Compliance training – keeping up to date with regulatory demands

By Dirk Thissen | 5 March 2015

The finance sector faces mounting challenges in managing compliance training especially in the face of the higher staff churn forecast for 2015-16.Compliance training is mandated by law and it takes up a significant portion of the compliance budget, on average about 24 per cent, so getting it right is paramount. Yet learning and development professionals in the finance sector continue to be challenged by limited resources, staff turnover and difficulties in monitoring who within the organisation is not compliant ready.

Increasingly it is prosecutors and regulators who are helping to make the business case for effective training programmes by linking poor compliance training to consequences such as employees aiding and abetting drug lords and terrorists – and by imposing heavy fines.

Financial sector firms have been improving their compliance and ethics training programmes but they are still widely failing to measure the effectiveness of their training. The buzzword now is “evaluation” and firms need to have systems in place to evaluate whether the training is effective and relevant. The regulators too are taking an interest in evaluating the training companies are carrying out. Many financial organisations believe that their programmes’ effectiveness can be measured by completion rates, but evaluating the effectiveness of training often goes beyond this and might include assessing tasks carried out subsequently during the employee’s job role to see if they reflect the training objectives.

Measuring effectiveness

As training programmes see more scrutiny from regulators and from members of the board, firms have to find better ways to measure training and effectiveness. In order to measure effectiveness, the first step is to define the goal of the training before deciding how you will measure whether that goal has been reached. This could include qualitative evaluation – asking the trainees their opinion of the programme at the end or using surveys to measure changes in attitude – testing whether employees have learned a set of facts, looking for changes in behaviour demonstrated in subsequent work, or simply that the training has provided a high return on investment. There is no single measure of effectiveness but it is essential to budget for measuring it – firms must measure effectiveness and be seen to do so and this evaluation process costs money.

Developing an effective training programme also requires firms to identify the areas that pose the most risks to the organisation – staff on the front line or traders might represent the greatest risk and benefit most from targeted training that addresses specific risks rather than a “one type fits all” approach.

The best training programmes are tailored to the needs of specific jobs and departments. Scenario-based training works well as it allows learners to relate it to their work. The real test of the effectiveness of training might not be ticking a box for every lesson completed but rather whether each employee can interpret the lessons and apply them to a specific situation.

Making time for training

Managers face the challenge of creating time for training alongside the demands of the regular working day for their staff. A three-day off-site training course is often not an option and a ‘little and often’ approach to learning delivery using a variety of devices is increasingly seen as most effective. Investment in innovation and flexible e-learning solutions that are mobile enabled may not come cheap but can provide significant return on investment to firms who get it right, particularly those who are otherwise paying out for thousands of employees to attend external courses.

In some cases the challenge of incorporating training into the working day can present an opportunity – by providing training at the point of need - or as the support is actually required during employees’ day-to-day work. Training provided within the workflow can be very successful and is more likely to be retained as it offers support to employees as and when they actually need it.

Training systems must be designed to keep up with today’s compliance demands, with reporting facilities that keep the firm abreast of who has done what training, and which training needs to be refreshed. E-learning platforms are often designed to provide this type of data but managers and training professionals must supplement this with a broader strategy to keep all training and accreditation up to date and effective, whether that is through online, in-house classroom sessions or via external providers.

Creating a culture of compliance

Compliance professionals have long had the challenge of getting management to sign off on training despite the wave of enforcement actions. The financial sector has traditionally taken a rather reluctant approach to training, providing training to staff simply because they needed to tick compliance boxes. That is changing and compliance training is more often now seen as something that benefits the organisation.

Training is increasingly part of broader efforts to foster a "culture of compliance" that will help people working under pressure to do the right thing instinctively. Management and the board have a key role to play in enabling a trickle-down culture of compliance, by keeping abreast of what is actually going on in their business and being informed as to the legal ramifications. This ethos then trickles down the firm to all employees, especially new starters who should absorb a compliance ethos right from the start during the induction process.

In 2015 firms face the twin challenges of attracting and retaining the brightest and best staff and keeping the regulators happy. Savvy organisations can use compliance training to address both these issues, creating a forward-looking healthy compliant environment that people want to work for and one which is safely on the right side of the regulators.


By Dirk Thissen, Director,  IMC Learning

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