The rationale behind Compliance on demand

Diana Raicu
Connective Payments, December 2022

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Comply or die

You probably don’t need to be convinced of the usefulness of compliance. After all, when you drive a car, you obey the traffic rules, otherwise you risk an accident. Without traffic rules, it would be chaos on the road. Fortunately, the number of traffic rules is limited. Your navigation system keeps you in the right track and points you in the right direction. If only it were that easy in your organisation. Take the financial industry. Highly regulated with a large number of laws, rules and permits, the industry is characterised by a high level of complexity and increasing pressure from regulators, politicians and the media. Failure to comply with these rules, even if unintentionally, can entail major risks of fines or worse, reputational damage.

To help prevent that to happen, you need compliance experts who are aware of the current and future rules that apply to your organisation. Who are proactive, rather than reactive, to keep pace with regulatory changes (1).

Sourcing compliance

Whether you need to employ those compliance specialists on a permanent basis depends on a lot of factors, such as the size and type of organisation, the product portfolio and relevant laws and regulations. In addition, the same questions are raised as with any Business Process Outsourcing (BPO) decision: do we want to maintain direct control over this work? Do we regard this specialist knowledge as a core competence of our organisation or do we think it is better to contract it externally, just like the company canteen, the ERP specialist or the law firm? Do we prefer variable costs over fixed costs? How scarce is this knowledge, expertise and experience available on the labor market?

Compliance on demand is also for larger organisations

SME companies and start-ups often prefer to use temporary staff for specialist functions. Large organisations usually have a separate department with in-house compliance specialists who test new products against relevant regulations. Nevertheless, a 2022 Thomson Reuters survey states that a whopping 36% of global systemically important banks (G-SIBs) said they outsource all or part of their compliance functionality, citing as some of the main reasons the necessity for additional assurance on compliance processes, the costs and lack of in-house compliance skills. They outsourced a spectrum of compliance activities to third parties, including second compliance testing, screening, review and monitoring of email, transaction reporting and compliance training (2).


Outsourcing compliance function - yes or no
Source: Thomson Reuters - Cost of Compliance 2022: Competing priorities

While a permanent staff of in-house compliance employees may be able to assess a constant and predictable flow of product changes, it is probably wise for any organisation to bring in external experts for large and temporary compliance projects. Think, for example, of new product or service launches, screening the entire portfolio for compliance risks or strategic advice on future changes in legislation and regulations. To clear up a possible misunderstanding, outsourcing compliance never means outsourcing your problem. The responsibility remains with the organisation.

Connective Payments Compliance on demand

At Connective Payments, we strive to support our clients in overcoming their compliance challenges. We are able to test your products, policies and operational procedures against the applicable legislation, and provide you with structured advice and support in the implementation of rules and policy. Our focus is to stay abreast of current and future regulatory requirements.

We support clients with license applications from De Nederlandsche Bank (‘DNB’) and the Netherlands Authority for the Financial Markets (‘AFM’). This support includes reviewing the current processes and procedures, the business plan and working with the client in the licensing process to have all necessary documentation available.

Our compliance on demand service is valuable because we have deep expertise in the payment industry, the right network of professionals needed in the process, as well as our commitment to adding value to our customers. We believe we can support payment organisations in overcoming their compliance challenges with the mentioned benefits of outsourcing.


  1. To give a sense of the costs of compliance in numbers, LexisNexis states that the global cost of compliance in 2020 was $213.9 billion, with 58% of the costs being on labour. An approximate of 6-10% of revenue is reportedly spent on compliance annually. However, the cost of non-compliance is double that of compliance, based on factors such as fines, lost productivity, business interruption and lost revenue. On top of that, a significant cost of non-compliance is reputation, as it can have extremely damaging effects on an organisation.
  2. The “Cost of Compliance 2022: Competing priorities” survey by Thompson Reuters generates responses from almost 500 practitioners worldwide, representing global systemically important banks (G-SIBs), banks, insurers, asset and wealth managers, regulators, broker-dealers and payment services providers.
Picture of Diana Raicu

Diana Raicu

Connective Payments
Compliance consultant
+31 682584996

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