The Compliance Skills Crisis – Is Outsourcing an Answer?

16th May 2018 1882 - Blog Posts

The Compliance Skills Crisis – Is Outsourcing an Answer?

A recent article in the Financial Times highlights how regulatory compliance has become a critical issue lately. The article describes the compliance officer as ‘the most in-demand worker in asset management’. How can compliance outsourcing help?

It goes on to explain that the recent influx of regulatory changes has made specialists with technical and legal expertise a prized asset in the industry. The ongoing introduction of new regulation such as MiFID II and PRIIPs means that firms are reliant on compliance expertise in a way that they never have been before this has led to concern that there are not enough compliance experts within the industry leading to demand is far outstripping supply.

It cites PwC’s annual survey of chief executives in the asset and wealth management industries, published in March, which showed that 83 per cent were concerned about the threat of over-regulation and 69 per cent concerned about availability of key skills.

According to the article, companies scrabble for compliance talent. It highlights data from LinkedIn, which shows six times the rise in compliance job ads in Luxembourg than in London, this illustrates that the issue is even bigger in Europe.

Compliance technology can have a big impact on the ease with which regulatory change can be handled. RegTech such as software-as-a -service packages, data management, analytics and artificial intelligence are transforming the regulatory sphere and automating a number of onboarding and compliance tasks.

While RegTech can potentially help to ease the regulatory burden faced by firms, on its own it doesn’t address the skills shortage addressed in the FT article. Many firms are turning to outsourcing compliance, using the expertise, knowledge and technology of firms such a Lawson Conner to address the ever-growing burden of increasingly challenging regulatory change.

Outsourcing compliance can save time on processing, as well as saving cost by freeing up key members of your team to concentrate on the core, profit generating parts of your business. It also harnesses skills and experience that might not exist in-house, and as is evidenced by the FT article, is difficult to source elsewhere.

Key man risk is becoming increasingly common in the compliance management space, typically arising when a company becomes heavily reliant on a single person or a few experienced individuals. The article points out that the demand for compliance professionals has become so great that individuals from other industries are switching to compliance. While this might swell the available pool of skills, it doesn’t necessarily provide the specialist, top-level compliance experience that is available through outsourcing.

Outsourcing all, or some, of your compliance function also provides an opportunity to scale up when necessary – if your firm’s demands suddenly grow, a compliance partner can provide an additional level of support without the need to laboriously hunt for extra staff to bolster an in-house function.

Our experience has shown that the best approach to tackling the ever-growing regulatory burden and compliance skills shortage is to combine outsourcing some of the compliance function with the latest technology, gaining access to high demand skills and expertise.

At Lawson Conner, we have extensive experience at providing compliance for well-established firms based all over the world.  Our services combine unparalleled knowledge and state of the art technology platform. Our software platform makes the onboarding and continuous monitoring process particularly efficient and offers transparency to all stakeholders.

Talk to us to today about how you can reduce your regulatory risk and access top-level compliance talent and expertise.