Creating an effective credit skills training program

Maintaining a competitive edge is important for any business, particularly for banks and other financial institutions given that many of the products and services offered across the industry are similar.

While providing professional, friendly customer service is a key component to grow and maintain customer loyalty, so is having a well-trained staff that understands the importance of a skillful credit decision making process with each customer.

Tom Carlin, president of the Financial Training Group and managing partner of its e-learning subsidiary Eensight, an online credit training company, said when employees make bad loans, it can prove costly so making the right lending decisions is critical. Establishing a strong credit skills training program for employees can help improve customer satisfaction and reduce the likelihood of poor lending decisions.

“Assessing the needs of an organization is essential when working to establish a credit training program,” Carlin said.

Financial institutions need to determine what level of training is needed for different employees.

“Underwriters need more intensive training to make good lending decisions and write high quality loans,” Carlin said. “Branch managers, relationship managers and platform staff need to know enough about the credit decision-making process to communicate effectively with clients, apply credit analysis, provide the necessary documentation and make recommendations to underwriters.”

Given budgetary and time constraints, many banks and financial institutions find the utilization of e-learning technology to be “very effective and economical,” said Carlos Almeida, a managing partner at Eensight. With some bank branches seeing high rates of employee turnover, classroom training takes more time to implement and it costs more money to train employees at multiple locations, he said.

Credit skills assessment

To determine the level of training needed for each group of staff, an institution should first conduct a diagnostic credit skills assessment to identify gaps in knowledge that may exist, Carlin said. Doing this will enable the company to “custom design a credit training program that will meet their needs and fill the skills gaps in their target populations,” he said.

Management needs to communicate to employees that this is not intended to be punitive. “It’s important for employees to know that when a credit skills assessment is done it is not meant to be used to fire anyone but to identify skills gaps,” Almeida said.

In addition to administering credit skills assessments, other effective tools that can be used to assess pre-training gaps in staff include conducting client and employee surveys and using mystery shoppers, Almeida said. A mystery shopper is someone hired by a business to assess the quality of a transaction and evaluate the knowledge and skills of the staff and level of customer service provided. “Measuring where a group is before training tells you where you need to start,” he said.

Establishing performance expectations

Almeida said establishing expected performance standards for branch bankers and retails lenders is important as the next training step. Typically, management’s expectation for training is that staff will be able to engage in clear communications with customers by asking good questions to effectively match a client’s needs with the offerings of the financial institution, understand credit analysis, obtain enough information from clients and apply what they’ve learned from course content in the real world. Once expectations are set, establishing a realistic time frame to achieve these skills needs to be conveyed to staff that will undergo training.

“Once you know the knowledge and skills gaps, you then look for an e-learning program to fit your needs to apply credit analysis fundamentals and create a training program to close the gaps,” Almeida said.

The challenge that most institutions face is budgetary, and using a good e-learning system proves to be more economical than exclusively using traditional classroom training, he said. Carlin said, “E-learning can be combined with follow-up classroom training and webinars if an institution so desires,” he said.


During implementation, Almeida said management needs to communicate to staff the importance of training, the learning objectives and the time frame expected to complete the program. For example, if a training program has five modules and management’s plan is for trainees to complete one module each week, staff needs to clearly understand those expectations.

“It’s important to communicate time frame to employees as some staff may try to learn all of the modules in one week instead of over the course of several weeks,” Almeida said. “This can lead to some staff not absorbing the material and not passing courses. A good e-learning system can help manage that by sending reminders to staff regarding due dates and send updates to management regarding an employee’s passing scores and progression through training.”

Part of the implementation process when using an e-learning system is to conduct a final assessment after participants have completed the training. Carlin said a good learning management system can provide assessment tools such as mini quizzes, games, case studies and end-of-module grades.

“The optimal approach in assessing underwriters after they complete their credit training is to assess their tech skills and review case studies where they focus on lending,” Almeida said. “Utilizing mystery shoppers, conducting customer surveys and observing day-to-day activities in the workplace can be done after training also to reassess staff. You know the training is working if performance has improved and client satisfaction is higher.”


Organizations should recognize their employees when the training is complete. Some ideas include hosting a one-day concluding workshop to review case studies and apply what has been learned, providing letters of recognition to employees upon successful completion of their training or hosting an employee lunch.

“Making employees feel they are important and their accomplishment is relevant to the organization is integral,” Almeida said.


Freelance writer article Carole Jakucs contributed to the writing and research of this article.

By |2019-11-25T08:22:45-06:00July 6th, 2016|Financial Services|0 Comments

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