Compliance: why the financial sector should listen to its…

The financial services industry haspaid a heavy price following the global crash of 2008 – and we’re not justtalking about financial loss and fines. Reputation took a big hit andrebuilding trust has been a key priority for institutions in the interveningdecade.

The tightened regulatory frameworksince 2008 has obliged organisations to invest heavily in compliance.Sometimes, the volume of regulation has felt completely overwhelming, but it’shad to happen to protect organisations and customers alike. Substantialimprovements have been made and the cost of litigation charges in the bankingsector is down from its 2014 peak of $137 billion to $49 billion in 2016. In2019, the industry will be hoping that it has made even further steps inprotecting consumers and restoring trust.

Most organisations know that for thedownward trend in litigation to continue in the long-term, compliance willremain an integral part of the business. In EY’s 2019 Banking Barometer survey – the annuallook at the sector’s strategic priorities – compliance and conduct topicsappear four times in the top ten list of focus areas, including cyber securityas the top priority. Overall, the barometer shows a more balanced picture, butthere’s no getting away from the fact that risk and regulation continue topreoccupy the sector. 

Customer-led compliance challenges 

For L&D, there are two bigcompliance topics to prioritise if their organisations are to attract andretain customers: ethics and data protection.

Ethics – The Institute of Business Ethics lists four building blocks for an ethics programme, and one of them isthe need to provide training on ethical conduct. And, in its major Europeansurvey of employees, the Institute found that organisations with an ethicsprogramme exhibit more ethical and responsible behaviours than those that don’thave a programme. The message is clear: programmes and training do make adifference.

Data protection - GDPR added another layer of regulation forthe industry to comply with. But your customers’ privacy and data areimportant. By taking care of people’s data, your reputation will be enhanced.

Strong compliance training is goodfor business 

In our work with multi-nationalcompanies in the financial services sector and beyond, we often see a tensionwhen it comes to compliance training.  Organisations are torn between theurgent need to impart the information and prove they have done so and theiraspiration to engage people, so they are motivated to learn and apply the rulesin their everyday behaviour.  

Sometimes, it seems impossible tobalance the two, and often the sheer pressure of the compliance requirement infinancial services means engaging people takes a back seat.  Instead, whatbecomes important is that people have “done the training” not whether they canuse their knowledge to protect the business and better serve customers. Thisexplains why feedback about compliance training is often negative, with peoplecomplaining that it’s too long, too boring, irrelevant to their specific jobrole and hard to remember.

So how do you create compliancetraining that meets the priorities of the organisation, keeps the people whoare learning happy and motivated and delivers the ethical behaviours thatcustomers expect?  It’s certainly a challenge but worth the effort. 

Here are three key things we alwaysbear in mind when it comes to compliance training:

1. Make it memorable 

If something is highly complex withfar-reaching consequences is it inherently dull? Of course not, it’s is theopposite. However, the seriousness of regulation and risk in financial servicescan be a blocker to creativity.  But what if compliance training was soengaging, people couldn’t get enough of it? It’s not impossible although itdoes require organisations to change the perception that serious equates toboring.

A great example of this is Cybersecurity Sorted, the learning game we developed to make employees the first line of defence against  cyberthreats. By leveraging all the reasonswhy people love to play games, it is possible to turn complex compliance topicsinto highly creative and engaging digital learning experiences. Games use avariety of mechanics to keep people playing including things like colourfulstimuli, sound effects, scoring, levels and humour. They also enablepeople to play repeatedly until they master the topic. When you apply gametechniques to compliance content it makes it far more memorable and encouragespeople to take part; they want to reach the end because they want towin.  

2. Avoid brain dumping 

Turning weighty tomes of regulationinto compliance elearning simply doesn’t work. It’s a false economy, as peoplecan’t concentrate for long periods – they’ll forget more than they learn.Organisations are wasting money on compliance training that goes in one ear andout the other.

The art is to focus on the corethings that people really need to know. At Sponge, we pay particular attentionto this process whenever we embark on a compliance project. Working withsubject matter experts, we drill down into the content to identify what mattersmost. The result is training that’s easier to digest and engage with.

Microlearning works on the same principle of breaking down content so learningis faster, fun and more engaging.  Shorter, more focused learning alsomakes sense for the business, enabling people to fit learning more easilywithin their busy day. They spend less time away from their job, which can beparticularly important for customer-facing roles in retail banking.

3. Build the momentum

Even the best compliance trainingcan’t succeed in isolation; it needs to be part of a wider campaign thatmotivates people to take part and helps them remember for longer. You can readmore about how to create an effective learning campaign in our download on the subject.

We used this approach with insurance company AXA as part of a training initiative to enhancecustomer conversations at its business insurance contact centre. The campaignruns in three phases: preparation, activation and sustain.  Preparationinvolves measures to generate interest in the learning andcommunicate why it's happening and what people will get out of it.Activation is where the main training occurs – in AXA’s case, a week-long blendof bite-size digital learning, group discussion, on the job coaching and alearning game. Sustain is crucial and includes refresher sessions to helppeople remember and apply the learning.

Using this approach, AXA saw a massiveincrease in positive customer comments about its business insurance advisors, up by 113% in the period after the learning campaign. 

Conclusion

The financial services industry is recovering after a difficult decade. The task now is to maintain the recovery.Keeping everyone fully engaged in compliance is critical if this is to be achieved in the long-term. Customers want their banks, building societies,insurers and other financial institutions to act ethically and obey the rules –the best way to ensure this happens is by creating compliance training that is both fit for purpose but engaging and memorable too.

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