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Local compliance in a global business


Financial Institutions (FI) follow different solutions to fulfil compliance requirements. We can divide this into following different models:
1. Option 1 : in-house, in-country
This option is will help FI to keep all the compliance functions in-house.
• It works great when FI has significant presence in the country
• Helps to build good local compliance knowledge which works good for business on long term
• People issues – limited career progression
• Risk of losing knowledge when key individuals leave
• Difficult to maintain when majority of the roles are outsourced

2. Option 2 : local outsourcing
Here operations are distributed in each country and each region will look for local solution for compliance solution locally
• Low cost outsourcing solution
• Decreases dependency on in-house experts
• Assist continuity
• No central coordination
• Multiple point of contacts - contracts/support agreements to manage
• Low central visibility
• No escalation matrix except locally to vendor
• High risk as 100% dependency on vendor

3. Option 3 : Centralised Outsourcing, centralised delivery
Here operations are centrally managed with this presumption that centralised team have will have knowledge of the local regulations
• Cost effective for large countries
• Low cost once system is installed
• Hard to find suitable people for smaller countries and who are willing to relocate
• Risk of not keeping up to date with changes in local regulation

4. Option 4 : Centralised Outsourcing, local delivery
This model is best among all the options and allowed central control and visibility. Here service in each country are delivered by local team who knows local regulations and operations are centrally managed
• Local service delivery and local presence
• Global visibility for local compliance issues when it is needed
• Central coordination, allowing reduced demands on management time
• Defined escalation path and well established service level arrangements
• A single contract gives flexibility and scalability
• Few firms offer full service combined with global cover 


Disclosure: I wrote this article myself and it express my own opinion


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Amit Agrawal

Amit Agrawal


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13 Mar 2010



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