City workers reveal compliance training shortfall

Mar 18 2002 by Brian Amble Print This Article

According to a survey by leading financial training provider, Wide Learning, one in three City workers have not received compliance training as regulated by the Financial Services Authority (FSA) in November 2001. More surprisingly still, half of those workers do not even expect to be trained in the next six months.

In response to the new FSA requirement for ‘auditable tracking of competence’ in compliance for employees in financial services firms, many seem to be taking a low key approach as more than six out of ten of those questioned have not been formally tested on their awareness of key compliance issues.

"The results mirror feedback we’ve been getting from the coalface for some time. Even cynics must acknowledge that the survey reflects a general perception that the market is still not taking this risk seriously enough," says Alan Calder, Chief Executive Officer, at Wide Learning.

Supporting this view, Brian Hewitt, Chief Executive of the Compliance Institute, adds: "On reading the findings of the Survey, I found the content very revealing but not, in my view, unexpected. The Institute supports all training initiatives which assist Compliance people and help them to do their job properly and correctly."

Other key findings show that:

  • One in three were not aware that their organisation is regulated solely by the FSA.
  • Over half did not know when the new regulatory regime came into force.
  • One in three were not able to name their Money Laundering Reporting Officer.
Face-to-face interviews were carried out in the City of London in March with 130 financial services workers including those in management positions.

Almost half the respondents say they would tell their line managers if they had concerns about possible money laundering, rather than the FSA-preferred route of contacting the MLRO directly with well founded suspicions.

Almost three quarters claimed to know who was responsible for complying with the new rules within their organisation, yet only one quarter of those who specified an answer were aware that FSA regulations dictate that all financial services employees have some degree of individual responsibility and accountability for compliance.

Commenting on the findings Jan Hagen, Solutions Director at Wide Learning, says:

“The responses show that compliance and senior management functions need to ensure that the implications of FSMA 2000 for the individual are communicated throughout their organisations.

Most training still follows the totally inadequate route of signing a register in the classroom to state that you've been in a training session for 45 minutes. The Act states clearly that financial institutions need to show that their staff are competent and that their competency is maintained. The only way to audit competence is through testing someone's understanding, skill and behaviour. However, most institutions still find it awkward to impose compulsory testing throughout the organisation.

Only when the implications are fully recognised can compliance and HR departments start working effectively together to achieve the firm-wide competence that enables organisations to reduce operational and compliance exposures."

An original sample of 100 respondents was taken and these same findings were confirmed by an additional 30 interviews.

Of the total sample of 130, 76 were male and 54 female.

Everyone interviewed worked in financial services in the City of London. The sample was segmented into those in management positions (24%), front office (18%) or back office roles (25%) and those in administrative/secretarial jobs and/or other roles (33%).