The Importance Of Compliance Training For Banks
Compliance training has assumed a special importance for all organizations now. However, sometimes, there is a need to outsource it because in-house teams aren’t qualified to develop it. Moreover, there is always a need for ongoing compliance training because the rules are always changing. Companies that have compliance training as a one-time process may not be able to follow procedures. But how do you select the right eLearning vendor for compliance training? The regulatory environment is quite challenging. For example, for banks, there is always a change in compliance laws.
The Shifting Landscape Of Compliance Training For Banks: Recent Changes In Banking Laws
For example, in the U.S., as per the Consumer Financial Protection Bureau (CFPB) Act, open banking will be adopted. This means that banks will have to get permission from customers before sharing their data with third-party service providers, such as insurance companies and loan providers.
This rule has already been enacted in the European Union, where banks can’t share the consumer’s financial data with third-party providers without their consent, as per the Revised Payment Services Directive (PSD2). With open banking, it will depend on the discretion of consumers on what data will be shared with third-party providers. Providers use such data to recommend financial services to consumers, such as comparisons between loans and investment propositions.
-
Changes In Late Credit Card Payment
Moreover, the banking employees must be trained to know what credit card fees are imposed by the bank. The banks cannot also charge late credit card payment fees of more than $8 to consumers. This new rule came into existence in May 2024 through CFPB. Previously, the fee for the late credit card payment was $41. These new rules will ensure that consumers don’t pay any hefty fees due to late payments on credit cards.
The Dangers Of Noncompliance And The Need For Compliance Training For Banks
Any mistake by the banking employees and the bank lands in troubled waters. Banks have to take care of noncompliance, otherwise, they have to pay huge fines of up to several million dollars. Recently, in 2016, Citibank had to pay a fine of $8 million due to a lack of proper controls. It’s because when such controls are not implemented, the banking consumer can suffer. The CFPB fined Citibank $8 million because it had sold credit cards to debt buyers at heightened interest rates of 4.9% where the interest rate was just 0%. Debt buyers can be collection agencies or debt collectors who collect the debt the original creditor can’t collect themselves.
Therefore, the debt buyers had collected $4.9 million extra from consumers. Citibank had to reimburse $4.9 million to consumers that the debt buyers had collected from them. In addition, Citibank had to pay $3.0 million as civil penalty fees to CPFB.
How Can eLearning Vendors Help?
1. Localized Training
Preparing the material for compliance training is a complex process because of the diverse needs of the employees; due to their different language requirements, localizing the training is necessary.
2. Better Documentation
Also, the entire compliance training program needs to be documented in terms of the employees who have completed the course. This information can be obtained from the LMS; hence, an administrator for this software is required. When an LMS is implemented in the bank for this purpose, the company accrues a lot of benefits because it can get all the insights into an employee’s performance necessary for compliance audits. eLearning is a better method—as compared to the conventional method of classroom training—because of its higher retention rates.
3. Correct Information By Subject Matter Experts
When you have professional eLearning vendors on your side, you have the advantage that they provide the correct information in your compliance training module because they have SMEs. So, you don’t suffer from a risk of noncompliance due to wrong information.
Due to the lack of SMEs on specific subjects, it’s tough for companies to develop training internally. However, when such training is outsourced, it can prove to be less costly. This is true for small-sized companies that can’t afford to hire SMEs and Instructional Designers. When an eLearning vendor is hired, no wrong information is presented to the audience. A lack of correct information in the eLearning module can adversely affect an organization’s reputation.
4. Standardized Training
When compliance training is outsourced, it means all employees benefit from standardized training and follow all the rules. Outsourcing means getting content prepared for all forms of training delivery, such as webinars and VILT. With so much flexibility, an organization can deliver training easily to its employees.
Creativ Technologies
We provide niche elearning solutions to corporate clients. Our company also provides LMS administration services. We are experts in Blended Learning, Mobile Learning and Web Based Training
