Importance Of Background Checks In The Financial Industry

Background checks have become a crucial component in the hiring process for businesses in all industries, especially for banks and others in the financial industry. They serve as a tool offering insights that are either accidentally or intentionally omitted from a job candidate’s application, resume and interviews.

If you are responsible for the hiring process for your financial institution, it is imperative to know that the candidate is who they say they are and that you can trust that they are reliable and capable of protecting financial assets, securing sensitive data, ensuring trust and reputation, promoting a safe and positive workplace and complying with strict industry regulations.

What Is a Bank and Financial Institution Background Check?

professional bank and financial institution background check is essential in helping you vet key personnel at your financial institution, especially since a background check isn’t a single entity. You can choose to research a candidate’s educational background, credit history, driving record and much more to ensure that they are properly qualified and have the integrity that you need to keep your customers, employees, institution and reputation safe.

Many financial institutions perform background checks on professionals applying for the following positions:

  • Loan officer
  • Bank teller
  • Customer service representative
  • Bank managers
  • Accountants
  • Auditors
  • Financial advisors
  • Analysts

Anyone with access to confidential customer information and internal bank data should undergo a detailed background check.

The types of financial institutions that might conduct background checks include:

  • Central banks
  • Credit unions
  • Savings and loan institutions
  • Retail and commercial banks
  • Credit card companies
  • Brokerage firms
  • Investment banks and companies
  • Mortgage companies
  • Insurance companies
  • Financial technology (FinTech)

Why Are Banking and Financial Background Checks So Important?

Background checks for banks are crucial because the risk is so great in this industry. Failure to conduct a thorough and professional background check using best practices could result in devastating losses due to unqualified candidates who put the institution at risk or due to intentional and malicious identity theft and embezzlement. Without taking the proper steps to vet candidates, you are setting your institution up or a negligent hiring liability that you can’t afford to risk. You stand to lose significant sums of money and the trust of your stakeholders, customers and the public.

Further, by proactively using and promoting your use of this vital hiring tool, you can enhance the trust and integrity of your institution and employees.

How to Conduct a Financial Industry Employee Background Check 

Once you have decided to implement a background check policy, employing industry best practices, here are some things you should do.

Select the Types of Screenings You Will Conduct

There are several employee background checks you can use to research candidates in addition to those listed above, including the following:

  • Education verification
  • Employee history verification
  • License verification
  • Reference verification
  • International verification
  • Civil court case searches

Depending on what each professional candidate might do in their role, there is at least one or more screenings you can employ to gain insights.

Decide How Your Findings Will Affect Your Hiring Decision 

It is important to create a baseline policy as far as how you will respond to your findings. You want to ensure consistency and balance in your decision-making.

Establish the Point in the Hiring Process to Conduct a Background Check 

Again, consistency is crucial in deciding when to conduct a background check to ensure a level playing field for all candidates. You want to create a seamless and unquestionable process.

Check All Legal Regulations and Considerations 

Consult the Fair Credit Reporting Act (FCRA), which governs consumer reporting agencies, or your professional background check partner, to determine what information you can obtain and use in your decision-making.

As a basic rule, though, it is not permissible for consumer reporting agencies (CRAs) to report certain types of information for positions that pay under $75,000 per year when the information is more than seven years old. Some of the information you may discover includes:

  • Bankruptcies
  • Liens
  • Civil lawsuits and judgments
  • Arrests that do not result in convictions

If you do consider rejecting an application due to background information you discover, consult the FCRA’s adverse action process, legal counsel or your background verification partner before proceeding.

How Long Does a Bank and Financial Institution Employee Background Check Take?

The timeframe for conducting a background check can vary, depending on your screening strategy. When you do it yourself, you will need to reach out to several agencies, such as the BMV or DMV, educational institutions and former employers. Then you need to wait to receive a response from each one. It would take several days or sometimes weeks to do it yourself and complete a report for your hiring team, which poses a considerable challenge for everyone, including your ideal candidate, whom you might lose if the process takes too long.

Vet and Hire the Top Banking and Financial Industry Professionals for Your Company

With our Global Verification Network professionals’ assistance, you can accelerate the background check process. You don’t need to wait weeks for the answers that you need to hire the right candidate as quickly as possible.

Contact us to learn more about our professional and expedient approach to background checks to keep your customers, employees, business and reputation protected.