Future risk and compliance professionals may be just down the hall

As banks assess their team members, which skills should bring a current employee front and center for a possible career move into risk and compliance?

By Julie Knudson

The risk and compliance picture is rarely static. Juggling regulatory requirements, external threats, internal vulnerabilities and long-term strategy among a host of other challenges, these professionals need to be adept at managing change.

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A wide variety of factors, such as the continued growth of digital banking, ESG investment initiatives and the ever-shifting crypto discussion mean that banks’ reliance on risk and compliance know-how will only increase. But when it comes to hiring highly credentialed risk and compliance professionals, banks face competition from multiple directions. Jostling for talent has increased, with everyone from fintech firms to healthcare companies to the gaming industry seeking that same risk and compliance expertise. For forward-looking banks, a homegrown solution that focuses on developing their own bench of internal talent is a smart way to keep their risk and compliance practice healthy.

Core skills put team members on the road to risk and compliance success

As banks assess their team members, which skills should bring a current employee front and center for a possible career move into risk and compliance? A range of capabilities and attributes are core to success in this challenging discipline.

“An eagerness to learn and an understanding of operations is particularly beneficial,” says Tina Shaver, EVP and chief risk officer at Youngstown, Ohio-based Premier Bank.

Knowledge about how the bank’s systems operate gives internal team members a significant advantage.

“People who have that background—whether it’s in loan area deposit, even sometimes at the branches—they understand how all of the bank systems work together,” she says. In-house candidates who develop an understanding around internal workflows can leverage that knowledge in their transition toward the compliance and risk functions. “Especially with the intersection with operational risk, I think it’s valuable to have members of the team that have that core background.”

Throughout her career, Krysti Cunningham, SVP and chief risk officer at Security National Bank of Omaha, says she’s worked in multiple areas, including teller, bookkeeping, all flavors of real estate lending and even managing a smaller bank data center. “To be an effective chief risk officer, you don’t have to know everything, but you need to know where to go to get the information,” she says. “Working in other areas and on committees, you are exposed to that information.”

Employees that are proactive about building knowledge of the bank’s operations may be good candidates for additional mentoring and training. This strategy capitalizes on their ability to put context around the bank’s operational flows and enables them to more efficiently find information they don’t already have.

A willingness to take ownership and an ability to think strategically are other valuable attributes that Cunningham believes contribute to success in the risk and compliance field.

Unsurprisingly, she sees strong technology and analytical capabilities as additional musts. “Without those skills, it’s going to be really tough for them to move into that risk and compliance role,” Cunningham says.

When it comes to skill sets, a data analytics competency plus a strong familiarity with AI and machine learning models are particularly valuable, as these areas increasingly become central to many risk and compliance activities. “It’s being able to understand where the industry is going, where your risks are changing, and how they can be utilized to help you manage that within the organization,” says David Kelly, CERP, CRCM, chief risk officer at FirstBank Holding Company in Lakewood, Colorado.

General analytical skills, combined with good problem solving capabilities and the ability to develop innovative solutions to new and old problems alike, are also important. “The more you can use and develop these skill sets, and be able to deploy them within your institution, the better you’re going to be at finding and identifying risk areas first and being able to take action before something blows up on you,” Kelly says.

Becoming an employer that openly values risk and compliance skills

Steep competition for risk and compliance talent puts the onus on banks to show candidates why they should choose to work there. Building a reputation as an employer that values risk and compliance skills will help position the institution to attract quality candidates. An authentic commitment to advancing internal team members also goes a long way toward keeping staff happy, meaning they’re less likely to be poached by other employers.

FirstBank takes a direct approach to nurturing a work environment that’s welcoming and supportive. “If you’re a good corporate citizen, with the right culture and the right leadership, people tend to stay because you are developing them,” Kelly says. “They see the investment in them as well.”

A realistic assessment of workers’ financial expectations is also important. Kelly’s bank does periodic pay market comparisons to ensure their compensation is competitive. The team also puts a focus on career development so people can clearly see their progression opportunities.

“We show them that they can progress through those paths as they move forward into the future,” Kelly says. Transparency about where the company is going and the options that exist as part of that growth, coupled with ongoing investments in the bank’s workforce, help to build a sense of value among staff. The approach has resulted in a longer tenure for employees as well as the management team.

Developing a culture that values learning and collaboration is another important step toward keeping the most promising risk and compliance talent on board. Premier Bank has created relationships between the first line and second line that not only nurture employees’ skills, it also aids the bank’s risk and compliance efforts. “They have that partner to help them,” Shaver says. “Am I on the right track with the testing I’m doing? Am I finding the right items? Are my test scripts good?”

This partnership ensures the first line can learn and receive the guidance they need to continue honing their skills with an emphasis on career pathing for all positions and all career stages.

Maintaining a positive environment is also important for better outcomes. “If we find something that the first line has found, we try to celebrate that from the risk side, because that’s always a good thing,” Shaver says. The strategy reinforces the notion that everyone should be looking and engaged, even if they’re still building up their competencies. “We don’t expect you to be the expert, but know when to come to us and we’ll give you guidance,” Shaver says.

In-house opportunities to deepen the risk and compliance bench

Some additional strategies can help to build team members’ aptitude for risk and compliance duties and empower them with the skills to be successful. At Security National Bank of Omaha, high performers can participate in different committees as well as an innovation squad.

“They are looking at the new things out in the industry that we should be considering as a bank,” Cunningham explains. The innovation squad in particular looks at different issues affecting the industry—including emerging trends, technologies, and areas of concern—and considers how the bank should respond to or leverage them. “They’re also challenged to identify the risks of each,” Cunningham says. “What are the rewards in it? How would you measure success?” Using this strategy, sharp-minded employees can build their risk and compliance chops in a more failure-tolerant environment while also helping the bank drive innovation.

There’s a strong undercurrent of developing and promoting from the inside at FirstBank. The team also believes that everybody in the company is already, in some way, a risk manager. “They may not be specifically in the risk management function or the compliance function,” Kelly says. “But it’s embedded throughout the whole organization.”

Fostering that kind of first line of defense is helped along by bringing the appropriate stakeholders together as new projects come up. “You have all the different mindsets together and they learn from each other, and they feed off of each other,” Kelly says. “Within the risk disciplines themselves, we have them shadow different areas, especially those they’ve had less exposure to, just to get a feel for what is going on within those particular functions.” These partnerships enable the various areas to more quickly work together—and to have a better understanding of the situation—when the bank needs to implement a change, or a question arises about the best course of action to attack a new risk or compliance challenge.

Cunningham attributes her own success to an outstanding mentor early in her career. She was given the opportunity to start from the ground up and build a wealth of experience working in all areas of the bank. She uses that perspective to create similar opportunities for her current team members.

“I’m generally thinking five to seven years out,” Cunningham says. “Who is that high performer that I’m trying to mentor into my role?” By having a clear picture of the attributes she wants in that person, it’s easier to not only spot the right people for additional mentoring but also to build out key capabilities if a strong team member is weak in one area. “Now let’s hone in on what we can provide for the type of training they need to be successful in their role.”

Training opportunities abound to build risk and compliance skills

Traditional in-person courses and conferences have been joined by a host of digital learning opportunities, and that’s a good thing for bankers. Anyone seeking to shore up their risk and compliance knowledge have a variety of avenues to pick from. “How lucky are we today that we have both options,” Cunningham says. Even after working in compliance for many years and knowing the regulations inside and out, she still pursued her certifications including CRCM . Though it was a stressful process, she says doing so was among the best things she has done in her careers. “We can’t ever quit learning. Regardless of how long you’ve been in the bank, you need continuing education, and you can get so much out of it.”

Every learning event has the potential to open up new career growth areas. Shaver believes bankers should be actively engaged in the industry and she encourages banks to help their team members grow professionally by offering training, providing mentoring opportunities, and enabling staff to participate in trade groups.

Formal certifications and ongoing education are also important ways emerging risk and compliance professionals can boost their knowledge as well as their credibility. “I am a firm believer and supporter of training and education including certifications, such as the CRCM,” Shaver says. “It demonstrates an institution’s investment in their employees and an employee’s investment and commitment in furthering their career in a specialized area.”

Julie Knudson is a frequent contributor to ABA Banking Journal.