One of the least discussed requirements of the CFPB is training. As part of the new regulations, a lender must have training programs and training materials provided to the staff on an ongoing basis so that they can be used to educate them on the regulatory requirements. Part of these education requirements is a thorough knowledge of the organization’s products, procedures and consumer service standards. It is no longer acceptable, at least according to the CFPB, to fail to provide accurate and timely information to a consumer.
Of course, the industry has never lacked for training programs. Numerous vendors, including the MBA, have offered training programs on any number of topics. In addition, the MBA provides various certifications for specialized areas that are deemed to meet their expectations. Today, most of these training activities are provided through online training programs that are designed to provide the necessary education when and where individuals have the time to participate. But is it effective training? Did the student retain the information and can they apply it to everyday activities? Is it sufficient to meet the complexity of dealing with consumers and other members of the industry on an ongoing basis? If the CFPB or even an investor asked to test your staff as part of a review, would they be able to pass the test? In addition, as lenders know all too well, training programs can be expensive, so it is important to ask whether you are really getting what you paid for. Are online courses giving the dollar for dollar value that face-to-face training does? In other words, are we really educating the staff or are we going through the motions and paying a high price in exchange for little value?
What is Education?
Education is defined as “a change in behavior” meaning that once a participant has become aware of or has knowledge about a subject, they will incorporate that knowledge into their actions and/or daily activities. Take, for example, someone who needs to use a spreadsheet in their work activities. If they begin working on it without any education, they may be able to work through the basics and produce some results. However, the time spent accomplishing this task will more than likely be lengthy and result in possible poor outcomes. If the individual takes a class specifically on spreadsheets with the objective of learning how to use them, the time spent producing good information will shorten and the quality of the result will be much improved. This is the value of education. In the example above, the objective for this class is clear; to learn how to work with spreadsheets. Without understanding and/or identifying the objective of the class, there is no way to determine if the expected change in behavior has been achieved. In other words was it effective? So how is senior management to know if today’s programs are working or not?
Today’s education process in the mortgage industry is a combination of online training and face-to-face instruction, with the emphasis on face-to-face instruction decreasing at a rapid pace. Management knows that staffs need to be able to take classes based on their availability and timeframes and online training accomplishes this at a much lower cost. Yet there is a belief among many that face-to-face instruction is the best approach for ensuring that the training is effective. So is it better to have paid less for training that is not effective or spend more time and money on more traditional approaches.
Therefore the most important question to answer is how does the effectiveness of online learning compare with that of face to face instruction? Most individuals in the industry would answer that if the approach used in giving classroom instruction was instead given in an online format, the level of learning that occurs would be the same. While there is some research that supports that statement there are many other facets to the education process that have to be considered. If we are truly concerned that the staff actually learn something we have to explore what is the most effective way to conduct training?
In researching these questions we came across a study conducted by the U.S. Department of Education that focused on these very issues. This study looked at the effectiveness of online learning compared with face-to-face instruction while considering what practices, such as whether or not there was an online course facilitator, and conditions, such as student demographics or the instructor’s qualifications, influence the effectiveness of online learning. In addition to just online training or face-to -face instruction, the researchers included one of the newest trends in education, “blended learning” programs. Blended learning combines elements of both the face-to-face approach and online study and adds new methods of involving students in the learning process. According to Christine Cadena, in the Yahoo Contributor Network, “what makes blended learning so unique is the dynamic by which the subject material is delivered.”
What the research tells us
In conducting this study the researchers included several critical questions regarding the conceptual framework for online learning while comparing the results to actual face-to-face instruction. One of the most basic questions was determining whether the results were different when the online activities were a replacement for face-to-face or an enhancement to it. Another dimension considered was the way students actually acquire knowledge. Is the material presented to the student in a lecture or via written material manner, or is it an interactive approach in which the student has control over the content and nature of the learning while the focus of the training emerges as students and teachers interact among and between each other.
It is important for our purposes to recognize that technology can support any of these approaches. In the lecture focused approach the technology delivers the content. An example of an inactive approach would be a taped lecture that students watch on their computer or attend in a classroom. This presentation may also allow students to include digital material to address questions such as having the ability to select and read related documents as they proceed through the lecture. In interactive learning, the technology allows inaction between other students, teachers and material as well as the ability to identify material and artifacts related to the topic both while the lecture in on-going or afterward. One additional benefit to this approach is that the interaction does not need to occur at the same time, but one student can pose a question to all others in the class and have it answered by them whenever they sign in to the program. Each of these issues was taken into consideration during the course of the study.
A study conducted as part of the research compared two groups, one of which received lectures face-to-face and one that watched narrated Power Point slides shown online. Neither of these groups was given access to other online material but had access to e-mail, online chat rooms and threaded discussion forums. Upon completion of the lecture the students were evaluated to determine if the process had been effective in teaching the students. The results found that the students in the purely online section scored eight percent lower than those receiving face-to-face discussions. While this study, according to the researchers was the only one to show this decrement in performance for online programs, it is important to note that many classes and webinars in use today in the industry are presented using this very approach.
Other research, outside this study, has also supported this finding. An article, written by Arleen R. Bejerano, a doctoral student in Communication Studies at the University of Nebraska, Lincoln, evaluated the effect of such variables as peer and teacher interaction as well as the possible misinterpretation of meanings and messages when studies are offered courses online. One of her findings indicated that there was a decline in the retention factors that occur when students do not have access to other students and faculty to support the learning activities. A second problem identified was the lack of self-discipline found in some students when involved in online education. This shows up as a failure to take the initiative to access and learn the material. Overall her studies indicate that students involved in online courses may not have the support they need in order for the course to be considered effective. Many classroom instructors will tell you that the most important part of their job is knowing when the student has really grasp the ideas and concepts being presented to them which, they believe occurs when you can see it on their faces or in their eyes. This cannot occur in an online training program.
So what methods do work best?
Does this mean that if we really want the training to be effective we should abandon online sessions and revert back to classroom instruction? The answer to that is no. There is other research, some of which was identified in the Department of Education study that shows there is no significant difference in the effectiveness of online education and face-to-face instruction. The study of pure online versus pure face-to-face education leaves many critical factors untested.
This research included various independent studies on such aspects of learning as types of media that were incorporated into a program as well as how much control individual students had over the use of the media. Other studies focused on the approach of the activities that were part of the face-to-face sessions. Studies which evaluated active versus inactive learning were also incorporated into the research as were the type and level of educational material to be learned.
When the research was completed and the various studies analyzed and compared to others, the key findings were this:
1.) Students in online conditions performed modestly better, on average, than those learning the same material through traditional face-to-face instruction. It also has to be noted that the online and face-to-face conditions generally differed on multiple dimensions, including the amount of time that students spent on task. In other words, students using online classes actually took a longer time working on the material and inculcating it into their knowledge base that those attending lectures. Having access to the educational material and taking the extra time to work on the material appears to influence this result.
2.) Instruction combining online and face-to-face elements had a larger advantage relative to purely face-to-face instruction than did purely online instruction. When using the blended approach, which incorporated materials and/or artifacts found online, the education was more effective that allowing students in online classes access to this material. In other words, combining a face-to-face lecture with the ability to research material and collaborate with other students and teachers was more effective than allowing online students to do this alone.
3.) The positive effects were larger for studies in which the online instruction was collaborative or instructor directed than in those studies where online students worked independently. Once again this finding supports the effectiveness of the educational experience that provides for the option for students to work with others and collaborate in the educational process.
What does this mean for training in the mortgage industry?
Based on these studies it is obvious that the most effective learning is not necessarily whether it is online or face-to-face but instead, effective learning occurs best when there is access to various material and an interactive collaboration with other students and educators.
For individuals in the industry charged with ensuring that the training programs required by the CFPB are met, this means that just signing up for programs may not be sufficient to ensure that the funds spent are the most effective way to educate the staff. Rather it tells us that interactive sessions among the staff, whether online or in person will result in ensuring a broader more effective knowledge base for the company.
For senior management it means that rather than just picking online courses or allowing staff to select any related sounding program, there should be work done to evaluate these programs and imbed them in a comprehensive educational approach.
Does this ultimately mean that more money will have to be spent? That is really up to each executive to decide. However, there is one study, conducted at the University of Maryland, University College that compared the cost-effectiveness of online versus traditional classroom costs and found that while the start-up costs were basically the same the incremental costs of online courses increase at a much slower rate than traditional course costs.
Unfortunately there is no clear cut answer to the question which type of classes should the industry offer to obtain the best results. However, it does tell us that in all likelihood, what is being offered today in many of the programs is really not effective and that it is time we focus on getting our money’s worth for the education we must provide. A good question to ask oneself is “what is the most effective training style we need in order for staff to understand and comprehend what they need to know?”
About The Author
Rebecca Walzak is a 32 year veteran and Industry Expert on Operational Risk Management and Organizational Control. She is a leader in developing Operational and Control automated assessments for lenders, rating agencies and investors. Walzak has expert knowledge in all areas of the mortgage industry including production, servicing and secondary.
Barbara Perino is a Certified Professional Co-Active Coach guiding her clients who are executive leaders and their staff. Barbara has been trained through The Coach Training Institute (CTI) located in San Rafael, CA. She completed a Coaching Certification Program through CTI and the International Coaching Federation (ICF). Prior to becoming a coach, Barbara was a 16-year veteran of the residential mortgage industry.