Your policies are your overarching governance tool, guiding your organization’s decision-making and strategy. However, FIs often treat policies like outdated documents on a shelf, only dusted off when an examiner asks for them.
Policies are more than words on paper — they must be communicated actionably and understandably to be carried out effectively.
Ask yourself: Do my employees know what the board has set for risk appetite or tolerance levels? Do we understand the direction they’re expected to take under those policies? If the answer is no, you’ve got a disconnect that needs to be addressed.
Let’s explore some tips and best practices for helping your FI communicate policies so you can establish a solid framework for developing effective procedures and improving your enterprise risk management (ERM) strategy.
Related: From Blueprint to Practice: 5 Tips for Implementing Sample Policies
Set the tone at the top
Strong support from the leadership team, especially the board, is crucial when implementing policies. If they don't actively champion them, policies quickly become meaningless documents that employees don't take seriously.
This top-down commitment — called 'tone from the top' — must also extend into your regular review processes. Some questions to consider include:
- Is this policy working as intended?
- Are we testing it?
- Are we doing what the policy says?
If the answer is no, the management team must step in by updating the policy or its follow-up procedures.
Remember, tone at the top isn't just a nice-to-have; it’s necessary. If no one at the executive level recognizes the strategic value of policies, they will become another yearly checkbox item. No one will feel the urgency to update them, align them with current regulations, or improve them based on best practices. Without accountability, there is no progress.
Related: 5 Ways to Convince Management that Compliance is Important
Build trust through proper training
In my experiences working at FIs, employees aren’t always aware of policies, even if they directly impact their day-to-day responsibilities. It’s tempting to think that if you document something, it’s happening, but that mindset is where things start to fall apart.
Even when employees try to align with the best practices and policies, they still may be in the dark. Consider your frontline staff, such as tellers and customer service representatives. Do they have the proper training to detect fraud or avoid social engineering attacks? Are they identifying and reporting compliance red flags per the Bank Secrecy Act and Anti-Money Laundering (BSA/AML) policies?
Policy training is crucial in building alignment, understanding, and accountability across every level of your organization. Reevaluate your current program and ensure all staff members receive proper training. Attach relevant policy documents to required training sessions so employees can learn how policies directly relate to their daily activities and responsibilities.
Between staff turnover and evolving regulations, annual training may not be enough. Establish regular refresher courses to reinforce understanding. Executive summaries consisting of brief overviews, key points, and other critical information are also helpful in ensuring relevant team members understand policies.
Related: Employee Security Awareness Training Best Practices for FIs
Implement feedback mechanisms
Proper employee training can build trust across your institution, and feedback can encourage transparency, essential for a thriving compliance culture.
While traditional risk management takes an often-siloed approach to identifying, assessing, and mitigating risks, more advanced risk approaches — including ERM and integrated risk management (IRM) — consider inter-department coordination and collaboration. For example, an ERM approach to communicating policies would most likely include senior management involvement, continuous internal feedback loops, and regular policy reassessments.
Here are some tips to keep in mind as you consider your institution’s feedback process:
- Encourage internal conversations: Employees should feel safe reporting issues, sharing concerns, and suggesting improvements without fear of retaliation. Listening to staff (specifically frontline team members) ensures risks are surfaced early so senior management and the board can take prompt action.
- Establish a feedback loop: Empower employees to provide ongoing input on policy clarity and effectiveness. Integrating their feedback helps refine policies, drive engagement, and encourage shared responsibility for maintaining the compliance culture.
Related: What are the Three Lines of Defense in a Compliance Management System?
Establish a centralized policy repository
Specific policies, such as the employee handbook or acceptable use policy, are front and center because they require sign-off. Beyond that, your team members may not know what other policies exist or how they relate to their day-to-day work.
With a centralized policy repository, you can give employees a clear view of their actions and the policies that guide them. This knowledge hub may be found on your company intranet alongside other commonly used documents like templates and customer forms.
With real-time access to policies, your employees can easily track changes and maintain version control, a common hurdle FIs face with decentralized or manual systems, where tracking changes can be a full-time job.
Want to ensure your team members stay current on policy best practices? Schedule periodic notifications for critical policies to ensure all relevant parties know policy updates, important dates, and other vital information.
Download the Whitepaper: Policies as a Power Tool: Creating Policies that Get the Job Done
Clear and effective policy communication is essential to building a culture of compliance and accountability within your FI. When leadership sets a strong tone, training is consistent, and employee feedback is encouraged — supported by a centralized repository that makes policies easily accessible — your policies become practical, actionable tools.
Want to jumpstart your policy development but don’t know where to start? Download our free wire transfer policy template and discover 40+ other sample policies in Ncomply.
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