Compliance Outsourcing Services in Switzerland
Introduction of FINIG, FIDLEG, and Related Regulations
In 2020, the FINIG, FIDLEG, and related regulations such as FINIV, AOV, and FIDLEV were introduced. These changes significantly increased the requirements for licensing, supervision, organization, and internal control of financial institutions.
Increased Regulatory Compliance Requirements
Independent asset managers and trustees are now classified as financial institutions and require a license. They are also subject to financial market supervision, necessitating appropriate corporate governance rules and a structure that ensures compliance with legal obligations.
Compliance and Risk Management
Asset managers and trustees must have robust risk management and effective internal controls to ensure adherence to regulations.
The Anti-Money Laundering Act (AMLA) requires financial intermediaries to ensure sufficient training for their staff and conduct controls.
Compliance Outsourcing
Authorities often require a functional separation between supervised business activities and compliance and risk management. Separating and outsourcing the compliance function can meet this requirement efficiently.
Efficiency for Small and Medium-Sized Asset Managers
Small and medium-sized asset managers often lack the necessary expertise and personnel resources. Staff turnover of employed compliance officers results in a significant loss of know-how. For these firms, outsourcing AMLA compliance tasks to an external expert is the most efficient solution (Compliance Outsourcing Services).
Professionalism and Cost-Efficiency
Outsourcing to an external compliance officer can provide the necessary expertise and resources while also being cost-effective. Compliance outsourcing services offer a high level of professionalism and efficiency, making it a practical solution for small and medium-sized asset managers.er eliminates unnecessary training costs for internal staff. External compliance officers provide tailored support that is both cost-effective and highly professional.
Service-Oriented Approach
By outsourcing, asset managers purchase a service, relieving them from the need to manage their own internal teams. No need to take care of recruitment, interviews, illness, etc. of compliance officers anymore.
Consultation and Process Optimization
External compliance officers offer comprehensive advice on AMLA obligations and assist in optimizing internal processes. They can also handle tasks such as drafting directives and contracts. Last but not least they can provide basic data protection coverage.
Focus on Core Business - not on regulatory requirements
An external compliance officer ensures adherence to all legal and internal regulations. Allowing financial service providers to focus their resources on their core business. This allows them to serve clients without burdening themselves with administrative tasks.
Risk Management Outsourcing
Asset managers must comply with stringent legal requirements, making effective risk management indispensable. This involves identifying, assessing, and controlling risks arising from market movements, processes, and legal changes. The complexity and scope of these tasks make risk management a critical component of any company’s strategy.
How Risk Management Outsourcing Works
In risk management outsourcing, the asset manager works closely with a professional who develops tailored solutions. The process typically includes:
- RISK ANALYZING:
Comprehensive assessment of current risks, including market, credit, liquidity, and operational risks. - STRATEGY AND GOALS:
Development of a risk management strategy aligned with the asset manager’s specific requirements and objectives. - IMPLEMENTATION:
Introduction of necessary processes, systems, and controls to manage identified risks effectively. - MONITORING AND REPORTING:
Continuous monitoring of risks and regular reporting to the asset manager to ensure transparency and control. - ADJUSTMENT AND OPTIMIZATION:
Ongoing adjustment and optimization of processes based on changing market conditions and legal requirements.
Benefits of Risk Management Outsourcing
- ACCESS TO EXPERTISE:
Asset managers can meet stringent legal requirements and ensure effective risk management. - COST SAVINGS:
Hiring and training internal staff can be costly and time-consuming.
External providers offer efficient, tailored solutions. - FLEXIBILITY:
External risk management services can easily adapt to changing business volumes — ideal for growing asset managers. - COMPLIANCE:
A stringent compliance framework reduces the risk of penalties and legal consequences due to compliance violations. - REPORTING:
Regular collection, analysis, and reporting of risk data provide insights into current exposures.
Clear reporting supports informed decisions and strategy development while ensuring legal compliance.
Case Study: Ultimate Beneficial Owner (UBO) Identification
The financial industry faces growing challenges because of complex legal requirements and stricter controls. A crucial aspect is the clear identification and verification of UBOs.
Importance of UBO Identification
Identifying the UBO is a legal obligation. Failure to clarify UBO status can lead to significant legal and financial consequences. Therefore, clear and effective processes for determining UBOs are essential.
- THOROUGH CUSTOMER REVIEWS:
Conduct comprehensive reviews to identify and confirm the UBO. - TECHNOLOGICAL SUPPORT:
Use advanced technologies for transaction monitoring.
Modern software supports large-scale data analysis.
AI and machine learning can automatically identify patterns and anomalies — improving efficiency and accuracy while reducing human error. - REGULAR TRAINING:
Regularly train staff on the latest compliance requirements.
Conclusion on Compliance Outsoursing Services
Compliance and risk management outsourcing offer significant advantages for asset managers. Outsourcing partners meet legal requirements while optimizing processes.
By outsourcing, asset managers purchase a solution and avoid the need to manage internal compliance personnel.
External experts specialize in legal compliance, allowing asset managers to focus on their core business. This results in better customer care and more efficient business operations.
Overall, outsourcing provides a professional and efficient solution, enabling asset managers to concentrate on their core business and clients.
