Outsourcing Compliances Process – Is It Beneficial?

Blog   wpadmin   March 9, 2021

Executive Summary:

      • Outsourcing of Compliance Process – Engagement of external consultants or firms to assist the organization in identification and complying with regulatory and legal requirements, standards, specifications, internal policies required to conduct business and to protect it from legal risk.
      • Supporting compliance process through use of technology; providing support of subject matter expertise; providing people with desired competence; access to global compliance needs and requirements; tracking and updating on changing compliance requirements; and most importantly reduction in overall cost of managing the compliances.


Outsourcing can be referred to make an arrangement where an external organization (company or individual) performs part of an organization’s function or process. Compliance in general terms means fulfilment of a requirement to rules, procedures, guidelines, specifications, standards, customs or norms imposed externally or framed internally for smooth functioning and maintaining integrity of the system be it a business or any association. Put together, outsourcing compliance can be termed as hiring services of external consultants or firms responsible to assist the organization in complying with all legal and regulatory requirements, standards, specifications as well as internal policies and by-laws required to conduct business and to protect it from fines and lawsuits. Some of the commonly outsourced tasks are HR functions, IT related services, regulatory compliances, financial services and health care.

Is Outsourcing of Compliances Beneficial?

From a business perspective, compliance can be termed as fulfilment of a requirement. Compliances can be for both external and internal requirements. Under external compliances, an organization adheres to laws, standards laid down by an external body – Regulator or Government Authorities; and under internal compliances an organization complies with its own set of policies, rules designed to maintain the quality of its services or products or abide with external rules set by various Authorities.

On incorporation of any business, complying with numerous and complex set of laws or standards or good governance and ethics principles becomes a daily and tougher task and hiring external consultants or service providers can ease the burden of managers through easier and simpler processes adopted by firms specialized in performing such tasks. Compliance services and solution market has evolved in response to such demand and have also designed tools, software to facilitate the process. Moreover, its saves organization’s time and money as they need not invest in employing experienced resources to handle such work. The service providers have larger teams specialized in various aspects of handling compliances may it be legal, statutory, industry standards, tracking changes in laws and related procedures, technology capable to manage, monitoring, analysis, resolving issues and maintaining data.

Instead of investing in employing a fully dedicated team, training them in handling compliance tasks it becomes profitable for organizations to outsource such tasks to firms specialized in handling them and such arrangement offers more advantages to businesses spread over multiple locations as such firms can get all the compliance work for all the locations done through a single firm, then employ resources at each location, and the same can be monitored easily, through deployment of tools and software, from the corporate office. Hence companies can also get access to more modern systems, technology, knowhow and subject matter expertise. This arrangement also helps companies cope with talent shortages, matching up with global compliance needs, changing compliance requirements and reduce costs.


Although outsourcing compliances is a viable solution for most businesses, yet its benefits have to be assessed against the negative effects such as data security or processes adopted by service provider. Organizations should assess what part of compliances can be outsourced and should consider outsourcing those compliances that actually do not require in depth understanding of the organization’s business strategies, plans or exchanging any confidential information related to business.

Legal Team

Proind Business Solutions Private Limited
306, Tower B, I-thum, Plot No A-40, Sector 62, Noida, UP, India- 201301
No.: +91 120 4224203
Email: info@proind.in, website: www.proind.in

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