Ensuring compliance in financial institutions requires a concerted effort on many fronts, from communication and training to organizing and measuring efforts.
1. Clearly communicate changes or revisions
Assuming you already have written compliance policies to address these crucial banking issues, communicating any policy changes or revisions marks a solid first step towards compliance.
Employees need to not only know that a policy or procedure has changed – they need to know exactly what changed. At a quick glance, they should be able to easily see what specifically has changed, when it changed, and when the new policy goes into effect.
It is not enough to simply update a company handbook with policy revisions and check that compliance box. Instead, to ensure compliance, you need to communicate these changes to employees so they know how it impacts their day-to-day jobs.
2. Make policies accessible from a central policy management system
Gone are the days of printing out all your policies and procedures and sticking them in huge binders to sit on shelves in every department. And relying on emails or shared drives to distribute compliance policy changes pose their own challenges.
How can you ensure employees even read the email or saved the most current policy version? How can they quickly even find a policy if it’s buried in a huge file directory filled with inconsistent naming conventions?
The sheer volume and complexity of banking regulations, along with the frequency in which they change, require a more modern approach.
With a policy management solution, like PowerDMS, you can provide one central repository for all policies where employees can search for and find the information they need quickly and easily.
This gives them confidence in knowing exactly where to look for the right information. Plus, a good policy management system gives your institution confidence that employees are always accessing the most up-to-date version of each policy.
Another benefit? It saves an enormous amount of time and energy by automating many of the compliance tasks that were previously handled manually.
3. Have employees sign individual policies and updates
To ensure better bank compliance, require your employees to electronically sign each policy annually, including each new version of the policy when you release it. This accomplishes two things.
First, it gives employees an additional level of accountability to follow that policy.
Second, it adds another layer of protection for your institution (from a risk management perspective) since you can now prove that every employee acknowledged the policy.
Therefore, if employees don’t adhere to the policy and something happens, you can prove, via a digital audit trail, that you gave employees the information they needed to properly comply.
4. Provide compliance training
The best way to reinforce compliance policies and procedures? Tie your staff training directly to your compliance policies and procedures so employees know specifically how to comply. Your training and policies should work hand-in-hand, with one feeding off the other.
Rather than providing training in a vacuum with general compliance guidelines, your training should support the specific provisions of the policy and walk through the different procedural steps.
To check employees’ level of understanding, give them quizzes on the content, hold mock drills of specific compliance-related scenarios, and schedule practice runs to watch employees in action.
When it comes to bank compliance, training and policies should all work together – especially in those areas that could cost the most in terms of fines or settlements down the road.
5. Create a culture of compliance
Compliance policies should play a key (but not solitary) role in creating a culture of compliance and ethics in your financial institution. Operating with transparency, ethics, and integrity is the hallmark of a high-functioning, well-managed company.
If you adopt a winning-at-all-costs operational approach (seeing just how close you get to that regulatory line), you are setting a risky tone that will seep through your institution from top to bottom. In this what-can-we-get-away-with scenario, it is much more likely that employees will misstep and cost you in the end.
On the contrary, if you establish a culture of integrity and set expectations that employees will not be cutting corners or skirting the edge of compliance, you set the bar high for how employees should behave.
Further, if you drive home the message that you will handle compliance issues swiftly and fairly, you establish the importance of regulatory compliance within your institution. For more information on regulatory compliance across industries, check out our article here.
To achieve a more robust bank compliance program, you should start with your institution’s policies and procedures to lay a solid foundation. Then, layer upon layer, build a culture of ethics and integrity that clearly communicates how to apply these values to their day-to-day jobs. This underscores the important of making compliance a part of everyone’s job.
