Pub. 5 2017 Issue 1

www.uba.org 10 COMPLIANCE CORNER COMPLIANCE TODAY STATE-OF-THE-ART TESTING PLATFORM HELPS BANKS ASSESS THEIR EMPLOYEES’ TRAINING NEEDS By Jackson Hataway, Ph.D. A big part of running a successful bank is knowing what you know—and knowing what you don’t know. This is true for any business that builds its business model on managing risk and uncertainty. And in an environment defined by complex regulatory structures, the effects of not realizing what you don’t know can quick- ly outpace the value of what you do know. In many banks, that can look like frontline representatives not fully understanding when to file a Suspicious Activity Report, processors failing to issue disclosures in the appropriate timeframes or lenders giving borrowers inaccurate information. The examples are endless, and none of them come from having bad intentions. Instead, they all come from placing too much faith in saying, “We’ve trained our people,” and they can all have serious consequences for the bank. That’s why thorough and valid testing has to be a critical element of every financial institution’s compliance efforts. Traditionally, banks approach compliance training in a straightfor- ward way: train and test, train and test. The problem with that model is that it’s always connected directly to the training that is offered (it is never independent) and it doesn’t provide a consistent gauge of how well bank employees actually understand and implement regulatory requirements. In other words, we rarely know if what we’re teaching them lasts beyond the 30-minute compliance training – until we see the down- the-line effects of a misstep with regulators. Ever wondered how great it would be to get a baseline knowledge assessment of your bank’s compliance awareness? The Utah Bankers Association, in partnership with a Eugene-based company with a high-tech Seattle office, may have the answer. Utah Bankers Association takes the lead Executives from 28 state bankers associations have been tackling this problem and looking for solutions for the past couple of years. The SBAs approached Randy Harrington, Ph.D., owner of Eugene, Oregon-based Extreme Arts and Sciences. They discussed a part- nership with his company, wherein his company would develop the platform and the SBAs would create the content. The SBAs took their idea to representatives of the FDIC and OCC, and their response was positive. “They all liked the idea.” The 28 state bankers associations, and the executives invested the necessary funds to do a feasibility study. The associations are all now on board as part owners of the new company. The SBAs, with the assistance of former regulators and compliance attorneys, set out to create the test questions. Pioneering the platform The end result is the banking industry’s first Testing Management System (TMS)—called Compliance Today. The web-based platform offers bankers a revolutionary method for managing the compliance knowledge of their workforce in today’s digital age. Harrington is no newcomer to the financial services industry. A highly sought-after strategic planner, he has spent the last 15 years working with banks across the nation to help them find ways to sustain growth.