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Posted by Julie Delazyn
Quizzes, tests and surveys are important tools for helping financial services organizations with risk mitigation – a key component of their success. Such assessments provide a cost-effective way to confirm and document mandatory regulatory training. They help ensure that employees understand their roles and what is required of them to meet regulatory and business needs. What’s more, compliance-related assessments also do a lot to improve performance – making for happier customers and employees.
Our white paper, The Role of Assessments in Mitigating Risk for Financial Services Organizations, offers best practices for implementing a legally defensible assessment program. It explains why many large companies regard online assessments as a crucial to their compliance programs. It also describes how compliance-related assessments can bring peace of mind and tremendous business value.
Here are just a few business advantages of effective assessments:white-paper-cover1-300x244.png
They help meet explicit or implicit legal requirements — The most compelling reason for assessments is that they are legally required! As the US FDIC says: “Once personnel have been trained on a particular subject, a compliance officer should periodically assess employees on their knowledge and comprehension of the subject matter”. Some regulators require you to ensure your employees are “competent.” Assessments aligned with a formal competency model are a strong way to demonstrate competence against such principles and reduce regulatory risk.
They demonstrate commitment to complying with laws — Requiring all employees, including managers, to take a test on the laws and regulations is an important signal of top management’s commitment to following the laws. In some jurisdictions, should an employee break the rules, having a strong compliance policy can prove the employee acted alone.
They conclusively and cost-effectively document that training has taken place — Many regulators and laws require you to document that people have been through training. Passing a test is clear evidence of attending and understanding training – and probably the least expensive and most conclusive way of proving this.
They give early warning of problems  — Assessments are one of the few ways of contacting and getting input from your entire workforce. If they are prepared well and analyzed effectively, the results can tell you of potential problems in time to act and resolve them before they cause pain: they let you see into the future.
They harness training required by compliance to give business advantage — Successful companies in financial services often see compliance training as an opportunity for business advantage. Financial services are a people business; if you are training your people for compliance purposes, you can also take the opportunity of training for business value and customer service.
They reduce cost and time spent in unnecessary training — If an employee already knows something well, then training him or her in it is a waste of resources and motivation. Diagnostic tests offer a way of identifying what employees know, allowing employees to “test out” of training they do not need to take.
They ensure that partners and brokers understand your products — Many financial services organizations work with brokers, advisers or other third-party partners. In some jurisdictions, your company is liable if these products or services are mis-sold, and in all jurisdictions you will want these partners to be capable and successful with your products.
They reduce forgetting among your employees — People quickly forget material after learning it. Giving assessments after a training session gives participants a chance to practice retrieval of the learning and significantly increases long-term retention.
The figure below shows results from a cognitive psychology peer-reviewed paper: One group of people studied material and the other group spent the same amount of time studying and being tested. After 5 minutes, there was little difference between how much they knew, but a week later, the group that took tests recalled significantly more (56% vs. 42%).


 (Data from Experiment 1 in Roediger, H. L., III, & Karpicke, J. D. (2006b). Test-enhanced learning: Taking memory tests improves long-term retention. Psychological Science, 17, 249-255.  )

Click here to read the paper, which you can download free after login or sign-up.