Growing fintechs face a familiar problem. Compliance workloads grow faster than headcount, experienced analysts are hard to hire and regulators and banking partners expect mature controls long before the business reaches scale. Outsourcing parts of the compliance function is one of the most effective answers, provided it is done properly.
What regulators expect when you outsource
Across the UK, EU, US and Canada, the principle is the same: you can outsource activities, but you cannot outsource responsibility. Your business must keep oversight, retain the ability to make key decisions and be able to explain how the outsourced work is controlled.
- A clear written agreement with scope, service levels and audit rights
- A named person in your business who oversees the provider
- Regular reporting and quality checks
- An exit plan if the arrangement ends
Functions that outsource well
Queue-based, procedure-driven work is usually the best place to start. These tasks benefit from trained capacity and consistent methods.
- KYC and KYB reviews and document chasing
- Sanctions and PEP screening alert review
- Transaction monitoring alert investigation
- Periodic reviews and remediation projects
- Policy writing, risk assessments and audit preparation
What should stay in-house
Some responsibilities should remain with your own leadership. Your board sets risk appetite. Your MLRO or nominated officer decides whether to file suspicious activity reports. Senior managers approve high-risk relationships. A good provider prepares the analysis behind these decisions without taking them over.
Setting service levels that matter
Agree measurable SLAs before work starts: turnaround times for each queue, quality targets measured through sampling, escalation timeframes and reporting frequency. Review them monthly and adjust as volumes change.
Choosing the right partner
Look for practitioners who have worked inside regulated payment businesses, who will work in your systems so records stay with you, and who are transparent about who does the work. Ask how they handle confidentiality, data access and staff training.
Hilix provides outsourced compliance and AML teams built on these principles. If you want to explore what could be outsourced in your business, book a consultation.