Today, compliance is becoming increasingly critical for any FinTech company, and organisations must adhere to many rules and regulations. While factoring in that FinTech organisations have their own set of internal policies, the compliance environment gets even more complicated.
Employees and management of any firm must know the specific laws, rules, and policies and apply them. This is crucial in light of the penalties that a corporation might use if not complying.
This is when good compliance training comes in handy. It provides employees and management with the legal and regulatory knowledge and awareness to comply. Companies can also ensure that their personnel are always updated with an ever- changing regulatory landscape by implementing a proper compliance training approach.
Defining Compliance -
Complying with a wish, demand, request, or regimen, for example, could be defined as the act or process of doing so.
Conformity in meeting governmental criteria could be another definition of compliance. Finally, compliance is described as following specified corporate rules, standards, regulations, or policies.
Compliance is an essential component of an organisation, no matter what definition is used. This is not just because one must adhere to specific regulations and legislation but also because the employees must adhere to the company's internal policies. While dealing with compliance in any firm, there are two key focus areas:
Regulatory adherence -
This type of compliance is concerned with how the business adheres to numerous laws, regulations, and guidelines. Specific pieces of legislation such as the Anti-Money Laundering and Counter-Terrorist Financing Act, GDPR, Market Abuse Regulation, PSD2, MiFID II, and MiFIR could mention a few be included.
Compliance in the workplace -
This form of compliance ensures that all the employees follow the company's internal policies, processes, and guidelines while adhering to the regulations above. It must be ensured that regulatory and business compliance procedures and practices are in place else the company could face the consequences such as fines or legal action, which could lead to prosecution and/or the closing of the company.
What is the purpose of compliance training?
Compliance training, in basic terms, is the process of ensuring that all the employees and managers are aware of the critical legislation, rules, and internal policies that the firm must follow. As a result, compliance training teaches staff about various pieces of law, regulations, and rules and how and why they must follow them.
Employees and management typically require compliance training on the following aspects based on the areas of compliance that need to focused on:
- The laws and regulations that apply
- Procedures and policies in the workplace
- The code of conduct for your company
- Data privacy and security
- Detection and prevention of fraud
- Anti-money laundering and counter-terrorist financing are two issues that need to be addressed.
- Anti-bribery
- Ethics in the workplace
- Discrimination in the workplace
- Harassment of women
- Regulations governing workplace safety
- Violence in the workplace
- Management of risks
- Substance abuse in the workplace
- In the workplace, there should be diversity and inclusion
Employees and managers aware of these have a better understanding of their roles and duties, and compliance training allows them to perform more efficiently. They'll also know how to respond to specific scenarios that emerge in everyday business. As a result, the firm as a whole becomes more productive and efficient.
However, it is essential to remember that compliance training is distinct from other forms of activity that may be provided to the staff. As a result, unlike training on a specific platform or software product that focuses just on that area, compliance training encompasses all of the above elements.
Due to the ever-changing legal landscape, compliance training should be a continuous effort to keep your employees and managers up to date on pieces of legislation and regulations, how they must comply with them, and the consequences if they do not.
The Advantages of Compliance Training:
There are various advantages to having adequate compliance training protocols in place for any company. For starters, when the compliance training contains the exact rules and regulations that the employees must follow, as well as the procedures that they must follow to ensure compliance, one may limit the number of violations of these laws, regulations, and policies.
Given the severe non-compliance penalties for the business, one must avoid breaches as much as possible.
Creating a Compliance Training Strategy:
When building a compliance training strategy, there are typically three stages -
Gathering data and making plans -
During the first step, the business collects information on where it needs to provide compliance training to its employees. To do so, they usually look at data from prior breaches, any vulnerabilities the firm may have that enhance the risk, and similar violations in the industry. The compliance department or chief compliance officer can build a compliance training strategy based on this information. As a result, the business should identify the places where mandatory compliance training sessions are required, as well as those where they are not. The compliance training sessions will, after that, be done according to this plan.
Implementation -
After completing the above planning, the training moves on to the next phase, implementation. It is vital to define how the compliance training will be provided while developing the plan. For example, this could be done through presentations, workshops, or practical sessions. Employees could be given access to the materials via an internal e-course as part of the implementation. It's also critical to gather information about the training at this period. As a result, this data could include attendance, employee feedback, or how well employees grasp and apply the ideas.
Success Evaluation -
It is vital to evaluate the training's success during the last step of a compliance training plan. To do so, the company needs to look at the data acquired throughout the implementation's second step. To determine whether the training was helpful, one needs to look at how the company's compliance improved. Based on this information, changes can be made to the training plan to make it more successful as the first phase restarts. Compliance is a continuous process, and companies usually go through it again and again.
How to Make Compliance Training More Effective?
It's essential to build a compliance culture in the organisation to ensure adequate compliance. Once the employees are aware of what is expected of them, they will make it their mission to ensure that everyone else follows the laws, regulations, and policies.
One of the most effective methods is to include management in the training sessions is to ensure the management leads the staff and attends training sessions and follows directions with them. As a result, the training activities will be more successful and productive.
Keep it brief -
The applicable laws and regulations and compliance, can be complicated. There is usually a lot of information to process. Rather than holding lengthy training sessions, it is considerably better to keep them brief and focus on applying the laws and regulations.
This avoids information overload and ensures that the staff retains the material presented during the training session.
Make training materials easier to understand -
Making training materials clearer and more relevant is another approach to make it easier for employees to understand the subject. This is especially critical if the company supplies self-study materials to the team. If the employees are provided with simple study materials to read and comprehend, they will be better able to absorb the concepts.
The resources need to be are current and relevant. It's pointless to provide training on laws and regulations no longer in effect.
Employee Segmentation -
While all employees should be knowledgeable about all aspects of compliance, it is common for some employees to know more than others. This could happen, for example, if one hires a new employee from another company or industry who is unfamiliar with the relevant laws, regulations, and internal policies.
Similarly, some employees may not need to be aware of some aspects of your compliance practices. As a result, segmenting the staff depending on what they need to know and how well they understand the company’s compliance needs makes sense.
This ensures that information isn't given to employees who already have it and avoids a situation in which someone with minimal knowledge of compliance is present during a training session where complex issues are covered.
By segmenting the staff depending on their knowledge and grasp of compliance principles, one may improve the effectiveness of the compliance training.
Face-to-Face Meetings -
Employees with difficulties learning or comprehending the principles may benefit from face-to-face training sessions in addition to the segmentation as mentioned above, depending on their knowledge and understanding. Face-to-face encounters can increase engagement and ensure that the information is presented efficiently.
Motivation -
Employees will only benefit from the compliance training programme if they attend the meetings and study the materials. And it's typically a delicate balancing act. As a result, it may help to make the training sessions mandatory, with different methods of motivation like awards or certificates of participation.
Email Marketing Techniques -
Using e-mail to communicate regular updates, training materials, and compliance news to the staff is a simple method to improve training and compliance. E-mail can be a powerful tool in continuous compliance training initiatives.
Any business must follow all applicable laws, regulations, and internal policies else it may result in severe penalties and fines, which might be disastrous. This fact underscores the importance of effective compliance training methodologies and processes. To put it another way, it must be guaranteed that the organisation has effective training programmes in place to ensure that their staff follow all applicable laws, rules, and policies.
