Driving compliance in financial services

For the financial services industry, the vast, complex and constantly changing area of compliance presents a formidable challenge. To keep individuals and businesses operating compliantly requires extensive and effective training. Get that training right, however, and compliance in financial services brings efficiencies in performance and delivers a distinct competitive advantage.

The compliance challenge is growing

Industry and government regulation, third-party risk, cryptocurrencies, cyber security and cybercrime, money laundering, international sanctions – the list of finance-specific compliance requirements goes on and on. What’s perhaps forgotten in considering these headline-grabbing areas is that financial institutions also need to meet the compliance challenges that all businesses face: employee well-being, data protection, health and safety and employee misconduct, for example. Each of these areas of compliance requires training and support that needs to be adapted as and when standards and legislation change. The UK’s recently introduced Consumer Duty provides a case in point.

Non-compliance isn’t an option

In the past ten years the average cost of non-compliance has risen by 45%. The fines incurred are eye-watering. In 2022 penalties for Anti-Money Laundering infractions alone totalled $8 billion worldwide. Violating GDPR can cost firms 4% of their global annual revenue or €20 million, whichever is greater. On average organizations lose $5.87 million in revenue for a single incidence of non-compliance.  

The cost of non-compliance extends beyond fines and penalties. Non-compliance can result in disruption to the business while you respond to the infraction and costly and time-consuming lawsuits as you fight actions from customers, employees and institutions. The biggest cost may be reputational as customers shy away from a tainted brand.

Meanwhile the threats to maintaining compliance continue to grow. 2022 saw a 42% increase in cyber-attacks. Verizon has reported 5,199 confirmed data breaches in the past year.

Faced with this landscape addressing compliance appears cost-effective and essential: cheap at the price.

Compliance training has to fit the purpose

How to operate compliantly can and must be learned and not left to chance. Given the complexity and scale of compliance in the financial services sector training has to be extensive and comprehensive. But as compliance is constantly evolving training also needs to be adaptable, agile, flexible and tied to financial services industry standards and qualifications.

Elearning offers a way forward

Elearning modules for compliance are easy to create, update and repurpose. Online assessments track comprehension and completion. The learning platforms that store and distribute learning content have notification and recommendation features that alert employees when new or repeat training is required. With digital learning, new content covering the latest regulations and procedures can be made instantly accessible across the organization on fixed and mobile devices. Easy customization and localization ensure businesses present in different geographies can be provided with geo-specific information given in the local language. A further advantage of elearning is that promotes standardization of information and procedures driving compliance across the organization. Learning analytics gives trainers and managers real-time data allowing them to monitor compliance training activity and individual performance.

Individuals matter

Often non-compliance results from an individual’s error rather than a system failure. As a result, training needs to be inclusive and personalized. Personalization in learning means identifying the needs, status and competencies for individual learners. Personalized learning presents information in context so that individual learners understand not only the material but why and how it matters to them and their roles. Making learning relevant is a key way of improving engagement with training, retention of knowledge and, consequently, job performance.

There is no one-size-fits-all to compliance training

Financial compliance evolves and training must keep in step with that evolution. Elearning provides the means to deliver training continuously and allow access to content whenever and wherever it’s needed. Content can be tailored to the requirements of departments or individuals based on demand and priority. Developing micro-content enables differentiation so that only those that require specific information get it. Micro-learning is also a vital tool for quickly updating people on changes to compliance procedures and for refresher training and spaced practice to aid knowledge recall. Micro-content can be used to upskill individuals and improve competency as part of personalized learning plans.

Compliance training is more than a safety net

Compliance training tends to be reactive. It focusses on covering the bases and plugging loopholes. But switching to a more proactive model that centers on learners and encourages them to take some responsibility in ensuring they work compliantly makes training more sustainable – and effective. Context-based learning helps people understand the consequences of acting – and not acting – compliantly. Learning platforms facilitate collaboration and knowledge-sharing, encouraging employees to share their experiences, ask questions, and raise issues. Having actively informed and engaged people improves performance and compliance and enhances security.

Compliance training helps delivers a competitive advantage

Training for compliance in financial services is a necessity, but it can be so much more. The primary training objective is that regulatory requirements are met and data and other assets are secured. But with imagination and the opportunities offered by elearning compliance training can offer other benefits. Well-trained employees who understand the need for compliance and their role in it are not only more likely to operate compliantly but also to perform in a more effective way and advance best practices. A business staffed by compliant and engaged employees holds a distinct advantage over its competitors.

Learning Pool is helping to drive compliance in financial services by helping global names maintain regulatory standards and perform risk management with engaging elearning mapped to industry standards and qualifications. Find out more.