Why You Need to Invest in Compliance Training

Compliance training is more than just a box-ticking exercise—it’s a critical component of business integrity and operational success. In this article, we go back to basics, explaining the purpose of compliance training and the role it plays in protecting both organisations and their customers.

What is compliance training?

Compliance training is the process of educating employees about legislation, regulation and policies that apply to their working environment. The financial services sector is governed by a number of laws, designed to protect customers from harm. Businesses operating within the sector need to abide by these laws, which means employees of those businesses need to understand the laws and the consequences of non-compliance.

The kind of compliance training that is required by an organisation depends on the type of business, its size and the customers it serves. For example, providers of financial advice operate under the Corporations Act 2001, and are licensed through the Australian Securities and Investments Commission (ASIC). Credit businesses are similarly governed by the Corporations Act and ASIC, but must also adhere to the National Consumer Credit Protection Act 2009 (National Credit Act).

It is important to remember that compliance training does not only cover sector-specific laws. Employees need to be trained in all workplace-related laws, such as, data privacy and cyber security, workplace health and safety, and anti-money laundering.

Why is Compliance Training Important?

There are many reasons why businesses need to conduct compliance training. The most obvious is to ensure the business meets its legal obligations.

As we highlighted above, businesses must ensure that they comply with all relevant laws and regulations. In order to do this, employees must not only understand the laws but also how they directly apply to their day-to-day activities.

In some cases, the training of employees is called out as a specific obligation for businesses operating under the legislation. For example, one of the compliance obligations set out in the anti-money laundering and counter terrorism funding laws requires businesses to provide ongoing staff training. Failure to meet this obligation may result in enforcement action from AUSTRAC.

Benefits of Compliance Training

There are other reasons why compliance training is important to the successful operation of businesses:

1. Risk Mitigation
   Compliance training helps businesses to manage risk. By taking a proactive approach to compliance, businesses can foster a culture where employees are empowered to take responsibility for maintaining regulatory standards.
   Risk mitigation goes beyond simply managing legal risks, and can include things such as preventing cyber-attacks, fraud or even workplace bullying. A proactive approach to compliance fosters a culture where employees are empowered to identify and raise issues with management before they become major problems.
2. Reputation management
   Businesses are expected to “do right” by their customers. Failure to do so, either by deliberately breaking the law or acting unethically, can result in significant reputational damage to the business.
   However, unintentional wrong-doing can also cause customers (and shareholders) to lose faith in an organisation. A robust compliance training program helps to demonstrate to the public that your organisation is committed to abiding by the law and operating ethically.
3. Operational efficiency
   Effective training enables staff to embed compliance procedures into their day-to-day operations. Understanding the reason why a process must be followed makes it easier for employees to adhere to it.
   Further, employees who are well-trained in compliance are more likely to recognise their part in avoiding breaches or violations. This heightened sense of accountability and engagement means employees can identify and implement procedural improvements that can lead to more efficient compliance outcomes.

Compliance Training for Employees – Building an Effective Program

Rolling out training for your staff is only one part of an effective compliance training program. You must also:

1. Document completion
   In order to be compliant, you must be able to demonstrate that your staff have actually undertaken the training. Accurate completion records need to be kept, especially for those business roles where license obligations require evidence of educational attainment.
2. Monitor and review
   From time to time, laws and regulations are updated. It is critical that your organisation has a process in place to update compliance training alongside these changes. Providing out-of-date compliance training puts your organisation at risk of breaching the law.
   Monitoring the effectiveness of your compliance training program is similarly important. If failures are occurring in which your company is breaching its legal obligations, this could be the result of poor or incomplete training.

An effective compliance training program takes time to build and implement. Partnering with a reputable training organisation like FEP means you can:

• Receive responsive, personalised support from our dedicated customer service team throughout the training process
• Access insights and practical case studies from subject-matter experts, with real-world experience in managing compliance
• Tailor your training program to meet the unique needs of your organisation
• Benefit from proactive communication and reminders to keep your compliance training program running smoothly
• Feel confident knowing we’ll keep you updated on any changes to laws or regulations.

Looking for a corporate solution that does more than just tick the box? At FEP, we offer tailored compliance training that aligns with your unique business needs.

Get in touch today.