Pub. 6 2016-2017 Issue 6

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S May • June 2017 11 FEATURE ARTICLE JACKSON HATAWAY. PHD EXTREME ARTS AND SCIENCES Compliance Today State-of-the-art testing platform helps banks assess their employees’ training needs 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 quickly 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 givingborrowers inaccu- rate information. The examples are endless, and none of themcome fromhaving bad intentions. Instead, theyall come fromplacing toomuch 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 ina straightforwardway: trainand test, train and test. The problem with that model is that it’s always connecteddirectly 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 im- plement 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 Colorado Bankers Association, in part- nership with a Eugene-based company with a high-tech Seattle office, may have the answer. CBA, others take the lead Twenty-eight state bankers association ex- ecutives have been tackling this problem and looking for solutions for thepast couple of years. The SBAs approached Randy Harrington, Ph.D., owner of Eugene, Oregon-basedExtreme Arts and Sciences. They discussed a partner- ship with his company, wherein his company woulddevelop theplatformand theSBAswould 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 28 state bankers associa- tions are all now on board as part owners of the new company. The SBAs, with the assistance of former regulators andcompliance attorneys, set out to create the test questions. By aligning your banks’ insights into employee knowledge with federal regulation standards, banks will be able to rest easy knowing that their talent is operating under federal guidelines with the customers’ best interests at the top of mind.