This is part 4 of a five-part series with Tom Fox and the FCPA Compliance Report on defining and building an effective compliance program. The series will consider key challenges in compliance, why compliance needs a seat at the table, how to do compliance on a budget, compliance training and culture, and what is on the horizon for compliance.
Ongoing compliance training is an important part of defining and building an effective compliance program. Ideally, training should raise awareness of the institution’s policies and procedures, and should operationally embed compliance at all levels to reinforce a culture of compliance throughout the organization.
To do so, training needs to be comprehensive and tailored to the organization—both in terms of the subject matter that it covers and in terms of the employees it reaches. Training needs to start at the very top of the organization so that a culture of compliance is built at the board of directors level and in the C suite with the executives, and it needs to thoroughly cover all three lines of defense: the lines of business, the compliance department, and the audit function. Every single employee in a bank needs to have at least a basic level of awareness of relevant compliance issues—AML, CFT, ABC, and export issues.
Training also needs to be tailored to the different audiences and their roles within the company. For example, a board member is going to have different needs when it comes to training than an auditor. This means having a multilevel training program that specifically thinks about the roles of the people who are participating.
Training also needs to be tailored to the financial institution itself and its risk profile. If you have a major global bank that’s doing dollar clearing and providing correspondent services, that’s a hugely different risk profile than if you have a community bank focused on mortgage lending to clients within their community. This means there is no such thing as a one-size-fits-all compliance training program.
Most would agree that investing in tailored training will increase the effectiveness of an organization’s compliance program. But how can that effectiveness be proven? Demonstrating effectiveness comes down to testing and certification—checking that people are getting out of the training what the organization needs them to. This means testing the employee base, certifying them, and creating accountability mechanisms and corresponding corrective actions. It also means that training needs to be continuous because both the organization’s risk profile and the world are always changing. The current coronavirus pandemic has reminded us all that threats and risks are constantly evolving. Training needs to be continuous and it needs to be up to date.
How to Deliver Training
One of the ongoing discussions, debates, and questions within the compliance community is what is the best way to deliver training? Multinational organizations may have thousands of employees across the globe, with different languages, different cultures, and different skillsets, some who may have access to a computer and some who may not. How to determine the right blend of online training and live in-person training?
Regulators are pretty much neutral on how training is delivered; they are most concerned about the content and the results of the training. Both online and in-person training have strengths and weaknesses that should be considered to help organizations build a successful and effective training program.
- Online training can be provided quickly and sometimes less expensively, especially across a globally dispersed organization. It can also quickly react to changes in a regulatory policy or to the risk environment. This means institutions can quickly develop an online training that is responsive, for example, to the current situation and the current threats from COVID-19. Downsides such as a potential lack of engagement with the material and with the audience can be mitigated in a large part through course design. This might mean offering a mix of different learning modalities and finding ways to make sure that participants can still interact with each other and with the faculty and that they have the opportunity to collaborate with others and to work through real-world examples.
- In-person training is more interactive, but it can be expensive, especially for certain global entities where training would require people to fly in from around the world. It also can be logistically complicated and it can take employees away from their desks and their roles for days at a time.
Many experts believe a blend of the two methods is best, as this helps organizations draw on the positive attributes of both to create the most effective, tailored training.
Obviously, right now is an incredibly challenging time for in-person training, both due to the health crisis and the economic downturn. Organizations need to make sure they are not letting the ideal of a perfect Socratic training program get in the way of tailored, effective training. Training still needs to happen and, even if meeting in person is not possible, it is clear that regulators are expecting business as usual in regards to training. In the reality that we’re living in right now, making it work with online training means being focused on how to make online training interactive and effective.
To listen to the next podcast in the series, please click here.