The banking industry's need for professional training has never been greater. Ditto for cutting costs. In the financial services arena, integration, restructuring and acquisitions are reshaping the playing field. Successfully competing against investment banks, brokerages, captive finance companies, insurers, and other banks means finding the most efficient and effective ways to meet customers' needs. Employees who can deal comfortably and knowledgeably with both internal and external customers, and who focus on the corporate-wide agenda, are the key. This requires on-going and revamped training for professional staff and back- office support.
Why is training more crucial now than ever before? Consider the dynamic changes taking place:
The need for a wider variety of financial services is spreading from multinational firms and money center banks to middle markets. For example, foreign exchange is important to middle market customers. Bond math-once just for sales and trading-has also become the concern of middle market lenders who package loans with other products such as derivatives.
Banks have become portfolio managers. The "brokers in every branch" must be knowledgeable if they are to provide competent and all-encompassing investment advice.
Increasing involvement in global markets requires bankers skilled in the complex and risk-laden securities of emerging markets.
Geographic expansion makes it difficult to train people in far-flung offices.
Recertification is hampered by time and geographic constraints.
Regulators need the tools to oversee all this burgeoning activity to avoid debacles such as Orange County.
CBT for the MTV Mindset
Does everyone need a trader's finesse with financial instruments? No. But a widening universe of employees-middle market managers, analysts, auditors, and back-office staff-needs familiarity with foreign exchange, debt instruments, and derivatives. And, as inventory managers in the manufacturing sector have learned, they need it "just in time." These developments don't operate in a vacuum; the trend to improving the efficiency ratio means cutting costs. The old training model-flying people in from all over the country for a multi-day seminar-is a luxury. Economic Value Added (EVA) will be employed to link training to the bottom line. Then cost-effective training will no longer be a buzzword, but a reality.
Fortunately, new technologies bring efficient, cost-effective training. Stamford, CT-based Gartner Group's Web site maintains that "technology- based, self-directed learning is fast becoming the training method of choice for successful organizations worldwide."
In the early days of computer-based training, off-the-shelf software got a bad rap. Once regarded as dull "page-turners," today's software is user- friendly and flexible. The best incorporates multimedia elements that satisfy the fast-paced, hands-on learning style of the MTV generation. It maintains interest with interactive Q&A, real-world simulations, frequent review and feedback, audio reinforcement, hypertext for cross-referencing and games.
The capability to adapt to individual needs is critical. CBT Worldwide software offers a choice of classroom or browse mode so a user can work straight through, begin at midpoint if he or she knows the basics, or choose, a la carte, specific "challenges" and advanced topics. A synopsis mode creates a "highlighter" for fast-track trainees and a refresher for veteran employees.
This flexibility is a great advantage if English is a second language. Recently, Latin American employees of an investment bank trained using CBT Worldwide's money and capital markets module. While they needed extra time to master the concepts in a second language, the employees were well- prepared and confident when they convened for an advanced seminar. For banks with global operations, investment in multi-lingual options adds more flexibility while maintaining uniformity in the training process.
To this end, new technology makes computer-based training products easier to develop and to customize to a bank's specific needs. It also enables banks to standardize learning material at all locations. The line between off-the-shelf and custom-developed software is becoming blurred. The variety of titles on the market today provides a greater opportunity for alternative training without the risk and investment of many months and many thousands of dollars to develop a program in-house.
Buy-In from Management
If technology-based training is to succeed, top management must make and enforce the commitment. Otherwise, people are busy, time is tight, and training is overlooked The learning software that is never removed from its package does not train employees any more than the exercise bike which is never ridden trims the waistline.
Middle managers must be charged not only with developing training programs but with following through. Otherwise, they pull people away to do other projects, as is the case all too often. Doing away with a classroom does not mean doing away with the time people need to learn.
Does computer-based training save financial institutions money? A senior staff development officer of a major New York bank, for example, estimates that the computer-based format of CBT Worldwide's module on interest rates reduced training time and resulted in average savings of more than $1,000 per person. On a more transaction-oriented level, First Union's computer- based training for tellers shortened training time from 10 days to one-to- three days and cut training costs by 50 percent. The trainees became so engrossed that designers had to build in commands like "take a break." The Canadian Imperial Bank of Commerce had comparable results training bankers to take credit applications. For training on any level, savings go direct to the bottom line.
Banking trends and technology have converged. Bringing people up to speed for more diverse and challenging assignments is not just a training issue. It's not a technology issue. It's a survival issue.
Dr. Philip Giles is president of CBT Worldwide, a producer of training software for the financial services industry. He is also an instructor with bank training programs and at the Columbia University Graduate School of Business.
