How Compliance as a Service (CaaS) Could Unburden Your Financial Service Organization

By Corey Shields | April 6, 2021
Corey is the Digital Marketing Manager at Ntiva, and brings with him over a decade of working in the information technology and services industry.

Compliance as a Service (CaaS) packages up the steps that a business needs to take to comply with the regulations specific to its industry.

For a financial service provider it’s designed to help your company keep regulatory organizations happy, your customers happy, and cybercriminals grumpy. It does this by helping you to manage the ever-growing list of regulations that every financial service provider must meet. 


Consumer Protection

It can’t have escaped your attention that in the financial sector, compliance requirements are set by statutory bodies that set out minimum security standards to protect customers and institutions from fraud, theft, data breaches, and so on. 

While it’s crucial to keep money and sensitive information safe, the ever-growing number of regulatory requirements that address data security, risk management, transparency, and ethical business practices are becoming overwhelming. The need for compliance with them has added many extra layers (or “headaches” to use the technical term) to your operations that are here to stay. 



You can thank the Internet for the new problems that you’re dealing with. Your customers now expect to do all their trading, investing, insuring, and banking via the Internet using phones, tablets, and PCs, and you can’t afford not to give them what they want! But moving money and sensitive information around the world in milliseconds also gives hackers and fraudsters more opportunities to steal both, which is why the FTC, SEC, FINRA, and other bodies issue their steady streams of compliance standards.



To manage that workload, you could try a Compliance as a Service solution. This is a managed service that outsources some or all  of the compliance function and frees your teams to concentrate on your core operations. 

You can roughly divide Compliance as a Service into a technology-based component which covers the information-handling part, and a human component, which is the outsourced role or roles that give you the expert strategic and operational guidance to keep your compliance efforts on track.  

Every financial services company is different, so it’s best to discuss your particular circumstances with a Compliance as a Service provider. That way they’ll be able to assess your processes and provide a tailored offering to meet your specific needs (and signpost you towards any services that you’ll need but which they don’t provide).


Why Do You Need a Compliance as a Service Program?

Your financial service organization might not be big enough to justify having its own compliance department, or it might not have the in-house expertise or resources to manage compliance requirements. 

Doing it yourself is a big investment because you’ll need to employ and train staff to audit and manage compliance issues on an ongoing basis. Outsourcing regulatory compliance tasks can free up company resources and boost efficiency.


Human Roles

Here are some of the functions that a compliance services provider can offer you.

  • Outsourced Chief Compliance Officer services
  • Outsourced compliance support
  • Outsourced internal audit services
  • Management of corporate governance 
  • Risk-based auditing and monitoring
  • Vendor management and due diligence
  • Anti-money laundering program review
  • Mock exams and audit preparation
  • Corporate compliance training sessions and workshops
  • Annual compliance audits
  • Drafting, testing, and monitoring corporate conduct against policies and procedures
  • Gap analyses and risk assessments
  • Internal and external investigations

Compliance Through Technology

CaaS List

The Cloud

Cloud services and related technologies can help you maintain compliance because they’re so good at providing security and storage for huge amounts of data. It’s typically much more secure than other forms of storage and offers clear audit opportunities because you can use artificial intelligence technology to look for the devils in all those details – the patterns that can point to suspicious or otherwise non-compliant activity. 

Having all that data on hand can also make reporting more straightforward too, and some Compliance as a Service providers offer the tools to do that. 


FINRA, for example, has stipulated that sensitive data needs to be stored with at least 256-bit encryption, which turns it into gobbledygook that can only be read again when someone has the right decryption key. That means that even if transaction data is intercepted while it’s whizzing through a network it’s unreadable. 

While the software that can do this is often free, the catch is that the process of data encryption, verification, and decryption takes extra time and processing “muscle”. So, to speed it up, financial service providers are having to upgrade and expand their current IT infrastructures or else move to new systems (including Cloud-based services) that offer greater flexibility, scalability and the robustness to encrypt more data more quickly. 

Multi-Factor Authentication

You may have noticed that when you need to use a password for an app these days you’re also asked to enter a random number that’s sent to you by text message to your previously registered phone. This is called multi-factor authentication, and it’s very difficult for cybercriminals (or anyone else) to break. A Compliance as a Service provider will be able to implement this for any of your services that might require it.

Data Storage and Distribution

The EU’s GDPR data regulations have added security requirements for financial institutions around the world, so if you do business with European customers then you’re affected. You’ll need to adhere to best practices like storing digital information with more than one provider. It’s thought that distributing storage and functions between providers like this dilutes the risk of data breaches. 

Artificial Intelligence (AI)

AI can also help you achieve compliance with regulatory requirements around security. It uses algorithms to recognize patterns in huge sets of data. That means it can do things like flag transactions that appear to stray from an established pattern. For instance, a transaction made by a US customer in London may be perfectly fine because the algorithm knows that she travels there every couple of months, but it would flag her transaction in Sydney as suspicious. 

AI also powers biometrics—a way of identifying customers using their unique features like fingerprints and facial recognition to access services. It’s one more way that a dedicated service can help your business meet compliance standards.


We Can Help

Talk to Ntiva today about its managed services and regulatory compliance assistance to ease the burden for your financial service organization.

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Want to learn more about IT Services and Support for Financial Firms? See Ntiva’s Financial IT Services and Solutions.

Tags: Compliance