Is it practical to outsource compliance?
Surviving the changing landscape of business in these unprecedented times requires companies to take a close look at cost control, efficiency, and profitability. To focus on the core competencies of the business, companies need to outsource the low-end functions that take up most of their time. When a section of the business is taken care of by an outsourced partner, it becomes easier to focus on the main business.
Most servicers face trouble balancing compliance with customer experience, along with growing needs for driving profitability. The perfect combination of skilled resources and automation is the need of the hour. Creating a fully-equipped compliance management system requires digitization and automation. The basic requirement for ensuring compliance services is to follow procedures with minimum human interference to optimize accuracy and guarantee efficiency.
Outsourcing compliance not only reduces cost and effort, but it also helps in reducing the pressure on the team. With growing complexities in risk and compliance management, revising has become a continuous learning process. One needs to stay updated with ever-changing and elaborate compliance regulations.
The changes that occurred in the industry during the pandemic have already introduced more than 600 new COVID-19 compliances.
According to the report, nearly 24 percent of firms outsource compliance functions, partially or completely. This fills in for the dearth of in-house compliance expertise. Most of them expect progress in their in-house compliance teams.
Top 5 Compliance Challenges
Over 750 risk and compliance practitioners world-wide, filled a survey that indicates the following challenges faced presently:
- Keeping up with regulatory change
- Budget and resource allocation
- Data protection issues
- Embedding regulatory changes
- Instilling a culture of compliance
Why Outsource Compliance?
- Regulatory changes vigilance
With on-going regulatory changes, it becomes difficult to keep an organization updated with the modifications. The process requires maintaining a database with the latest updates daily with alterations in compliance activities as and when released by Freddie, Fannie, CFPB, VA, USDA, SCRA, and MERS. The task is not only tedious but also requires dedicated resources to continuously feed the database with the latest regulations.
- Manage budget and resource constraint
Maintaining a database for compliance regulations requires building a team to keep up with compliance activities as and when released by Freddie, Fannie, and the likes. Cost is one of the factors to be taken into consideration where the organization can save more than 40% -60% of its expenses.
- Data privacy and security support
Data privacy and security is a major concern that must be looked after uniformly to avoid any leakage of consumer information. Training the resources for fraud and risk assessment along with compliance matters is an integral part of data protection. It is a very common practice by most companies to store compliance data in spreadsheets rather than a proper database. To stay on top of ever-changing and increasing regulatory requirements, it is only safe to avail of the benefits of cloud-based software.
- Automate tasks
To ensure that servicers do not fall behind new regulations, automation tools come of great help. Using automated software can also help create audit questions from regulatory compliance which makes the task easier. Template-based automation software reduces processing time dramatically by eliminating the human element.
- Addressing compliance as a core practice
It is extremely important to protect, restore, and maximize value for clients in the mortgage industry. There are incidents where mishaps occur despite significant investment and measures. Most of the time, wrong values and cultures are the primary reason for such incidents. To drive proper culture across the organization, it is necessary to ensure accountability for compliance matters and inculcate compliance as a core practice.
To talk more about compliance challenges and how our cloud-based application can help your business, please contact us for a free demo of Audit, Risk and Compliance Software “ARC”.