Firms supervised by the Financial Conduct Authority ('FCA') should maintain policy and procedure on “material outsourcing” which align to SYSC requirements in the FCA Handbook.
A firm cannot contract out its regulatory obligations. The firm's senior management should therefore, take reasonable care to supervise the discharge of material outsourced activity.
We assist client assessment of outsource risk management on financial crime and conduct independent testing/assurance on service delivery.
A firm cannot assume because a service provider is regulated or where an intra-group entity provides outsourced services, that will, in itself, imply a reduction in operational risk.
The FCA expects outsource arrangements to fit with a firm's organisation and reporting structure; business strategy; overall risk profile; and ability to meet UK regulatory obligations.
We assist clients to ensure compliance with FCA expectations on outsourcing, for financial crime, anti-money laundering, bribery prevention, financial sanctions and fraud.
Outsourcing may help reduce operating costs, but should not lead to increased regulatory or key stakeholder concerns, about a firm's ability to manage financial crime risk.
Stakeholder confidence may be impacted if appropriate due diligence is not performed on a service provider's capability to deliver and maintain effective risk-based outsource services.
We provide due diligence advisory and review services, to inform content of Service Level Agreements and outsourcer oversight for compliance with UK regulatory requirements.
FCRM assists clients to ensure outsourcing of ‘important’ operational functions is not undertaken in such a way, as to, impair:
- the quality of internal control; or
- compliance with regulatory requirements.
We provide independence, objectivity and experience when assessing outsource risk.