The use of compliance consultants by financial firms has been growing at unprecedented rates, and for good reason. According to The Harvard Business Review, firms continuously “struggle to understand and meet their legal and ethical obligations,” because a successful compliance program undoubtedly “requires some creativity, some testing, and careful model design to appropriately measure outcomes.” Many firms have limited resources and turn to compliance consultants for their broad expertise, advice and program implementation experience. To achieve success, there are a number of best practices firms can follow when working with outside consultants, including establishing expectations, setting goals, and taking advantage of RegTech.
Tip #1: Establish clear expectations
In most firms, organizational structures are designed to manage onboarding, supervision, and performance management. Throughout these processes, breadth of knowledge is often lost as business as usual gets in the way.
An independent compliance consultant can provide a vital helicopter view of gaps within your firm. However, consultants may be unwelcome by team members who are busy or even wonder whether their roles are becoming redundant. Bringing in a consultant requires open communication and transparency about expectations across the organization.
This means deciding on the scope and purpose of the consultant’s role before they are brought in. It is important consider whether the consultant is being brought in to provide a complete program or to provide insight, effect change, and/or mitigate risks. Once the scope is fully defined, internal resources and responsibilities can be structured accordingly.
Tip #2: Set measurable goals
After expectations around the working relationship are established, you should define measurable goals and projects. This may include:
- Building a successful compliance program and policies for new regulatory requirements
- Deployment of corporate governance, systems, and controls
- Development of competitive analysis and recommendations for change
- Onboarding and training teams
- Ongoing support and counsel
Regardless of the task, it’s best to understand how your consultant will work with existing teams. The most success comes when consultants are integrated into local supervisory structures and achievable goals are clear. In these instances, we have seen a greater sense of team spirit and accountability, which ultimately leads to increased efficiencies.
Tip #3: Use RegTech to Maximize Impact
Sometimes, the best solutions require a combination of technology coupled with human oversight. This is especially true for compliance programs, which require careful design, implementation, and analysis. Sometimes administrative burdens and manual tasks can distract from strategic compliance projects. Knowing how to leverage technology alongside the expertise of a compliance consultant can take your compliance program to the next level.
To get the most value out of compliance consultants, many firms use regulatory technology alongside consultancy expertise. In these cases, RegTech automates the time-consuming, manual tasks, while the consultant implements best practices and provides strategic insights around program success or gaps.
Additionally, Compliance Program Management platforms can establish visibility into the projects a consultant is working on, ensuring all expectations and responsibilities are met. Cloud-based technology solutions provide a single source for both the firm and their consultant to monitor and record communications and projects. This is especially important during examinations or internal compliance reviews.
As your firm thinks about its compliance strategy, the decision to hire a compliance consultant to extend the impact of your compliance program is an important consideration. With the right approach and tools in place, you can effectively mitigate risks and protect your firm’s reputation.