JULY 20248MY OPINIONIN MY OPINIONINBy Sandra Williams, Senior Vice President, Senior Credit Officer, Liberty Bank - CTIn the early 1990's and extending through the mid-2000's large and mid-size regional banks totally cut or severely diminished the scope of in-house credit training programs. These programs were viewed as expensive, labor intensive and not vital as banks strove to recover from the crises within the industry during these periods. During this same period banking regulations became more stringent and quantitative measurement of portfolio risk more critical. Technological advancements enabled greater reliance on computer-aided training to lower training costs and reach a wider audience. Organizations such as RMA developed certificate programs that sought to standardize credit analysis training. Banks also utilized external training resources to leverage the expertise of specialized training providers without incurring significant long-term costs.To summarize the shift towards external training programs occurred for several reasons:1. Cost-effectiveness: Developing and maintaining in-house training programs was expensive. External training programs allowed banks to leverage the expertise of specialized training providers without incurring significant costs.2. Expertise and specialization: External training programs often provide access to industry experts and trainers who have specialized knowledge in credit analysis and lending. This allows banks to provide their employees with the most up-to-date and relevant training.3. Regulatory requirements: The banking industry has witnessed increased regulatory scrutiny in recent years. External training programs often incorporate regulatory updates and compliance training, ensuring that employees are aware of the latest regulations and guidelines.4. Flexibility and customization: External training programs offer flexibility in terms of timing, duration, and customization. Banks can choose programs that align with their specific needs and the skill sets they want to develop in their employees.The transition to reliance on-line programs and external training providers did lower overall costs and provide a measurement tool to record completion of required regulatory training. Inculcating information gleaned during this type of training into actual work production has proven to be more challenging. Bank policy often differs in form and substance among different financial institutions. External training courses teach the requirements but not the application or process used by a particular bank. That can only be done within the institution and relies on an organized effort which is often not present. Traditionally In-house credit training programs typically consisted of a combination of classroom training in financial THE REEMERGENCE OF FORMAL IN-HOUSE CREDIT TRAINING PROGRAMS IN THE BANKING INDUSTRYSandra Williams
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