Background screening for financial services: How to move to a new provider

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Today’s banks operate within a uniquely complex, competitive and highly regulated industry and hiring managers rely on a robust background screening partner to ensure the safe, successful hiring of talent.

2.5 million people are currently employed in the UK’s financial services and still demand exceeds supply; the need for fast, innovative hiring has never been greater and the relationship between banks and their screening provider must now extend beyond standard checks.

So what happens if the working relationship with your account manager has run its course, you need a wider global capability or a platform that integrates more seamlessly with your existing workflows?

Switching to a new background screening provider may seem daunting, especially considering the regulatory, security, risk, reputational and operational considerations inherent in the financial services industry - but it needn’t be costly, time-consuming or complex. 

In the following blog, we’ll offer some clear steps for a smooth and successful transitioning process. 

Evaluating the Need for Change

Before considering a switch, it’s important to be clear on your reasons for moving to a new provider. Common catalysts include:

  • Operational Efficiency: In the fast-paced world of finance, delays in background checks can impede hiring processes, such as onboarding, risk management and compliance, affecting critical business operations and regulatory compliance.

  • Regulatory Compliance: Financial services are subject to strict regulations, such as Know Your Customer (KYC), Anti-Money Laundering (AML) and the Fair Credit Reporting Act (FCRA). These impose stringent requirements on background screening processes while non-compliance can result in severe penalties, including fines, legal action and reputational damage.
  • Tech Innovation: Outdated technology and limited integration capabilities may hinder the operational efficiency of today’s fast-growing financial services firms, increasing the risk of security breaches and prompting them to seek providers with more advanced and robust solutions.

  • Data Security: Financial institutions handle sensitive personal and financial information, making them prime targets for cyberattacks and data breaches. It’s critical that background screening providers have robust security measures in place to safeguard information, ensuring compliance with data protection regulations such as the General Data Protection Regulation (GDPR) and the Gramm-Leach-Bliley Act (GLBA).

  • Merger and Acquisition: Changes in ownership or corporate structure can significantly impact service levels, pricing structures and compliance protocols, potentially forcing a reassessment of your current provider.

  • Cost-Effectiveness: Escalating costs and inflexible pricing structures may be straining your budget, prompting a search for more cost-effective alternatives without compromising quality.
  • Customer Support: If service levels and after-sales care are flagging, this could be down to staff cuts, a focus on bigger business or a management change. Either way, a change in provider is a straightforward option.

Step 1: Finding a New Partner

Before starting the transition process, auditing your current background screening process will identify what’s working and what’s not. Given the challenges that underpin recruitment in financial services - regulatory compliance, data security and tech innovation - check that any new provider will offer the full range of background checks required.

There are several other important steps to help you decide on a new background screening partner.

  1. Shortlist Providers: You’re casting a wide net, so seek recommendations from industry peers, conduct thorough research on established providers with a proven track record in the financial services sector and prioritise those with specialised expertise in regulatory compliance and data security.

  2. Evaluate criteria: Creating a selection criteria checklist will make the evaluation period more efficient and effective. Evaluate potential providers based on their technological capabilities, regulatory compliance solutions, cost-effectiveness, industry experience and high levels of customer satisfaction.

  3. User Experience: How did you find the demo - does the interface look clean? Does the workflow look intuitive? Could you imagine training your team to be straightforward?

  4. Candidate Experience: With 85% of HR professionals stating that improving the candidate experience is a top priority for their organisation, it’s vital that the user experience extends to today’s tech-savvy candidates who expect a fast, seamless journey, uploading information on their phones and desktops quickly and easily.

  5. Impressions: Did you form a good rapport with your salesperson? You will need an experienced and friendly representative, knowledgeable in the requirements, dynamics and nuances of the banking industry.

Step 2: Making the Shortlist

Once you’ve begun to hone your requirements, it’s time to take a closer look at your shortlisted providers and carry out our own due diligence. Look at their capabilities, experience in the financial sector, compliance solutions and track record of stakeholder satisfaction:

  1. Test Checks: Conduct thorough testing of each shortlisted provider's background screening procedures, focusing on accuracy, efficiency and compliance with regulatory requirements.
  2. Stakeholder Involvement: Involve key stakeholders, including compliance officers, legal advisors and HR professionals in the decision-making process to ensure alignment with the strategic objectives and regulatory requirements of your bank or fintech firm.

  3. Request sample reports: If you’ve not carried out a check during your trial, request sample reports on various checks to compare with those from other suppliers.

  4. Compliance Assessment: Assess each provider's compliance solutions, including background check procedures, data security measures and regulatory reporting capabilities, to ensure adherence to industry regulations and standards.

  5. Cost: Ask for their pricing structure tailored around your level of use, frequency, range of checks and geographies covered. Is it transparent, fair and value for money?

  6. Ask Around: Follow up on any testimonials you’ve been given by the provider - this is your opportunity to ask about areas of concern. How is their relationship with the supplier? Does the platform ever experience outages that could risk damaging your reputation?

  7. Assess the disruption of the move: Running a cost-benefit analysis will identify if the improvement of a new provider will outweigh the temporary disruption involved. Consider the conditions necessary for an easy transition: hiring and budget cycles, staff training, tech updates, regulatory deadlines and operational impact

Step 3: Transitioning to Your New Partner

Governed usually by technology, there are several steps to planning the switch effectively with the view to minimise disruption and downtime, thus ensuring a seamless process:

Communication: Develop a comprehensive strategy to inform all relevant stakeholders about the transition process, including employees, clients and regulatory authorities and address any concerns or questions they may have.

Data Transfer: For a sector dealing with highly sensitive data, carefully co-ordinating with both the existing and new providers is essential to facilitate the secure migration of sensitive information in compliance with data protection regulations. 

Training and Support: To facilitate a successful launch and reduce the costs associated with the switch, reliable training on the new background screening platform should be on hand to employees, while ongoing support will ensure a smooth transition and minimise disruption to daily operations.

Monitoring and Feedback: Monitoring the performance of the new background screening provider, including turnaround time, accuracy and compliance with regulatory requirements. Solicit feedback from employees and clients to identify any areas for improvement.

Step 4: Ensuring Ongoing Success

With 60% of finance employers planning to recruit over the next year, fast-growth banking clients must continuously evaluate and refine their background screening process to enhance efficiency, accuracy and regulatory compliance. This includes:

Assess and Respond to Feedback: The most insightful feedback often comes from those directly involved in the screening process on a daily basis. Regularly seek input and insights from candidates and hiring employees to gauge the effectiveness of your screening services.

Use Data Analytics: Measuring key metrics will gauge the success of your transition so be sure to evaluate the efficiency and impact of your screening platform by comparing hiring processes and outcomes between your previous and new providers. 

Revisit Performance Targets: Regularly review and reassess performance targets and conduct thorough evaluations to ensure that they remain aligned with the dynamic needs of the financial services industry.

Are you ready to switch?

Candidates seeking to work within the highly regulated and competitive, global world of financial services must have a balance of technical skills, regulatory knowledge, industry experience, cultural fit and adaptability. It’s crucial that today’s banks have a reliable screening provider able to meet these demands, one that remains agile and adaptive to the evolving demands of the industry.

By following the steps outlined in this blog, banks, fintechs and other financial institutions can navigate the transition to a new background screening partner with ease. 

At Veremark, we provide comprehensive support throughout the process, offering a tailored service to our customers to ensure a smooth transition without disruption to day-to-day operations, so that banks can enjoy safe and successful recruitment, protected from financial, security and reputational risk.

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What background check do I need?

This depends on the industry and type of role you are recruiting for. To determine whether you need reference checks, identity checks, bankruptcy checks, civil background checks, credit checks for employment or any of the other background checks we offer, chat to our team of dedicated account managers.

Why should employers check the background of potential employees?

Many industries have compliance-related employment check requirements. And even if your industry doesn’t, remember that your staff have access to assets and data that must be protected. When you employ a new staff member you need to be certain that they have the best interests of your business at heart. Carrying out comprehensive background checking helps mitigate risk and ensures a safer hiring decision.

How long do background checks take?

Again, this depends on the type of checks you need. Simple identity checks can be carried out in as little as a few hours but a worldwide criminal background check for instance might take several weeks. A simple pre-employment check package takes around a week. Our account managers are specialists and can provide detailed information into which checks you need and how long they will take.

Can you do a background check online?

All Veremark checks are carried out online and digitally. This eliminates the need to collect, store and manage paper documents and information making the process faster, more efficient and ensures complete safety of candidate data and documents.

What are the benefits of a background check?

In a competitive marketplace, making the right hiring decisions is key to the success of your company. Employment background checks enables you to understand more about your candidates before making crucial decisions which can have either beneficial or catastrophic effects on your business.

What does a background check show?

Background checks not only provide useful insights into a candidate’s work history, skills and education, but they can also offer richer detail into someone’s personality and character traits. This gives you a huge advantage when considering who to hire. Background checking also ensures that candidates are legally allowed to carry out certain roles, failed criminal and credit checks could prevent them from working with vulnerable people or in a financial function.

Transform your hiring process

Request a discovery session with one of our background screening experts today.

8 Screening Essentials for the Finance Sector

How to hire the top talent first – without risk to your business

For banks looking to recruit top talent, where every decision carries significant implications, pre-employment background screening is an essential way to safeguard both the rights of the candidate and the wider interests of the organisation. This guide focuses on 8 background checks, essential for hiring within the financial sector, to show you how to validate candidate credentials and set up your systems for safe and successful hiring.

In this report, we discuss:

- The hiring landscape in the financial sector

- The 8 checks we recommend carrying out

- How to streamline your hiring process

Download this guide today to find out how to hire faster and create better hiring outcomes.

Get your own copy!