Small banks are shifting more training from the field to the Web as increased regulation has forced employees to relearn banking — and fast.
Most banks now outsource training programs to online vendors as a cheap and efficient way to teach staff about new regulations, community bankers say. Virtual training has been available for some time, but is virtually mandatory now, thanks to the volume of compliance rules, bankers say. It also provides documented results that can be shared with examiners.
"The regulators will come in and see who took what online courses," says Bennett Brown, president of American Enterprise Bank of Florida in Jacksonville. "If somebody only took two out of 10 courses, they'll note that and if there are too many like that, they'll write us up."
Beyond regulatory pitfalls, many smaller banks are finding they don't have the time or the money to train all of their staff, especially in new regulations.
"Topics are so varied and cover so many different things … I don't know how a bank would do this on its own," says Rodney Rushing, executive vice president and head of the correspondent unit at ServisFirst Bank in Birmingham, Ala. "This year, I have completed 20 courses" largely related to laws like the Truth in Lending Act.
"More and more financial institutions are running leaner on staff so [virtual training programs] allow them to run a more effective training program with fewer people," says Robin Crawford, chief operating officer at BVS Performance Systems.
BVS has more than 250 online courses for bankers and board members ranging from compliance to sales and social media training. Banks can install the software, typically as part of a three-year contract, and customize it to specific products and services.
Other companies, including Digital University, Wolters Kluwer Financial & Compliances Services, as well as the American Bankers Association, were commonly cited as providers of virtual training.
American Enterprise pays about $2,800 a year to provide 50 employees with access to Digital University's software offering. Some other vendors quoted the bank prices that were three times higher, American Enterprise executives said.
The online options have come in handy for banks like Tompkins Financial Corp., which did not have a formal preparatory program for bankers going into management. Courses include instruction on how to say "no" to colleagues and clients.
"We notice there were folks being promoted into positions who were not necessarily prepared," says Laura Geary, learning and development manager at Tompkins in Ithaca, NY. The $3.5 billion-asset company requires employees to take at least five courses a quarter.
"A lot of training happened when they received the position but we wanted to shift that focus into preparing them," she says.
But there are some downsides to virtual training. Some bankers argue in-person training is more engaging and helps trainees to retain material. Online tests can often be taken multiple times, allowing bankers to bypass the reading section and take the test until they pass.
Because of this, many bankers say they or the regulators internally ruled no one could take a test more than three or five times.
Software training companies have also upgraded systems to prevent bankers from breezing through training online. Managers can get a daily report on who has taken which tests, how many times and their scores.
Still, many bankers say they lack the time or resources to do in-house training programs like veteran CEOs recall from decades ago.
"I don't know any bank with a formal officer training program like we use to have," says Brown.
Brown started his banking career at the Office of the Comptroller of the Currency 42 years ago.
"We did it the old-fashioned way. We sat down, got out the physical manual, read it and highlighted it," Brown says. The rest, he says, was learned in the field.
Hands-on learning remains essential to being a qualified experienced banker, argues Rod Taylor, an executive recruiter for banks.
"The development of a sixth sense makes a big difference," Taylor says. "What's costing the industry is a shortage of credit skills that can only come through a minimum of 20 years'" experience.
Still, most bankers say the key is to have a combination of outsourced and internal training. For example, American Enterprise has an online software program in addition to having a consultant from ICI Consulting audit the bank's compliance standards and visit staff quarterly to provide supplementary training.
Through virtual training, "we can get to a lot of people easier … but for those complex pieces, we're following it up in-person," Geary says. "We know that learning online cannot always be a stand-alone."