced consultant who understands your business and your product. We suggest you to interview the consultant before engaging into the partnership. Ask them about some specific case studies related to their exiting customer base. How did they improve the customer flow, risk scoring rules, what value brought to the their customer? Ask them to be specific. The consultant should be a tech-savvy and able to explain complex things is a simple manner, their conclusions and suggestions must have an applied value. This step will help you ensure that you are working with someone who has the knowledge and experience necessary to help you achieve compliance success.
In conclusion, engaging a compliance consultant can bring significant benefits to your business. Consider the approach the consultant is choosing and be aware of the consultants who primarily underline risks and tend to prepare long lists with the potential risks and don’t bring any applied value.
If the outlined issues are resonating with you or you are considering engaging an external help, drop us a message using the contact form below or write to advisory@complianceaspect.com and we will be able to arrange a discussion with our experts.
