Financial institutions around the world are expected to be fully compliant with laws, regulations and regulatory expectations. But although a high level of compliance is desirable, it is not easily achievable. 

Looking into past enforcement actions e.g., in the UK (issued by FCA in 2021) reveal that 45 % of final notices identified deficiencies in firms’ training programs, highlighting a reliance on inadequate or a ‘one-size-fits-all’ approach to training employees, or a culture where employees did not complete mandatory training. 

If the ‘secret ingredient’ to a successful and sustainable compliance program is training, then how should training be designed to be effective? 

• Training Need Analysis/Assessment

Financial institutions should establish a process that enables them to assess the training needs of all employees. This should be done annually and include all employees, including part-time workers, interns, board members, consultants, and outsourced staff. The assessment should cover training needs for products, job function and personnel (job performance).

• Effective Training Plan and its Communication

The design of the training plan should start with the definition of the learning objectives. Those should match with the results from the training needs analysis. Subsequently a training catalogue should be put together that serves as central repository of all available trainings (including name of training, vendor/trainer, eligibility criteria, etc.). Trainings can be delivered online of in-person by internal staff or an external party.

• Assessing Training Success

No matter if a training has been delivered in-house or externally, in-person or online, success can hardly be measured if the training does not include a final assessment. Being aware of the assessment upfront can motivate employees during the training and gives feedback to the trainers. There should be a clear process how to handle employees who fail an assessment (additional training, second attempt, etc.).

• Tracking and Documentation

The attendance of all trainings conducted in a financial institution should be tracked and the training content should be documented by one department (e.g., Learning Management System).  New joiners should conduct certain trainings within the first months of their employment.

• Provision of the Necessary Budget

Although this sounds basic, the training budget might make or break the success of the overall training efforts. For example: Delivering customized in-person training to a highly specialized job function might be costly (e.g., trade finance operations) but there is no other way of achieving the desired training result. This should be communicated to and acknowledged by decision makers.