Learning and Development in Financial Services: Creating Impactful Compliance Training

learning and development financial services

If there is an area of learning and development in financial services that has experienced a cataclysmic change in recent years, it’s the compliance function.

Decades of scandal and financial collapse have culminated in the recent deluge of new, more stringent, regulation. Increased regulation has resulted in massive investment and restructuring of the compliance function across the industry. 

The ripple effect of directives such as GDPR and MiFID II is that compliance training has become front and center for financial institutions. The close eye of regulators means that regulation, and the training that goes with it, is evolving quicker than ever.

For learning and development in financial services, keeping pace with the speed of business (or in this case, the speed of compliance) has never been more critical or more challenging.

So, how can L&D deliver performance-driving compliance training? 

The rise of compliance training in financial services

Studies show that keeping policies current with changing regulations is the number one challenge for 47% of organizations. In the same studies, 40% of respondents also said that training employees presented a significant obstacle. (Source)

A report by Thomson Reuters in 2018 showed that executives expected compliance costs to continue rising sharply. They cited “more training required” as one of the reasons that costs and budgets would keep growing.

Looking ahead to 2020, it seems little has changed in the intervening period. A report by PwC showed that regulatory compliance was still a top concern for financial services executives.

Source: McKinsey

How can L&D create effective compliance training for financial services employees?

Learning and development need to step up to support compliance teams in their quest to roll out the mandated training. Moreover, there is an opportunity for L&D to take up the mantle in going beyond the minimum requirements.

Good training design and process improvement can ensure genuine learning and progression takes place on an individual level. so that compulsory training can have a substantial organizational impact.

Putting compliance in context

A huge driving force behind the 2008 financial collapse was the lack of industry knowledge among financial services employees. Although some argued that it was willful ignorance, those in the industry know it was a little more complex than that.

Employees were selling complicated derivative products that they did not fully understand. They should understand the broader context of their day-to-day role, the products, the clients they interact with, and the industry in which they operate. If they don’t, the struggle for compliance training to make a genuine impact will continue.

A report by The Economist detailed the importance of knowledge management in mitigating risk in financial services. The report found that 59% of respondents identified better knowledge of the industry as the top priority for making organizations more resilient to risk.  

Providing contextual training can help employees link what they learn in mandatory compliance training with how they operate in their day-to-day roles. This can include product training and industry knowledge. 

Putting the organization in context

As we have already noted, the financial services industry is one that is constantly in flux. But what can the organization do to ensure employees are staying up to date with their external environment?

Cross-team knowledge training

Although there may be certain regulatory constraints around knowledge sharing between departments, employees must understand what goes on outside of their own day-to-day.

An employee who understands organizational goals and wider operations is more likely to make strategic decisions when it comes to their individual contribution.

The industry at large

The same goes for understanding the industry at large, including competitors, financial regulators, government policies, market shifts, and client activities.

Employees who don’t pay attention to external news become siloed. They focus only on the operations of their own department without understanding the two-way impact of market forces and how the company is (or should be) operating.

L&D teams should be looking at creative ways to keep employees engaged with the news, both in-house and external. Creating an Intranet newsfeed or distributing a company-wide email newsletter highlighting key events is a simple but effective way to keep people informed.

Supporting compliance training with this type of extra-curricular learning gives employees more context. It improves cognitive learning that takes place during a training course. 

Continuously, assess, evaluate, and refresh 

We’ve written before on the importance of assessments in the cognitive learning process, and compliance training in financial services should be no exception.

Compliance training needs to be moved from a tick-the-box exercise to ensuring learning is taking place and actually applied. L&D teams should use frequent and continuous assessment and refresher courses for employees.

Make it accessible

It’s no secret that today’s employees are time-starved. Training can often be an afterthought, especially mandated regulation-based training.

Making corporate training programs as accessible and mobile as possible for employees can go a long way towards increasing engagement with the training content.

Creating an engaging and accessible corporate learning program can be as simple as asking employees what they want or need in terms of training courses. A training intake process that provides a standardized approach to creating, submitting, and managing training requests goes a long way.

Want to sign up for free early access to Cognota’s Training Requests platform? Add me to the list!

Work with Subject Matter Experts

A great frustration for L&D teams is working with Subject Matter Experts (SMEs) to create all kinds of training, including compliance training.

Instead of viewing this as a necessary evil, L&D should recognize the opportunity to leverage compliance professionals within the organization. Collaborating with these internal SMEs can lead to more engaging training programs that keep the organization compliant and shift the culture.

Leverage technology to help keep pace

To keep up with the frequent regulatory changes and to collaborate better with the necessary SMEs, learning and development in financial services should leverage new technology where possible.

For example, a Learning Design System streamlines and standardizes the training design process, empowering SMEs to create effective training.

Want to learn more about what our Learning Design System can do for your training design process? Schedule a demo today.

The struggle to balance competitive edge with compliance presents an opportunity for L&D to affect much needed organizational change in how compliance training is viewed, managed, and rolled out to employees.

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Learning and Development in Financial Services: Creating Impactful Compliance Training