Asset Management

04:15 PM
Connect Directly
Google+
Twitter
Facebook
RSS
E-Mail
50%
50%

Compliance Training Goes From Mindless to Competitive With Game Mechanics

True Office is helping big banks gamify compliance training for better engagement and understanding.

The New York startup True Office, is helping financial firms do the impossible: Make compliance training interesting, engaging, and more effective. The secret weapon? Video game mechanics.

A graduate of the 2012 FinTech Innovation Lab, True Office worked closely with Barclays, Morgan Stanley, and Citigroup to pilot its interactive learning technology. The banks' employees played games in which they were asked to investigate and analyze insider trading or money laundering scenarios in accordance with regulatory and company policies. They were tested on their ability to spot illicit behavior and their understanding of the consequences. Because people can't take in big chunks of information, games never take more than 12-15 minutes, and the application gives the players feedback on their decisions.

Users overwhelmingly responded that they better understood policies following the games, and True Office's provisional studies suggest data retention is exponentially higher than traditional methods (think of grueling HR lectures and PowerPoint presentations) in 75% less time.

"There's a lot of efficiency," Adam Sodowick, founder and CEO of True Office, told us. "And we measure learning, not just by if the user completes the task and thinks they understand it more, but would they be prone to retention and recall. Meaning, if they did it six months later, would the employee be able to confront it and get the knowledge out of the attic and do something about it?"

The technology is largely used by banks to measure subtle decisions about compliance. As a simple example, instead of asking questions like "Would you take bag of money from a client?" (obviously not OK), the program asks, "Would you go to a classical music concert with a client or accept a small sports memorabilia gift?"

Analytics around these decisions help the organization see where employees are proficient and where there are strengths and weaknesses, Sodowick said. "We check a lot of gut reactions, because these are the things companies get fined for but miss in their training."

True Office is still a new company, so it hasn't been able to track these results over the long term, but client data coming in suggests that the behavioral lessons are sticking. That success has helped True Office spread into other areas of companies, including information security, sales, customer support, and product training.

"We found that we were quickly taken into other areas of financial companies to roles that actually affect the top line," Sodowick said. "For example, a sales force selling a financial product needs to not only be compliant. They need to understand those products before they hit the field. If I could train them, get data back, align them, and see where my bottom 10% is or my top 10%, then that's valuable to me."

Traditional learning management systems are antiquated against demands for deeper analytics. Many can't produce information beyond completion rates and pass/fail grades, or they can't nudge the employee to complete any remaining training modules.

"Today, headquarters wants to see if there is a trend in X business unit in X geography where they don't understand this piece of anti-money laundering. It may mean they're not checking their customers on this properly," Sodowick said. "Based on those findings, they're able to send out a 2-to-3-minute game focused on the grey areas, something fresh that will allow them to understand that issue in greater depth."

In this way, firms can bring employees up to speed and demonstrate to regulators that the organization is in compliance. "As we mature as a company, we want to sit with people where the outcome is important. We see education as something that makes companies more competitive. We fail if people aren't learning more, and they do."

Becca Lipman is Senior Editor for Wall Street & Technology. She writes in-depth news articles with a focus on big data and compliance in the capital markets. She regularly meets with information technology leaders and innovators and writes about cloud computing, datacenters, ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Greg MacSweeney
50%
50%
Greg MacSweeney,
User Rank: Author
7/21/2014 | 6:32:15 AM
Re: Is there a "fun factor" in compliance?
It seems to me, as an outsider looking at the reports, that it was a combination. However, the culture of a company -- where compliance is put on the back burner -- seems to have more to do with it than a lack of understanding. In fact, where companies were fined for not being compliant, chances are the offending employees knew they were breaking some rules and they did their best to hide it.
IvySchmerken
100%
0%
IvySchmerken,
User Rank: Author
7/16/2014 | 5:50:32 PM
Is there a "fun factor" in compliance?
It is interesting that financial firms are bringing game mechanics into teaching compliance to employees. Reading a compliance manual or holding a workshop can be quite boring and attention tends to drift. Playing an interactive game can be more engaging, and can lead to better retention, as you suggest, though it's too early to know for sure yet. However some of the recent violations of anti-money laundering and Libor rate-fixing have taken place at some of the world's major banks (BNP Paribas, Barclays). Do you think that compliance training will help alter their behavior? Was the problem a lack of awareness of the rules, or was it a culture that management allowed to persist?
Kelly22
100%
0%
Kelly22,
User Rank: Author
7/16/2014 | 4:48:14 PM
Making Compliance Fun
I can see how a video game would engage users more than a boring PowerPoint presentation, but it's interesting to learn that gamification can be so effective in helping them understand and retain information. Seems like a win-win for workers and their employers - employees benefit from greater understanding of concepts and businesses benefit from being able to determine (and strengthen) the weak spots in their education strategy. 
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - Elite 8, October 2014
The in-depth profiles of this year's Elite 8 honorees focus on leadership, talent recruitment, big data, analytics, mobile, and more.
Video
Exclusive: Inside the GETCO Execution Services Trading Floor
Exclusive: Inside the GETCO Execution Services Trading Floor
Advanced Trading takes you on an exclusive tour of the New York trading floor of GETCO Execution Services, the solutions arm of GETCO.