Marking your own homework: the case for independent remediation and verification

Once the immediate urgency of a regulatory crisis begins to subside, organisations face a pivotal moment: how to demonstrate to regulators, the board, and other stakeholders that it has not only recognised the seriousness of the situation but is actively committed to addressing it in a structured, credible, and lasting way.

The temptation may be to rely on internal teams or previously engaged consultants to lead the remediation effort. However, let’s be blunt: if those same teams or advisors were involved in creating (or failing to detect) the problems in the first place, they’re unlikely to be best placed to rectify or verify them now.

This is the moment where the board must step in and make one of its most critical decisions: appointing an independent, experienced regulatory and compliance professional to lead the remediation and verification process.

Often, remediation efforts are led by internal teams or longstanding advisors who, while well-meaning, may lack the distance or perspective to properly evaluate what went wrong or how best to prevent recurrence.

Bringing in an independent professional provides:

1. Objectivity and fresh perspective

An external expert offers an impartial assessment of the issues, free from internal dynamics or prior involvement. This independence enhances credibility, both with the board and with the regulator.

2. Experience navigating complex regulatory environments

A seasoned compliance professional will have experience engaging with regulators, structuring remediation plans, and managing similar crises. They understand what regulators expect and how best to demonstrate progress.

3. Technical insight

Regulatory frameworks, particularly in areas such as AML/CFT, are nuanced. An experienced advisor can pinpoint technical deficiencies, assess root causes, and benchmark current practices against regulatory expectations and industry best practice.

4. Structured remediation and verification 

A rigorous, well-documented verification process helps ensure that all deficiencies are identified, not just the most visible or pressing. This forms the foundation of a credible, prioritised remediation plan and the assurance for those involved in oversight.

5. Reassurance to all stakeholders 

For boards, investors, clients and regulators alike, the involvement of a respected independent advisor sends a clear signal: the organisation is serious about resolving the issues properly and sustainably.

It’s natural to want to move quickly to fix what’s broken yet remediation without proper mapping, planning, commitment and control can lead to superficial fixes that overlook deeper or systemic issues. A genuine remediation plan addresses the true causes of the breach, not just the symptoms.

The need for formal verification is another part of the continuum.

It is not uncommon for remediation fatigue to set in amongst those facing the intensity and overwhelm those executing regulatory remediation alongside BAU.   The verification process ought to be a structured, evidence-based review to ensure that the remediation is completed as planned, root causes have been effectively addressed, and the changes are embedded and sustainable.  It’s not just about ticking boxes—it’s about demonstrating that the control environment is now robust and compliant.

Common questions to be answered as part of verification

• Are the board prepared to sign-off on completion of the remediation?
• Is there a plan in progress to ensure long-term cultural and procedural improvements, not just technical fixes?
• Are there clear controls, KPIs and escalation routes?
• Has the firm turned the corner for good?

Regulators increasingly expect verification to be separate from the remediation team, to avoid conflicts of interest. The Jersey Financial Services Commission has issued guidance on how to compile a remediation action plan and is a must read for anyone contemplating a remediation. https://www.jerseyfsc.org/news-and-events/guidance-on-remediation-action-plans/

The way an organisation responds to a regulatory crisis is often as important as the crisis itself. A thoughtful, transparent, and expertly led approach to verification and remediation can significantly reduce regulatory risk, rebuild trust, and lay the foundations for a stronger compliance culture moving forward.

In short, this is not just about addressing a past issue, it’s about investing in future resilience.