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Guide to Employee Background Checks for Financial Institutions

Guide to Employee Background Checks for Financial Institutions

Why is Employee Background Check Important for Financial Institutions?

Employee background checks are important for financial institutions because they are working with very sensitive information on a daily basis. They need to make sure that their employees, contractors and vendors are not potential risks for the company. Background checks for financial companies are usually more complicated than for businesses from other industries because the work involves handling personal information and money. Employees need to go through a background check before they start working in a financially-regulated company and this is not just for banks, it also includes insurance companies, credit unions, and other financially regulated organizations.

Employee background checks help employers ensure that they are not hiring someone with a criminal history or who has been terminated from their previous job due to nefarious behavior. Thorough background checking helps to protect employers by making sure they are not working with someone who might be a threat to their own integrity and compliance.

Background checks are becoming more important because of the rise in identity theft, fraud, and other financial crimes. Detailed and accurate background checks are also necessary for people who work with children or elderly people, and those who work with money. As such, background checks should be conducted on every new hire initially, and periodically, on current staff members. 

The background check is usually done before the hiring process is completed. It can be done by the employer themselves or by a third-party company.

The financially regulated background checks typically include:

- Financial Regulatory

- Adverse Financial

- Credit

- Global sanctions

- Criminal records

- Employment history

- Education history

- Personal identification information

- Residential history

What Information Should be Included in a Background Check?

The most important information that should go on a background check is the person’s name, age, current address, previous addresses, current and previous employment history, education history, criminal history (if any), driving record (if any), credit score (if any), medical records (if any) and social media accounts.

How to Conduct a Proper Employment Screening Process for Financial Service Companies?

A proper employment screening process for financial service companies starts with a thorough review of the company's needs and expectations.

After establishing the company's needs, it is important to assess what type of position the candidate will be filling. A financial institution should take into account not only the qualifications, but also the personality traits that are needed for that particular position. 

There are some specific checks for financially regulated businesses, including Financial Regulatory Checks, Adverse Financial Checks, and Credit Checks, to complement other key and important screening categories.

3 Helpful Tips on How To Conduct A Successful Background Check For Fintech Companies

The following are some helpful tips on how to conduct a successful background check for fintech companies: 

- Conducting interviews and checking references 

- Checking for criminal records, bankruptcies, financial regulatory, adverse financial and other 

- Checking for previous employment history

What are Most Common Types of Background Checks for Financial Institutions?

There are a variety of different types of financially regulated sector background checks that can be performed, and each one has its own unique set of benefits to help a related business to be compliant. In order to make an informed decision about which type is best for your company, it is important to understand the different types available.

An important check for the financially regulated sector is the Financial Regulations check, which is important for any new hire. Another common check is a criminal background screening, which will tell you whether or not the applicant has been arrested or convicted for any crimes. This type of check is most commonly used by companies in industries such as finance, where there are strict regulations in place to prevent fraud and embezzlement. Another type of background check is a credit report, which will provide information about how well someone manages their finances.

Why Do Some Financial Institutions Don’t Do Background Checks?

There are many reasons why some financial institutions do not do background checks, such as cost and time. However this will be a false economy if there is a risk that a financially regulated business runs the risk of falling foul of the national and international regulators.

Employee screening process is an important part of the hiring process for such a highly regulated sector. It is a necessary step to ensure that you are hiring the right person for your company. 

What are the Best Background Check Services for Financial Institutions?

The best background check services will have a variety of different types of checks to offer, with Financial Regulatory, Adverse Financial, Global Sanctions, Criminal, complemented by other mandatory screening checks, being a crucial step in the hiring process. 

Specialist background screening vendors will also be able to provide you with ongoing accurate reports that are tailored to your needs. Some services may offer credit reports, personal references, criminal records and more.

You need the very best background screening provider in terms of the wide range of fast and accurate checks, delivered using the optimum software and service, with a trusted culture.

How to Find the Best Background Check Provider for Financial Institutions?

There are various background check providers in the market today, which makes it challenging to find the best one. However, there are certain qualities and features that one should look out for when choosing a provider.

The best background check providers for financial institutions will be the ones that can provide a wide range of services that are tailored to what the institution needs such as being a FSQS registered supplier which indicates that an organization has gone through the process required to demonstrate its commitment and credentials to the financial sector.

It is important to find a provider who can provide customized background checks and reports in order to better protect your company. Also choose a provider that has the latest technology and tools, some of the providers are now using AI technology as well as blockchain technology in their background screening services. Lastly, the background check provider should also have a team of qualified professionals that can help your institution in whichever way you require, in order to strengthen your hiring and onboarding.

Veremark FT FS Background Checking Packages Table infographic 20210811

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