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Looming Legislation, Scaling Change Management Efforts & Embracing AI: Key Themes From ABA’s 2024 Risk & Compliance Conference  

The Qstream team attended the American Bankers Association’s (ABA) Risk and Compliance Conference in Seattle last week. With a growing presence in the banking and insurance industries, we saw the event as a great opportunity to learn more about the challenges of those we serve and network with industry leaders – and that it most certainly was! The ABA orchestrated a wonderful event that brought compliance and risk folks together for a week of informative sessions, mingling with peers and better understanding the technology solutions available on the market to enhance their organization’s efforts.

We had extremely insightful conversations with those who stopped by the Qstream booth. One thing we noticed right away was how passionate the attendees are about their line of work. They understood the important role that effective training plays in creating a culture of compliance and mitigating risk to the business. Most recognize that the old ways of educating employees – long LMS courses and in-person training events – simply check the box and do not promote, let alone properly measure, long-term compliance. A more modern approach, such as microlearning, keeps employees on the floor and promotes knowledge retention of material the human brain is likely to forget after a one-time training session. 

In the spirit of not giving it all away in the intro, let’s dive into our key takeaways – a mix of challenges and exciting opportunities within the banking risk and compliance space.

Pending Legislation & Current Government Oversight 

Updates to the Community Reinvestment Act (CRA) was the hot topic of the event. For those unfamiliar, the CRA was put in place by President Jimmy Carter in 1977 to hold banks accountable for serving all income levels of their local communities. While the act has undergone several updates over the years, recent proposed changes would serve to strengthen the act and require banks to report on their efforts. 

The challenge is that many institutions today cater to people outside of their communities due to the shift to online banking. If, or more realistically, when, this revision goes through, it would require banks to take a more proactive approach – moving to community-based models that promote financial inclusion and providing proof that they are doing so to Congress. While these regulations differ based on bank size and type, it would require changes across the organization, most notably a focus on branch banking for lower and middle class incomes, underserved, native and rural communities. 

While the provisions won’t likely go into place until January 2026, with required metrics-based reporting enacted the following year, everyone we spoke with understood the importance of getting ready to meet the new guidelines today. After all, their reputation and future growth is dependent on their ability to demonstrate adherence. CRA performance will be taken into account when analyzing applications for mergers, acquisitions and branch openings

A top-down approach is required to implement new practices across the organization. However, most agree that traditional training interventions won’t cut it. Some sort of ongoing reinforcement is required for long-term adherence and to change on-the-job behavior. Qstream, which delivers small bits of critical information to employees in the flow of work, resonated as a vehicle to continuously educate the organization about this new way of doing things and promote compliance. They also recognized that this style of training, which keeps employees productive while building new skills, could also be used to keep other regulations that exist to protect consumers, such as Unfair or Deceptive Acts or Practices (UDAP) and the Military Lending Action (MLA), top of mind. 

Moving Away From Check-The-Box Training: Diligent Compliance Reinforcement & Tracking Is Imperative

A lot of people we chatted with are looking for more innovative approaches to employee training. Most currently use some sort of Learning Management System (LMS) and traditional classroom sessions and cited low engagement as a top concern. 

Microlearning and knowledge reinforcement is ideally suited for the financial services industry, where the smallest mistake could mean big trouble for the entire organization. Sure, someone might remember a risk assessment practice three days after attending a course when the information is still fresh in their mind, but what about in weeks, months and years down the line? Science tells us this information will be forgotten unless reinforced over time. 

Qstream is built for knowledge-critical businesses. We reinforce the most important information employees need to apply in their daily work in just minutes a day and provide the necessary analytics to track true compliance. Many of our customers have uncovered knowledge gaps that need immediate attention and have been able to take steps to immediately correct them and prevent serious errors. 

The quick, simple and fun nature – points-based mobile learning and leaderboards – promote extremely high levels of engagement so you don’t need to hound employees to complete training and gain peace of mind that they are up to date on the latest compliance practices. 

Embracing AI For Efficiency & To Stay Competitive 

There’s no doubt that AI can increase business efficiencies but many are still hesitant to adopt this technology, and rightfully so. It’s new and we still need to understand the long-term implications of importing and gathering information using these models. I attended a session all about evaluating the risks of AI, where panelists discussed the steps that organizations should take to make sure they are using this exciting technology responsibly. 

They recommended implementing a top-down framework that focuses on controlling and monitoring the organization’s use of AI. They also stressed the importance of understanding how your vendors and partners are using AI since any missteps on their behalf will fall on the bank.

To facilitate this process and enjoy the many benefits of tools that are available today, banks should create a new C-suite position that focuses solely on AI. “Control what is happening or be controlled by what is happening,” said panelist Nick Baxter, Chief Risk Officer and First National Bank of Omaha. Creating a new role for this effort stresses the importance of proper use of AI and allows the organization to be proactive in controlling it. He said this function might typically be assigned to someone in IT but that this team has a slew of other responsibilities on their plate. If you go that route, you risk this effort taking the backseat and not getting the attention it deserves.

Panelist Harsh Pandya, Vice President, Product Management at Fidelity Investments offered the following areas for evaluation for AI models: Input (data governance), process (how the model is using the input), output (the accuracy and fairness of the response) and outcome (how the information collected is being utilized).

Choosing the right vendors to enhance your AI strategy is of the utmost importance and attendees expressed excitement around Qstream’s AI capabilities. Our AI Microlearning Content Generator helps teams create engaging, bite-sized training challenges in a matter of seconds. We assured them that the vendor we selected does not train their model to reuse the inputs supplied. Still, they understood the importance of not inputting sensitive information. We heard that this tool would be an excellent resource for their compliance and risk training  teams, who are responsible for keeping employees updated on an ever-evolving body of regulations and business practices.  

It’s clear that organizations would be wise to take advantage of AI — but only with the right frameworks in place. The fast-paced nature of the industry will benefit from implementing efficiencies, especially concerning employee training, and those who don’t jump on board will likely be left in the dust.

Repeatable, Scalable Change Management Is A Must 

All of the above calls for an immediate focus on changing behavior across the organization. And these changes cannot be made in a vacuum if you want to get everyone on the same page and ensure company-wide compliance. Qstream is here to help you achieve that. Our award-winning software offers an employee-centric approach that encourages participation and generates the analytics you need to mitigate risk and gain peace of mind. Change is never easy, but when the right steps are taken to meet it head on, everyone thrives. We see this every day across our customer-base. For example, Juniper Networks uses Qstream to create a transparent compliance culture. Bill Burtis, Vice President & Chief Compliance Officer, says our platform helps him “target and adapt training in real time to address potential risk trends such as matters or questions about giving business courtesies to vendors or business partners.” You can read their case study here

Thanks to everyone who stopped by the Qstream booth to chat and to ABA for creating a space for industry professionals to gain new insights, meet their peers and investigate the latest technology. It truly was a fantastic week and we can’t wait to attend next year’s event in Indianapolis. See you all there! 

Interested in partnering with Qstream to mitigate compliance risk? Schedule some time with us. 

 

The Qstream team at our ABA Risk & Compliance Conference Booth

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