Internal or External Training – Which Is More Effective?

In an industry as heavily regulated as financial services, the importance of keeping knowledge up to date is well understood. Not only do new and evolving requirements necessitate learning new rules and methods, but existing rules and expectations of the regulator are complex, and risk falling into the ‘habit’ trap. Without regular re-training, assumptions and poor practice remain unquestioned and can end up taking the place of compliance and good practice. Add into the mix the need to demonstrate compliance with the raft of regulation and personal development needs, and regular training and knowledge acquisition is an essential, rather than an optional extra.

When it comes to organising training for your firm, the choices are extensive, but tend to fall into two categories: internal and external. There are plenty of advantages to opting for internal training; it can be arranged relatively easily, and most of the costs are already subsumed within departmental budgets.

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So, are external sessions worth it?

Often, internal sessions aren’t delivered by a subject specialist, even if specialists were consulted in the creation of the training materials. This can mean that staff come away with a fair understanding of the basics, but aren’t as well grounded as they could be in the context and questions about how requirements apply to their role - and best practice within the wider industry - can go unanswered.

External trainers can also offer a fresh perspective. Internal trainers and their approaches can become well known by staff. While this offers a comfort zone that is useful for some learners, for others it can lead to a lack of the all-important challenges from new ways of thinking and doing, replaced by an over-reliance on the way the firm has always done business.

Content delivery by internal providers can run the risk of perpetuating ‘group-think’ and so isn’t a great arena for examining whether the status quo is working well. There’s less likely to be demanding new information provided, or subject matter that examines whether current working practices might need investigating and reworking.

The usual advantages of internal training can be met by some external providers as well. One of the most vaunted advantages is that the learner does not need to leave their place of work, or have to spend time travelling to another venue. However, this doesn’t apply to training where the subject expert is invited in-house. Inviting the speaker to the usual place of work has the added advantage of offering expert training at no extra effort for learners, which also means they will be more receptive to learning and comfortable in asking and exploring challenging questions.

Training developed by industry experts ensures that staff benefit from a wealth of knowledge across firms and across different sectors. This helps staff to learn about complex regulatory issues from a new angle from someone who is expert in understanding regulatory trends and approaches. External experts will have worked with hundreds, if not thousands, of other firms, giving yours the benefit of a wealth of knowledge of good practice that actually works.

Policy and procedure is vitally important, but an external expert will help staff to think outside habitual approaches – outside of the box – and understand why things need to be done in a particular way, and can offer a new viewpoint around methods. Providing training through external experts also avoids any issues that come with entrenching existing knowledge without question, particularly where this knowledge is less than up to date, or erroneous.

Our industry expert, Robert Bell, has over 12 years of experience in financial services compliance. RB Compliance Consultancy Ltd offers in-house seminars on a range of FCA compliance subjects, including SM&CR, Treating Customers Fairly, the Consumer Duty, CONC, Complaints, as well as Conduct Risk and GDPR.

To enquire further, or to book, simply email Robert.bell@rbcompliance.co.uk.