Outsourcing compliance - 01/25/02 07:45 PM
Our bank is investigating this option.
Thanks
Our bank is investigating this option.
Thanks
To be effective, the regulatory compliance manager must be involved at the earliest stage of product development. By designing compliance into the product, you reduce the chances of violations later. Quality control measures should also be designed into products. Responsibility for QC should rest with the business unit that's selling the product, not an unrelated staff support unit (the compliance officer.)
Outsourcers can audit effectively, but are rarely brought into early discussions & planning sessions. Without guidance at this critical stage, you allow development of products that are much more likely to suffer from regulatory flaws.
For my money, I'd invest in a good lock for the barn door, rather than cowboys to keep chasing the horses down and bringing them back.
Trainning is an on going and important part of compliance, but no guarantee compliance is being adhered too. Of equal importance is the monitoring of CRA and HMDA activity.
You need to know what the bank looks like before the regulators do, and far enough in advance, so that if any trends need to be changed there is time to do it before they arrive for an exam.
Unless a bank chooses to makes an expensive investment in products and personnel, outsourcing is a more efficient and less costly way of monitoring, and the time it takes to do this in house can then be put to more productive use.
Take a look at what it would cost to equip and train, and keep trained, a staff that can provide the services an outsource company can.