Hybrid work in a bank's control functions is a training decision

I think banks have framed the hybrid-work question for their control functions badly. The debate usually concerns productivity, which is hard to measure in a compliance team, or culture, which is easy to invoke and hard to define. My position is narrower. For the second and third lines, attendance policy should be designed around how people learn to exercise independent judgement. It should differ by career stage and by the calendar of the work, not by seniority or by a company-wide count of days.

I came to this view by watching evidence change my mind. In 2020, at a card and payments business, I helped move 3,100 contact-centre colleagues to home working in six weeks. Their measured service held up, and many preferred the arrangement. For some time I assumed the same would hold almost everywhere. At Callowmere it largely held for experienced specialists in our control functions. It did not hold for people in their first three years.

Where a junior analyst learns to object

A compliance analyst's most important skill is not knowledge of the rules, which can be taught remotely with reasonable efficiency. It is the ability to tell a confident senior banker that a proposal does not work, and to do so in a way that is precise, proportionate and survives the banker's reply. People learn that by watching it done. They hear a senior colleague take a call from a business head and hold a position. They sit in the room when an internal audit finding is challenged, conceded on one point and defended on another. Much of that teaching happens in conversations nobody schedules.

In 2024 our second-line leaders noticed that analysts who had joined since 2021 were raising fewer issues on their own initiative than earlier cohorts had at the same stage, and were more likely to accept a business line's first explanation. With internal audit, we reviewed a sample of 140 issue files and found the pattern held after allowing for the type of work. It was not a performance problem in the usual sense, because the work was accurate. What was missing was the instinct to push back, and the colleagues who had that instinct had mostly acquired it in rooms our juniors were no longer in.

I want to be careful with that finding. A sample of 140 files is enough to prompt a decision, not to prove a cause. Other things changed in the same period, including the merger and the departure of several experienced managers. We treated it as a reason to try something specific and measure it, not as evidence that remote work had damaged the bank.

Set attendance by the calendar of the work

The pattern we adopted in January 2025 for compliance, risk and internal audit has three features. Analysts in their first three years are expected in the office three days a week, chosen by the team rather than the individual, because the purpose is to be present when the senior people are. Experienced specialists are expected on two team anchor days and during defined periods of the working calendar: preparation for a supervisory examination, the quarterly risk committee cycle, new-product approvals and the weeks around a significant issue. Managers of junior analysts are expected on all the junior anchor days. The policy is about who needs to learn from whom, so the people being learnt from carry the heavier obligation.

We did not adopt a single company-wide rule. Our operations centres, branches and client-service teams have their own patterns, and a uniform count would have been either too heavy for them or too light for the control functions. Several executive colleagues argued for uniformity, on the grounds that different rules for different teams would look unfair. I accepted that risk. Fairness in attendance policy should mean that the rule follows a reason that can be explained to the person it applies to, not that every person receives the same rule.

Bank supervisors do not set a bank's attendance policy, and I would not claim they require any particular pattern. They do expect its control functions to be effective and adequately resourced, and a board risk committee is entitled to ask how management knows that. Our risk committee now receives a short annual note on how the second line develops judgement, covering attendance, mentoring and escalation data. The note exists because one director asked a question in 2024 that I could not answer well.

What we gave up and how we will know

We lost people. Thirteen experienced specialists in compliance and audit left in 2025 and cited the change in their exit interviews, several for fully remote roles outside banking. Two were colleagues I would have worked hard to keep. We also gave up some of the recruiting reach that flexibility had given us in markets far from Richmond. We now recruit junior analysts mainly within commuting distance of our three main offices, which narrows the pool. For senior specialists we kept the option of remote work in exceptional cases, approved by the chief risk officer or the chief audit executive, and we have used it nine times.

The measures we watch are the ones that prompted the change. Issues raised on their own initiative by analysts in their first three years have increased since the new pattern began, and the share of business-line first explanations accepted without further challenge in sampled files has fallen. I do not yet know whether the improvement will last, or how much of it came from attendance as opposed to the mentoring programme we introduced at the same time. Separating those two effects would require an experiment I am not willing to run on people's careers.

The argument I would make to another bank's board is modest. Do not decide hybrid policy for control functions by analogy with the rest of the company, and do not let the decision become a proxy argument about trust. Ask how a second-line analyst at your bank learns to object, where that learning happens and who is present when it does. Design attendance around the answer, and make the experienced people carry more of the obligation than the juniors. If the honest answer is that the learning now happens well online, the policy should say so.