COMPLIANCE WEEK: The Risks of Outsourcing Compliance
by Joe Mont, Compliance Week, January/February 2019
Using external firms and consultants can bolster the effectiveness of certain compliance functions. Abdicating too much responsibility, however, could draw the ire of regulators. Joe Mont has more.
There is no denying that third-party relationships require careful and ongoing compliance reviews. But what if your compliance functions — up to and including the CCO — are themselves outsourced?
The answer depends on what specific compliance initiatives are shuffled off to an outside vendor, why, and whether doing so affects a firm’s risk weighting and tolerance.
Does outsourcing compliance make your company better? Or does it run contrary to best practices and open new risks? Those are the questions regulators are asking.