Financial institutions are witnessing a power shift—one that sees power moving into the hands of compliance officers who are tasked with keeping the business safe, preventing firms from entering into high risk proposals and clearing the way for the right business activities. We considered this in my last post, where I noted that—because of this power shift—financial firms are facing a talent crisis, particularly around anti-money laundering (AML) staff, as well as others in the financial crimes compliance department. This includes professionals working within the Know Your Customer, investigation, and monitoring and surveillance spaces.
Financial firms can’t in my view perform without a strong talent management program to help them attract and retain skilled risk management and compliance professionals. I outlined three vital elements of that strategy, and now would like to dig a little deeper into each area:
- Human capital strategy: This is the nitty-gritty around creating AML career paths that attract, develop and retain talent. The human capital strategy should reassess the costs associated with retaining staff, as well as the costs for adding staff, when designing development and training initiatives. Performance management and reward programs should be closely aligned with overall organizational objectives to help increase productivity, motivation and engagement. These days, a succession plan is increasingly critical, so financial institutions can demonstrate “depth of bench” and sufficient governance to board directors and regulators.
- Role-based training and learning: Traditional training programs often miss opportunities for addressing discrepancies in AML learning programs available at global, regional and local levels. They don’t always address the challenges modern AML officers are facing in term of skillset, institutional knowledge and business knowledge. A good learning program is essential in my opinion—and it is also an excellent tool for retaining talent. Some of the key things to consider are:
- Providing AML compliance training to all employees, and offering tailor-made training content for different roles. For example, training for senior management would vary from training for front office staff.
- Using an effective and comprehensive onboarding/orientation training program to build a smarter workforce faster, helping to reduce time to competency and getting professionals to learn internal policies and procedures.
- Using on the job cross training to increase job satisfaction.
- Designing training content to be more practical and relevant to the audience’s roles and responsibilities.
- Cultivating designated trainers with subject matter knowledge, who are also regularly trained to keep up with the latest regulatory updates and new internal requirements.
- Reviewing existing training effectiveness: Often overlooked, this area is essential to the overall performance of a talent management program. Financial institutions should conduct ongoing assessment of recruiting, performance management, training and compensation. Increasingly, technical enablement (through innovations such as telepresence, webcams, and virtual learning) can help promote flexibility and cost savings. Additionally, implementing an effective and consistent approach to AML compliance training across all functional roles should help reduce the risk of human errors and instill a strong AML compliance culture throughout the entire organization.
In sum, the people agenda should be front and center of the AML program. There are many things financial institutions can do by empowering their talent pool through better training, through strong career development and by simply promoting a “people culture.”