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#Anti Money Laundering #Customer Due Diligence #Cyber Security #Financial Crime Prevention #Governance, Risk and Compliance

Why education and training is so important for the financial services sector

International Compliance Association

education , financial services , training

After 40 years teaching and training in universities and professional bodies, I was recently asked a question by a student about how, after so much time, it was possible to maintain keenness and enthusiasm about the subject matter of the class.

What immediately sprang to mind was a statement from the Scottish American tycoon and educational philanthropist, Andrew Carnegie:

‘Men and women, not machines, are the real source of profits in any business.
Take away my factories, my plants, take away my railroad, my ships, my transportation, take away my money, strip me of all these – but leave me my men and women and in two or three years, I will have them all again.’

This is an ethos embedded in the educational culture of the teams of lecturers, tutors and trainers with whom I have worked over many years in the legal, trust, estates and compliance fields. Investment in the education, training and development of your staff will reap rewards in business terms in future years.

The merits of investment in a strong education and training infrastructure, and in people, are indisputable. Despite this, in times of economic stringency with budget constraints and cuts, this message often gets lost in the drive to short-term bottom-line gains. Senior management and boards need to keep this in mind when making decisions.

Firms in the financial services sector have a strong track record, over the last decade, of investing in their personnel, but there is evidence that the current economic reality is undermining this strategy.  While cuts in training budgets are understandable, they are clearly misguided for the future well-being of those firms and the finance industry overall when we consider the potential of the emerging financial services centres in Asia and the Middle East.

Cost Benefit Analysis

Training and education are enablers and through investment they can be a significant contributor to the bottom line of an organisation. A well-trained and focused workforce helps to achieve competitive advantage in that it:

  • facilitates the reduction of errors in business, thereby reducing operating costs, which in turn leads to improved customer retention
  • increases speed of identifying and bringing new products and services to the market
  • enhances the reputation of the firm, increasing the volume of new clients and creating the opportunity for premium pricing
  • assists in building a strong relationship with the regulator(s), helps to reduce regulatory interference and allows the organisation to adapt more quickly to regulatory change
  • reduces the amount of senior management time needed on issue resolution
  • reduces staff turnover; staff feel motivated and valued
  • facilitates the reduction of spending on external counsel and consultants.

The challenge for organisations is that initially these clearly measurable benefits have to be funded . It is, however, a false economy to cut training and education of the workforce to achieve short-term bottom-line gains.

Quality Issues

It is easy to pay lip service to training needs without truly determining whether the training is ‘appropriate’ or ‘effective’. The plethora of generic online CBT programmes that are used by some firms to ‘tick the box’ for regulatory purposes are evidence of that. Training needs will vary from organisation to organisation, but most firms will include the following factors in their ideal training strategy:

  • focused, practical, job-related, skills and competence-based training at a range of levels
  • bench-marked, industry-recognised qualifications
  • certificated leading to recognised qualifications
  • part of a credit-rated and modular structure
  • competence assessments
  • CPD and refresher training
  • global recognition, allowing mobility of staff from jurisdiction to jurisdiction
  • cross-border relevance and applicability (with both local and international content)
  • customised, in appropriate areas, to the individual firm or organisation.

It is generally recognised that the most effective form of training or education is via face-to-face tuition by qualified and experienced professionals. This is not always available, feasible or affordable and so a range of alternative methods have been developed by training service providers in many areas of the world.

Find out more about ICA qualifications in AML, compliance and financial crime prevention here


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