Eight benefits of outsourcing a Nominated Officer role in Guernsey

4 November 2024 | UK & Europe | Articles

Outsourcing key regulatory roles, can provide significant advantages to financial institutions. One such role that could be considered is the Nominated Officer.

A Nominated Officer’s primary role is to assist the Money Laundering Reporting Officer (“MLRO”) in monitoring and reporting any suspicious activity in your organisation relating to money laundering or terrorist financing and report it.

By outsourcing to an experienced provider such as Bovill Newgate, organisations can ensure robust compliance, resource efficiency, and continuous support. In this article, Cilla Torode – Consulting Lead and Paul Ford – Head of Regulatory & Governance, both in Guernsey, explore the eight key benefits of outsourcing a nominated officer role, highlighting how such a strategic approach can enhance your institution’s regulatory framework.

1. Enhanced regulatory compliance

Boards must ensure that the Money Laundering Reporting Officer (MLRO) can act independently and assuredly in their role. Outsourcing to Bovill Newgate helps meet these regulatory expectations seamlessly. By holding the MLRO role in-house and formalising additional support with reputable regulatory consultants, the Board can better meet regulatory expectations.

2. Resource allocation

Boards need to demonstrate that the MLRO has sufficient resources to perform their duties. Collaborating with reputable outsourcing providers to fill support roles such as the Nominated Officer ensures that the MLRO receives the necessary support and full staff cooperation.

3. Integrated risk management

The MLRO’s duties extend beyond handling disclosures and are vital in assessing relationship risks within business frameworks. Outsourcing additional independent support enhances assurance for these broader responsibilities more effectively.

4. Comprehensive role fulfilment

Often, the roles of MLRO and MLCO are combined, broadening the responsibilities to include oversight of policy compliance. Outsourcing to reputable service providers enables businesses to expand duties under a contract to support the MLCO function (or compliance officer).

5. Support and independence

The primary role of the Nominated Officer is to support the MLRO and act in their absence. Outsourcing ensures that this support is robust and continuous. Similar to external legal support for in-house lawyers, regulators understand the benefit of formal engagements with regulatory consultants for additional advice and support for the MLRO role. This enhances the MLRO’s ability to think independently while providing a demonstrable platform that the Board supports the regulatory role.

6. Flexibility and assurance

Outsourcing the Nominated Officer, which is no longer a supervised role and only requires Board appointment and access to the FIU portal (THEMIS), provides flexibility. The need to notify GFSC arises only in cases of prolonged MLRO absences.

7. Key person risk mitigation

A simple retainer or letter of engagement with a third-party provider outlines the outsourced function, ensuring smooth transitions during planned or unplanned MLRO absences, thus mitigating key person risk.

8. Seamless handover and broader network

In holding the Nominated Officer role, providers such as Bovill Newgate will have oversight of key identified risks within the business through the SAR register and access to THEMIS. This enables a smooth handover of responsibilities during both planned and unplanned absences of the MLRO, further mitigating key person risk. By outsourcing and allowing for additional consultancy work, firms can ensure compliance, continuity, and access to a broad network of expertise, making it a strategic choice for financial institutions.

Reach out to the Guernsey team to appoint a nominated officer

Outsourcing regulatory roles in Guernsey offers numerous advantages, including comprehensive role fulfilment, support and continuity, flexibility, and risk mitigation. By partnering with Bovill Newgate, financial institutions can ensure their compliance frameworks are robustly supported, even during absences or transitions.

We encourage financial institutions to consider the strategic benefits of outsourcing their regulatory roles. Reach out to the Guernsey team today to appoint a nominated officer and strengthen your organisation’s regulatory compliance and risk management.