TR
By Keith e. Monson, CrCM
AINING ROOM
To Monitor or Not to Monitor?
It is iMPortAnt thAt A FinAnCiAL institution demonstrate its commitment to and investment in its employees’ ongoing education and career development. After all, the cost of compliance violations— whether in monetary penalties or reputation risk—is great. the content of the compliance training courses is obviously important, but so are
continuous monitoring and tracking of the program’s effectiveness. After
all, how can a bank manage what it cannot monitor?
To develop an effective compliance
training program, a bank must first
have the support of senior management. To foster such support and
establish a program with teeth, responsibility for compliance—and the consequences of noncompliance—should
be written into every employee’s job
description. Ongoing training is a
means of guaranteeing that employees
understand those responsibilities. Developing and implementing reports on
training attendance and outcomes ensures an effective program with built-in monitoring and accountability.
To monitor the training program,
the bank’s compliance officer must
have a training plan. The plan usually
comes in the form of a compliance
Tips from the Trainer
➧ Include a compliance accountability statement within
every employee’s job description.
➧ Incorporate a compliance “training program” with like
training programs for different business units within the
same month.
➧ Develop and implement an “overdue report” showing
responsible executive managers. Provide to the Board.
➧ Develop and implement a “performance report” allowing
compliance officers and business unit managers the
ability to monitor training.
➧ Manage what you monitor … depending on the results
recognized; can include in annual risk assessment or
increase internal monitoring.
training schedule, which is most effective if applied uniformly across all lines
of business. Whether the bank utilizes
an in-house trainer or computer-based
training, a successful program will
schedule all business units’ training on
a particular rule or regulation within
the same month.
Because employee job functions
and responsibilities vary, it can be
difficult to create a one-size-fits-all
training regimen. Consider the Bank
Secrecy Act (BSA): the content of BSA
training for loan officers will differ
from that provided to personal bankers. Regardless of the differences in
content, it will be easier to track which
employees have not yet completed the
required courses if all BSA training is
due at the same time for all employees
(see Figure 1). Making similar training
courses on rules and regulations due
within the same month simplifies the
in-house trainer’s work and makes it
easier to track and manage overdue
training.
Why is this important? It allows the
compliance officer to tell at a glance
who has or has not completed the
required training. When scheduled
training is missed, the officer can
prepare a “training overdue report”
(see Figure 2) to present to senior
management and the bank’s board of
directors. This approach, which is most
effective if each senior executive is held
responsible for his or her business unit
and its employees, gives the program
teeth by making senior executives accountable to the board for employee
training.
If, for example, an internal audit
shows that the bank has violated or
been cited for exceptions to a rule or
regulation, and auditing workpapers
indicate that the majority of the violations were made by a certain employee
or branch, the compliance officer can
refer to the training overdue report to
determine whether the individuals involved completed the relevant training.
If they didn’t, the lack of commitment
demonstrated is cause to report them
to the human resources department
for disciplinary action.
If the bank requires employees to
pass a standardized quiz or exam after
completing in-house or computer-based training programs, the test results should also be tracked and a
“training performance report” (see
figure 3) developed and presented to
senior management, though not to
the board. (It is not necessary to report everything to the board—that’s
why financial institutions have senior
management.) Managers should refer
to employees’ test scores to ensure
that they retain an appropriate understanding of job-specific rules and
regulations. Management should also
provide the necessary tools and assistance to help employees pass the
required tests.
The training performance report is
useful not only to senior management,
but also to the compliance officer.
The information it contains will be
useful if, as in the earlier example, an
internal audit shows that the bank has
violated or been cited for exceptions
to a rule or regulation, and auditing
workpapers indicate that the majority
of violations were made by a certain
