Imagine a world where your financial services team is always prepared, always knowledgeable, and always ahead of the curve. Sounds great, right?
It’s not just a fantasy. That world is closer than you might think. When you integrate the right learning and development for your financial services team, you’ll keep your team both compliant and competitive.
In today’s fast-paced, regulation-heavy financial sector, creating a robust learning and development program isn’t just a luxury – it’s a necessity. Here’s why you need to focus on L&D for financial services – and some strategies to help you do so effectively.
What is L&D in Finance?
Learning and development in financial services is about more than just compliance training. It involves continuous learning, upskilling, and reskilling to meet the demands of a highly dynamic industry. With changes in regulations, technological advancements, and an increasingly globalized workforce, a strong L&D program is key for any financial services firm.
The goal here is to create proficient corporate learning experiences that align with organizational goals, engage employees, and ultimately, drive business success.
So why is L&D so crucial for financial services?
- Keeping Up with Regulatory Changes: Staying updated with the latest regulations is critical. According to a study by NAVEX Global, 47% of organizations find it challenging to keep their policies current with changing regulations. This makes a strong L&D program indispensable.
- Enhanced Employee Performance: Quality training boosts employee performance. When your team is well-trained, they can handle tasks more efficiently, leading to better customer service and higher profitability.
- Competitive Advantage: Continuous learning and development keep your employees ahead of the competition. With industry-specific training, your team can adapt quickly to market changes, providing your firm with a competitive edge.
What Challenges Are Associated With Training for Finance Employees?
Despite the many benefits of learning and development in financial services, the sad truth is that it’s not an easy pill to swallow. There are a few factors that make L&D particularly complex, especially compared to other industries:
1. A Highly Regulated Industry
The financial services sector is one of the most regulated industries around the world. Compliance with laws like the Dodd-Frank Act, GDPR, and AML regulations isn’t just recommended – it’s mandatory.
Studies have repeatedly demonstrated that keeping policies current with changing regulations is the biggest challenge for nearly half (47%) of all organizations. In those studies, 40% of respondents have also indicated that training employees presents a significant obstacle.
Yet it’s undeniably important, since failure to comply can result in hefty fines and tarnished reputations. L&D for financial services, must be nimble and dynamic enough to cover and comply with all regulatory requirements.
It must also be able to be delivered across multiple regions without becoming too locally-specific or worse, obsolete before it can deliver the necessary impact.
2. A Hybridized Workforce
The COVID-19 pandemic has accelerated the shift to remote work, and the financial services industry is no exception.
With employees working both remotely and on-site, delivering consistent training becomes a challenge, especially for teams that are geographically dispersed.
Traditional classroom-based training methods are no longer sufficient. Organizations need to adopt digital solutions to ensure all employees, regardless of location, receive the same quality of training.
3. Rising Attrition Rates
According to data from the US Bureau of Labor Statistics (BLS), in May 2022, 220,000 people left their jobs in the sector. While the turnover rate did slow down slightly in 2023, it’s still a huge concern, according to research compiled by accounting and consulting firm Crowe.
“If financial institutions could start to focus on career-development plans for their employees, maybe it would help with turnover, especially since that’s the No. 1 reason employees are leaving,” says Stephanie White, a senior manager at the firm.
One notable challenge here is that fintech companies continue to rise in prominence – and as a result, traditional financial institutions are facing increased competition for talent.
High attrition rates mean that firms need to continuously recruit, train, and retain employees, which can be both time-consuming and costly. Effective training programs that engage employees and demonstrate clear career progression can help mitigate this issue.
4. Demanding Customer Base
Today’s customers expect personalized and efficient service, which requires well-trained employees who can quickly adapt to new customer service strategies and technologies.
Whether it’s a simple financial transaction, like payments or remittance, or situations like trouble accessing funds or understanding their accounts, frontline employees need certain tools and resources to address these issues proactively and efficiently.
Learning and development for financial services must, therefore, provide employees with the skills they need to meet high expectations, from understanding complex financial products to managing customer relationships.
5. Cost and A Lack of Perceived Immediate ROI
It’s a difficult time for banks and financial institutions, who are facing rising interest rates that are sowing seeds of uncertainty across the industry. Unfortunately, this could affect profitability when consumers and businesses are hesitant to borrow.
Indeed, increasing profitability is often cited as the top goal of employee development, according to the OnCourse Learning 2024 State of Learning & Development in Financial Services report. Sixty-one percent of respondents cited increased profitability as the goal of learning programs, followed by increasing the number of customers (53%) and increasing customer satisfaction (47%).
While learning and development can – and does – have a profound impact on a company’s growth and overall profitability, it still costs money. In fact, a report by Thomson Reuters in 2018 found that executives expected compliance costs to continue to rise, citing the issue of “more training required” as one of the biggest reasons why costs and budgets would continue to grow.
When figuring out what’s on the chopping block, companies have begun looking more closely at every dollar they invest in their operations, which includes their people and their L&D programs. The problem with this approach, is of course, that cutting corners on training quality can lead to long-term issues, including compliance risks and overall poor performance.
Understanding the Impact of Training
But without knowing the impact, value, and ROI of their learning and development, it’s tough for teams to know what needs to go and what needs to stay. Many people are still relying on “smile sheets” from learners to determine the success of a training, but showcasing a program’s impact to executives who control the budgets requires so much more than just positive feedback forms.
When budgets are at risk, L&D teams need to have robust reporting, metrics, and the ability to demonstrate their overall contribution to performance. According to the Kirkpatrick Model, teams need to be able to rate training methods against four key criteria: reaction, learning, behavior, and results.
The LearnOps framework is particularly helpful in this regard, since it helps teams measure the effectiveness of learning programs to showcase a tangible return on learning investments, and then to optimize it, using data to monitor performance and identify areas for improvement.
7 Strategies for Learning and Development Financial Services Leaders Should Know
Clearly, it’s time we start investing more in L&D for financial services. It’s not just a nice-to-have; it’s a must-have.
We need to use our training program to deliver critical knowledge and information, but also to give our teams the space to practice, problem-solve, and support each other.
Here are a few strategies you should be taking advantage of as you develop your company’s L&D:
1. Focus on the Most Business-Critical Areas
Studies have shown that the top 3 business goals of employee development and training are to increase profitability (61%), increase the number of customers (53%), and increase customer satisfaction (47%).
But when every dollar matters, it’s important to focus on efficiency and perhaps not try to hit all these targets at once. Set clear goals and think about the single most critical area where you need more employee training.
For financial services, this often includes regulatory compliance, risk management, and customer service. By focusing on these areas, you can ensure that your employees are well-equipped to handle the industry’s unique challenges.
For example, specialized learning and development financial services courses on anti-money laundering (AML) and know-your-customer (KYC) regulations can significantly reduce compliance risks.
2. Offer Specialized, One-of-a-Kind Training
Generic training programs are less effective in a specialized field like financial services. You need to offer training that is tailored to the specific needs of your organization and industry. This could include courses on financial instruments, portfolio management, or advanced data analytics.
Financial services companies, especially younger fintechs and neobanks, strive to offer new experiences.
Of course, these new experiences also require new types of training – which could set the firm apart from its competitors. The benefit here is that it’s easy to position training as a perk, helping you sell it more to your employees than if it were just a mandatory training they were expected to complete.
Despite consumer preferences to conduct transactions via mobile devices, customer service via chat windows still has the opportunity to impress. Because of this, offering unique text-based customer service can demonstrate industry leadership.
It does require unique training, but it’s likely training your employees will want to participate in because it’s benefiting their personal careers as well as their roles within the company.
To go one step further, you should try to make the training interactive and engaging, so employees see it as an opportunity to build their skills rather than just a chore.
3. Work With Subject Matter Experts (SMEs)
Get leaders involved, including HR leaders, supervisors, and, most importantly, subject matter experts. Who better to understand the inner workings of a product, service, process – or the industry as a whole – than those with the most well-rounded knowledge of the organization and the industry?
Sourcing SMEs and engaging them to assist with the development of training content can set the company apart, especially if you go the extra mile and find SMEs outside of your organization.
They can provide insights into the latest industry trends and best practices. This ensures that your training programs are up-to-date and impactful. For instance, partnering with seasoned financial analysts can offer invaluable perspectives on market trends and investment strategies.
4. Gather Knowledge from the Industry at Large
Go outside of your organization as much as possible. Incorporate into your learning and development content surrounding competitors, government regulation, technologies, consumer behavior, and the like.
In this way, employees – and by extension, the firm as a whole – can stay on their toes. They can also prevent becoming siloed.
An example? Trailblazer banks – in other words, those that are far ahead of their peers – tend to invest heavily in areas that the industry is demanding most. These include skills development, agile work methodologies, design thinking, and iterative design.
“They have 1.3x more people in IT operations, 3.7x fewer people in middle/back-office and front-line service roles, and 2.3x people in transformation roles than their lower-performing counterparts,” says Josh Bersin.
5. Offer Continuous, Technology-First Learning
Adopt a technology-first approach to training. Take advantage of e-learning platforms, virtual classrooms, and mobile apps to deliver learning opportunities. L&D is uniquely positioned to provide on-target, short-form, easy-to-digest learning that’s user-friendly, delivered-seamlessly, and easily adaptable.
Human resources consultant Josh Bersin calls this strategy “learning in the flow of work”: delivering micro-learning as needed, so as not to disrupt or distract the employee’s ability to complete tasks. Rather than holding training sessions once a quarter, weave them into the workflow. This makes it easy for employees to complete on their own time.
Integrating AI and machine learning can also personalize the learning experience. They provide tailored content based on individual learning styles and progress.
“The next transformation in L&D will likely be driven by generative AI as it enables efficient, personalized content creation and advanced assessment methods,” reports the Corporate Finance Institute. AI has the ability to “provide immediate, personalized feedback, enhancing the learning experience, especially in complex banking and finance technical skills.”
VR and AR can also create immersive learning environments, allowing employees to practice skills in a controlled, risk-free setting. For example, VR simulations can replicate trading floors or customer interactions, providing hands-on experience without real-world consequences.
6. Continuously Review and Refresh Training Content
We’ve written before on the importance of assessments, and in financial services, it’s more critical than ever.
With the risk of skills obsolescence, staying on top of new compliance laws, and a brutally competitive business environment, banks and other financial institutions cannot afford to lean on content that provides no value or worse, instructs with outdated information.
Despite being aware of this risk of becoming obsolete, most businesses aren’t launching reskilling programs at the scale that’s needed. Only 14% of financial services CEOs have made progress in this area.
You need to be constantly relaunching, revising, and revisiting your content to make sure it’s relevant and effective. Solicit feedback from employees to identify areas for improvement, and make any necessary adjustments. That way, you can make sure your programs stay aligned with industry changes and organizational goals.
Studies indicate that 72% of institutions will increase their training budget in the next two year. The average annual budget for third-party training programs is $1.9 million. Don’t let that money go to waste – make sure you’re keeping your content as fresh as possible.
7. Operationalize Learning
Integrate learning into the daily operations of your organization. Create a culture where continuous learning is encouraged – and rewarded. Use real-world scenarios and case studies in your training programs to bridge the gap between theory and practice.
The underlying message here is this: you need to take a big-picture approach. A newer methodology gaining momentum, learning operations, or simply LearnOps, unites team members from the learning function with those in the business, including operations, finance, and IT.
This approach doesn’t just save money – but it also saves time. 50% of respondents in one survey indicated that a lack of time was the biggest obstacle to implementing L&D programs. By making this a built-in approach, rather than something that just drains more time out of your team’s day, you can dramatically reduce these perceptions.
LearnOps is about unlocking operational inefficiencies across people, processes, and technology to produce better outcomes. It enables the training function to move from cost center to performance driver, leaning on data to track learning measurement and tie results back to business performance.
Maximize These Financial Services Learning and Development Innovations
With unified learning operations, or LearnOps in place, data, analytics, and insights are accessible to all who touch the learning function – from designers to subject matter experts to managers and business unit leaders.
By considering all the elements, people, and factors involved in the creation of effective learning and development for financial services, we can measure our impact more comprehensively. Together, we can make stronger, more effective decisions.
As the first and only operations platform built specifically for L&D teams, Cognota’s LearnOps platform brings the entire learning workflow into one platform. In addition to saving time and realizing cost efficiencies, learning leaders receive auto-generated insights into the performance of their teams and the learning needs of their entire organization.
“Nothing was connected. Reporting was in silos,” explains Krista Sim of financial planning company Sun Life. “We needed a central process and location for our work where everyone could connect and come to and have a one-stop shop for intake, scheduling, and project management. The capacity piece is really, really amazing.”
By leveraging a LearnOps platform, your organization, like Sun Life, can access diverse tools and methodologies to tackle today’s complex challenges.
Transform your approach with a complimentary LearnOps consultation. Schedule a demo now to kickstart your journey towards optimized learning operations.
