Banking on It

Recent legislation made it easier for banks to do business, but it also poses additional training challenges. Where does online learning fit in?



Take an industry filled with savvy customers, add two cups deregulation, and throw in a pound of mergers and acquisitions. You've just completed a recipe for the financial services marketplace in the 21st century , a market that's struggling to train its employees fast enough to keep up with rapid-fire change.



In a way, financial products and services are a lot like vegetable soup, says Ross Greene, a partner with Greene Consulting Co., an Atlanta consultant for the financial services industry. You can get it in a can for less than $1, or you can pay 10 times more for it in a four-star restaurant. The difference? In the restaurant, you're not necessarily paying for superior ingredients, but for an experienced chef to painstakingly select the vegetables, then stir and season the soup before serving it.



More and more in these prosperous times, the banking and financial services industry is realizing that customers want , and are willing to pay for , the more expensive vegetable soup. And to keep them coming back, bank employees have to know how to serve it to them.



That desire for higher quality , added to legislation, mergers and competition for employees , has led to an increasing need for e-learning in the financial industry, says Doug Adamson, executive director of professional development with the American Bankers Association (ABA) in Washington, D.C.



There aren't any statistics on how many banks have moved their training to the Web, but the ABA predicts that spending by U.S. banks on all types of training , now approximately $2.3 billion a year , will increase 12 percent every year through 2003. In fact, the ABA recently launched its own online courseware (www.abaelearning.com). It includes 13 online courses, with 40 more to be added by May.



Merger mania

Although banks were starting to merge in the early 1990s, the Interstate Banking and Branch Efficiency Act of 1994 set off the buying spree we're seeing today. The act allowed banks to acquire or merge with banks in different states. Passage of the Financial Services Modernization Act in 1999 changed the market even more, allowing banks, insurance companies and brokerages to sell each other's services without the prohibitive regulatory paperwork of the past.



Both pieces of legislation drove the need for training. For one thing, bank employees can now sell mutual funds and insurance, and do trust and estate planning, in addition to opening checking and savings accounts. Second, combining organizations means blending different cultures. "When you have more people, you have more knowledge to get your people up to speed on," says Adamson.



That work may be more difficult than expected, according to Greene Consulting, which conducted a survey last summer of 700 senior-level executives at banks, insurance companies and brokerages. The report concluded that banking execs rely too much on personal observations when judging employees? progress and not enough on objective evaluation.



"As the financial services industry moves to training measurement techniques that are more quantitative, managers who are today complacent about the current skills of their employees may be in for a rude awakening," the report stated.



According to Greene's survey, 36 percent of bank leaders said they believe Web-based training will become more effective in the future, while 10 percent believe it's already effective. Forty-six percent of respondents said they consider classroom training inefficient at times.



So what are they doing to move their training online and make it more efficient? We talked with representatives of three large banks about the challenges of implementing an e-learning initiative. Although they've seen varying degrees of success in their push to bring training online, they all agree that e-learning isn't the only answer. Instead, it gives them another option , one that's often less expensive and more effective than classroom training.



Learning to consult

In mid-1999, San Francisco-based Wells Fargo was looking for a better, more efficient way to train approximately 4,600 people in its private client services division, which is responsible for investment management, trust services and private banking. Because the Financial Services and Modernization Act allowed banks to provide more services to their clients, it also increased competition among them. Wells Fargo wanted to become known for providing the best service possible.



According to David Skolnik, director of national sales and marketing for private client services, the company wanted to help salespeople adopt a "consulting sales" approach. The idea behind consultative selling is that salespeople are not peddling products, but figuring out which services the client needs most and building those services into a package.



In order for salespeople to be good consultants, they have to know the company's services backward and forward. And in order for them to thoroughly understand those services, they need training.



According to Mark Palmer, director of education and sales technology, training at Wells Fargo had been exclusively classroom-based. But as the company added services and opened new offices, it became apparent that people weren't getting up to speed fast enough. In a mid-1999 survey, Wells Fargo found that salespeople wanted quick training they could take without leaving the office.



Later that year, the company installed a learning management system and began building and buying courses on topics such as annuities, trusts, lending and investment counseling, general financial planning, and products and systems unique to the company.



The initiative began with 100 employees taking 100 courses in January 2000. Palmer's group added new courses each month and invited feedback from the people who took them.



Palmer says he and his team have used employees? suggestions to improve training. For example, they switched learning management systems last spring after discovering their inexpensive system didn't tell them enough about employees? progress and abilities. After carefully studying the systems on the market, Wells Fargo switched to one made by Docent, a Mountain View, Calif., company. Palmer expected to have the new system up and running by mid-March.



The biggest challenge surrounding the initiative wasn't technical. Rather, it was convincing employees that training is a regular part of their jobs. Before the e-learning initiative, "we were leaving people on their own to figure things out," says Palmer. "The challenge now is making sure the system works and making sure people use it."



It appears people are getting the message. The difference between the number of people being trained now vs. during the classroom days is staggering, Palmer says. Several years ago, Wells Fargo might have offered a class on annuities three times during the first quarter of the year, training about 75 people. In comparison, approximately 6,000 courses were taken last year. That number is expected to jump to 30,000 in 2001.



One reason Palmer's group has been able to train so many more people is because online learning has proved 50 percent less expensive than classroom training. "We wouldn't be able to do it [in the classroom] because we would never get the budget," he says.



Another tool in the kit

Bob Webster, a senior vice president at Milwaukee-based Firstar, began looking into e-learning because he was skeptical about classroom training's effectiveness. "How much do you comprehend in a lecture?" he says. "How much do you retain?"



Last summer, Webster purchased off-the-shelf Web-based courses on investment, insurance, and trust and estate matters. He asked 30 of the 99 trust officers from the company's 1,200 branches to take them over a three-month period.



Webster started with a small pilot for several reasons. For one, he didn't have the budget to support a bigger project. Also, he didn't have a good idea of who should be taking the courses. "If we'd spent a ton of money and put everybody through it and found it wasn't the right program, we would have felt kind of foolish," he says.



Although Webster didn't conduct a formal evaluation after the pilot, he believes the people who got the most out of it were those who had been in the business less than five years. For those with more experience, it was a good review. "Nobody came back and said it was a waste of their time," he says. And everyone who started the program finished it.



Webster liked the fact that the tests at the end of the courses showed that the trust officers had learned the material. With classroom training, he could only evaluate employees? knowledge by looking at their annual sales and service records.



The pilot project also demonstrated e-learning's efficiency. To teach the 30 trust officers online cost approximately $30,000; to do it in the classroom would have cost around $75,000, Webster says. Thirty additional Firstar trust officers will take the training this summer.



The Firstar exec says he has no plans to abandon the brick-and-mortar classroom. "I've now got another tool in my training kit," he says. "But I think you need to have some flexibility to do other kinds of training. You don't want to spend your whole budget on e-learning."



Keeping it fresh

The past year has been one of non-stop change for Offitbank, a New York City firm that works with families, family-owned businesses, non-profit organizations and ultra-affluent individuals.



In September 1999, Offitbank was purchased by Wachovia Bank, which is based in Winston-Salem, N.C., and Atlanta. At the time, Offitbank had only two offices: one in New York, the other in San Francisco. Since then, it has opened six new offices.



Although Offitbank provides many of the same services to clients that it did before the merger, more offices meant more people. And that meant more training. Because many of Offitbank's 200 employees were new to the company, bank officials decided they needed to bring 50 of them up to speed on investment management, tax and estate planning, banking and credit, and risk management.



Fourteen online courses, built by a vendor that specializes in training for the financial industry, were offered to employees who deal directly with clients and those who are responsible for business development.



Anne Surrett, managing director at Offitbank, says she was pleasantly surprised when she started seeing the results of the training. "Very early on, we were able to see that our people were advanced in categories we didn't expect them to be," she says. For example, it wasn't uncommon to see an investment professional testing at a high level in the banking and credit area, she says.



She says a major challenge Offitbank and its e-learning vendor will face in the future is keeping the online modules fresh. "You have to make sure that the content is exciting. You have to do a lot of front-end research. The tool itself has to be dynamic enough to keep people engaged," she says.



-Matt Wetzel (mwetzel@onlinelearningmag.com) is associate editor of Online Learning Magazine.



COPYRIGHT Bill Communications Inc. 2001. All rights reserved.