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Three ways to refresh your organization’s view of compliance


Does the mention of compliance cause fear or tension in your organization? When it comes to compliance, it’s rare to see financial services leaders approach it with a smile. While the financial services industry has always faced some sort of regulation, most view it as a necessary evil. It is easy—perhaps too easy—to view compliance as a burden. But that negative mindset will only paralyze the organization and its ability to be nimble and prepared when changes occur.

Regulatory requirements will always play a role in the financial services industry and are ingrained in every aspect of the business and every decision made, big or small. To the delight of some, the industry is abuzz over a new period of “deregulation.” In reality, this amounts to regulatory change, not necessarily a reduction in regulations—and financial services leaders need to understand, accept and prepare for these changes.

Leaders who shift their mindset from compliance as an obligation to an opportunity will thrive and become even more productive. To best prepare for any regulatory change, here are three key ways to revitalize your organization’s approach to compliance management.

1. Compliance is not a single department’s responsibility

Rethink compliance by recognizing that it must involve more than just one department. There is safety in numbers: Every individual within the financial services organization carries the weight of meeting regulatory standards in their daily activities. Regulatory compliance impacts some roles more than others, but every member of the organization manages compliance in some way. In most cases, regulations are implemented months after passage. Everyone from front-line employees to the board of directors needs education on regulatory changes and the impact on their role before the effective date.

Rather than viewing compliance as a laundry list of orders, successful leaders see it as an opportunity to improve processes, build a better workplace and provide exemplary customer experiences. By embracing a sense of collective responsibility, leaders can build a positive culture of responsibility that permeates the organization.  

2. Focus on the right training

Training and re-training represent the easiest ways to teach employees about compliance. Yet leaders may struggle to strike the right balance between providing enough teachable training and requiring too much—which can cause information overload and lower retention. Make it your ultimate goal to “right-size” compliance training by seeking informative, engaging courseware for employees.

Role-based training is a new, highly effective method. This targeted style of training presents only the information that directly pertains to the employee’s specific role or job function. When you eliminate superfluous or irrelevant content from the training, you simplify and accelerate regulatory training—while spending up to 30 percent less time. Improve engagement by incorporating scenario-based content, gamification and other interactive activities in the learning experience: Scenarios help employees better relate to the content. By watching pertinent examples, employees are far more likely to absorb and apply what they’ve learned. Interactivity invites the learner into the training and helps improve retention.

3. Open the doors to innovation

Product development and compliance teams make up two of the most important departments within any organization. Product development is tasked to create innovative solutions that meet the needs of consumers and stay ahead of the competition, while the compliance department ensures that the products meet regulatory standards. In many organizations, product development and compliance fail to converge until product development is underway or completed; this can result in massive delays and unnecessary frustration between the two groups. To avoid any regular disconnect between departments, leaders should encourage collaboration early on in the product ideation and development stages.

Instead of waiting to assess a product after it is built, the two departments should work together from the start. The compliance team can better understand the intent and help steer the solution in a compliant direction and address any concerns in real time. This collaboration between two distinct groups can move innovation forward as it streamlines the development and approval processes, increases efficiency and enhances overall product quality. It can also help the product go to market faster, which potentially creates competitive advantage for organizations that can strike this critical balance.

Putting it all together: From fear to forward thinking

Compliance is not something to fear or work around. Smart organizations can embrace and embed it into every area and an ideal compliance world, leaders lead by example: They accept that compliance is everyone’s responsibility. That moves them to provide efficient, effective training and encourage teams to innovate together.

This positive approach opens the door for opportunities to establish a higher trust levels within the organization and with consumers because, at its core, compliance helps financial services leaders succeed while it acts in the best interest of the customer. Once the attitude shifts from fear to responsibility, the industry can fully embrace compliance as the opportunity it actually is: Both as terms and concepts, compliance and competitive advantage stem from the same root.  

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Karl Dahlgren is managing director of BAI.

With hundreds of high-impact courses serving more than 1,700 financial services organizations, BAI’s compliance training helps reduce risk and administrative burdens while maximizing compliance budgets, creating a more focused and efficient training experience for all.