Compliance: why the financial sector should listen to its customers.

The financial services industry has paid a heavy price following the global crash of 2008 – and we’re not just talking about financial loss and fines. Reputation took a big hit and rebuilding trust has been a key priority for institutions in the intervening decade.

The tightened regulatory frame work since 2008 has obliged organisations to invest heavily in compliance. Sometimes, the volume of regulation has felt completely overwhelming, but it’s had to happen to protect organisations and customers alike. Substantial improvements have been made and the cost of litigation charges in the banking sector 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 in protecting consumers and restoring trust.

Most organisations know that for the downward trend in litigation to continue in the long-term, compliance will remain an integral part of the business. In EY’s 2019 Banking Barometer survey – the annual look at the sector’s strategic priorities – compliance and conduct topics appear four times in the top ten list of focus areas, including cyber security as the top priority. Overall, the barometer shows a more balanced picture, but there’s no getting away from the fact that risk and regulation continue to preoccupy the sector. 

Customer-led compliance challenges 

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

Ethics – The Institute of Business Ethics lists four building blocks for an ethics programme, and one of them is the need to provide training on ethical conduct. And, in its major European survey of employees, the Institute found that organisations with an ethics programme exhibit more ethical and responsible behaviours than those that don’t have a programme. The message is clear: programmes and training do make a difference.

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

Strong compliance training is good for business 

In our work with multi-national companies in the financial services sector and beyond, we often see a tension when it comes to compliance training.  Organisations are torn between the urgent need to impart the information and prove they have done so and their aspiration to engage people, so they are motivated to learn and apply the rules in their everyday behaviour.  

Sometimes, it seems impossible to balance the two, and often the sheer pressure of the compliance requirement in financial services means engaging people takes a back seat.  Instead, what becomes important is that people have “done the training” not whether they can use their knowledge to protect the business and better serve customers. This explains why feedback about compliance training is often negative, with people complaining that it’s too long, too boring, irrelevant to their specific job role and hard to remember.

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

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

1. Make it memorable 

If something is highly complex with far-reaching consequences is it inherently dull? Of course not, it’s is the opposite. However, the seriousness of regulation and risk in financial services an be a blocker to creativity.  But what if compliance training was so engaging, people couldn’t get enough of it? It’s not impossible although it does require organisations to change the perception that serious equates to boring.

By leveraging all the reasons why people love to play games, it is possible to turn complex compliance topics into highly creative and engaging digital learning experiences. Games use a variety of mechanics to keep people playing including things like colourful stimuli, sound effects, scoring, levels and humour. They also enable people to play repeatedly until they master the topic. When you apply game techniques to compliance content it makes it far more memorable and encourages people to take part; they want to reach the end because they want to win.  

2. Avoid brain dumping 

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

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

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

3. Build the momentum

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

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.