Creating a Culture of Compliance

As the number of banking industry laws and regulations has multiplied over the last decade, it has created a significant financial burden, causing bankers to think about compliance in a completely different way.   The lessons learned from this historically tough legal environment make one thing abundantly clear: without a culture of compliance initiated and practiced across the entire enterprise, and the technology in place to support it, financial institutions take on considerable levels of risk.

Every institution provides some level of training to employees, but a culture of compliance goes beyond once-a-year, mandated training session. It embeds compliance into everyday workflow and sets the foundation and expectations for individual behavior across an organization. Collaboration and internal networking systems help to create a unified -- and ultimately, more compliant -- bank. If the interconnectedness of modern communications channels like social media has taught us anything, it’s that information is most effective when it is allowed to move instantly and effortlessly. The simple act of connecting people and their ideas in well-designed environment can be a meaningful business driver for banks.

Successfully engineering a culture of compliance throughout an organization is primarily centered on two concepts: 1) Sustaining employee training; and 2) implementing support technology that is flexible enough to account for future legal changes, regardless of timing, context or requirements.

Connect the Dots

A true culture of compliance is one that extends into every business function, involves every employee and as such, is a tangible process that a bank must intentionally implement. It must no longer remain the sole responsibility of specific compliance staff, but should be part of the entire organization’s culture. To be effective, however, a bank’s compliance initiatives should not be intrusive, but woven into the structure of the bank’s processes as a whole.

Open and efficient communication across the enterprise is paramount in building, and maintaining, compliant employees, systems and processes. Many banks take the first step towards achieving regulatory compliance by establishing training methodologies that reinforce this culture of connectedness and preparedness by providing every employee with direct access to the information they need, such as the most current policies and procedures, at the click of a mouse.

Web-based intranets and employee portals are proven hubs of an optimal training program. Modern versions of this technology make it possible to customize courses, use real-time reporting for audits and live track employee checklists/onboarding/training progress. All of a bank’s forms, brochures, documents and procedures are maintained in a centralized location, making it simple for employees and directors to find and use the information on a daily basis.

This sort of functionality enables employee action and encourages sharing of the most up-to-date and current information. As such, banks are better able to respond to changing regulations and ensure proper delivery of updated information to all employees.

Equip Your Toolbox

Increasingly, the tools that bankers use for compliance are becoming as important as the policies they implement. If a bank leverages a training portal or intranet, it has a resource in place that can easily distribute news and information across the entire institution – to every branch, in every city and in front of each employee. Every piece of information can be kept in an historical archive for auditing and compliance needs, with a revision control system to track changes and editing. Employees and administrators benefit from a faster, easier and a more secure way to manage and deliver sensitive material.

Comprehensive security features included in modern bank intranets allow administrators to create access permissions to retain control, since only certain employees should have complete, unfettered access. Advanced security encourages personalization of the intranet experience, with total customization of the content and information each employee will have access to.

Institutions can utilize an employee portal to position themselves ahead of the compliance curve by requiring employees to review a policy or conduct a training exercise before resuming work. As a result, this unified approach for archiving and presenting information to auditors makes these regulatory audits less pressurized and run more smoothly.

By linking disparate systems, there is an inherent cost benefit to be realized. Using technology (such as intranets and employee portals) reduces the reliance on other resources and cuts down on the use of paper, time and mail delivery services.

In particular, the decrease in time spent by employees searching through documents or duplicating efforts represents a quantifiable cost savings. Simply navigating shared drives or networks adds roughly 20 minutes per day to an employee’s workload. Even for community financial institutions, the amount of money lost in inefficient work processes can be substantial – up to $150,000 per year for a bank with 150 employees according to our research.

For many banks, translating the broader risk management framework to a centralized and fundamental process can be daunting. Many still struggle with primary control issues such as compliance literacy, accountability, performance incentives and risk culture. Creating a clear link to the bank’s overarching compliance protocol and implementing the right technology backbone that supports their initiatives can create the cultural and structural changes needed to compete in a new time and a new era of compliance.

Mark Anderson is CEO of Johnson City, Tenn.-based Banc Intranets, a leading provider of secure, web-based intranets and directors portals for financial institutions that centralize employee onboarding and training, streamlining day-to-day operations.