Background screening for Fintech: Everything you need to know

Introduction

Background screening for Fintech is crucial to help busy employers make great hiring decisions. With Fintech leading the way as one of the most disruptive sectors in the business world, employers are having to move quickly to keep up with regulatory and industry changes while still maximising recruiting opportunities. Compliance background checks are increasingly important, with regulations such as MiFID 2, Sarbanes Oxley and PSD2, and the need for Equivalence across international financial markets.

Background screening is one area where Fintech employers have a real opportunity… Automation is a no-brainer. It offers additional transparency, a better candidate experience, more effective and efficient employment screening processes - all at the click of a mouse.  

This becomes even more important when you consider that failing to carry out due diligence can result in severe consequences. Background screening helps Fintech employers define, understand and manage hiring risks and remain compliant.

In this post, we’ll provide useful info about background screening in the Fintech sector; including which checks might be relevant to roles in Fintech and what challenges Fintech employers face.

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Download your comprehensive guide to hiring and background screening for your FinTech here.

What Makes Fintech Different?

Even though we now commonly associate it with concepts such as blockchain and virtual banking, financial technology has its roots as far back as the 1950s when the credit card was invented. And while the term “Fintech” wasn’t in mainstream use until internet banking really took off at the turn of the century, it has now become a burgeoning sector which is estimated to be worth $305 billion by 2025.

Background screening is well established in all industries. Not only to give employers a better understanding of their candidates but also for compliance. What makes background screening for Fintech different is the emphasis on compliance in a world where innovation is the norm and new technologies are trialed every day. The rate of change and demands on the industry is much higher, but Fintech is subject to the same (and often more rigorous) regulation and compliance requirements.

With decision makers scrambling to keep up with the times and legislate for the myriad new ways that financial transactions can be faster, safer or more convenient, employers in Fintech are under their own pressures. Recruitment practice must meet compliance laws for role operations and setting, in order to satisfy due diligence and AML regulations.

And, with many Fintech firms still in their infancy, they are also often operating under smaller budgets, with recruitment and AML allocations being particularly squeezed in order to provide more funding for innovation.

Why Should Employers Carry Out Background Screening in Fintech?

There are three main reasons why background screening is crucial for Fintech employers:

1. To ensure AML and compliance regulations are followed
2. To provide the best service to clients and customers
3. To protect company reputation

AML and Compliance For Fintech

Compliance will vary according to where in the world the employee or role is, but in general, regulations are designed to protect financial institutions and their customers from being targets for fraud or money laundering.

This means that, at minimum, most candidates will need to have their identity verified, as well as checking their criminal history.

There will likely also be requirements for data protection. Data protection is more commonly thought of in protecting consumer data, but in fact all personal data is protected. Data privacy laws are usually also applicable to candidate data, with restrictions on the safe collection, management and storage of personal information.

How Fintech Background Screening Improves Customer Service

With frequent reports and surveys suggesting that up to 40% of all applicants lie on their resume or job application, it is obvious that employers need to be really certain that details they have been provided with are accurate.

If a candidate says that they have experience in a particular area, and are then let loose on customers and fail to deliver, this could have a severe impact on customer experience and future business. Employers must make sure that the people they employ are up to the task.

Fintech employers should also look to appoint the very best candidates who can provide the highest levels of service to their customers or who can bring useful experience to the role. Consumer expectations are at their highest, and the review based world we live in means that company practices are often shared online for all to see. The very best marketing is in providing the very best service.

The Role of Background Screening in Company Reputation

When we make employment decisions we are entrusting the future of our company with our staff. A workforce has the power to make or break an organisation, from either positive or negative interactions with members of the public, to their ability to carry out illegal activity under the company name.

Particularly in the financial sector, any scandal will cost dearly. The true costs of an investigation into company practices add up to more than the financial burden of interruptions in operations. Reputational damage can be long lasting and severe.

Ensuring that all roles are subject to comprehensive background screening can help provide employers with peace of mind that candidates are who they say they are, have the ability and experience to carry out the role in question, and are honest and trustworthy.

The Best Background Screening for Fintech

Not all screening companies, checks or packages are equal. Fintech employers should look for the very best screening provision for their role. The main considerations are:

• Compliance 
• Recruitment Enhancement‍
• Candidate Experience

We have already discussed the importance of compliance in Fintech background screening but it can’t be said too much: compliance should be at the very start of the checking process. This means not only ensuring that the right checks are carried out for the role and territory, but also that the way in which they are carried out satisfies compliance and AML requirements.

After compliance, background screening must also enhance the recruitment and employment process. With a keen eye on the needs and scope of the role and operations, specific checks can help ensure that candidates are not only adequately experienced for the role but also safe to carry out their duties. For example, a Global Sanctions Check can protect against individuals involved in money laundering and terrorist financing, as well as identify anyone who might be prohibited from working in a certain role.

Applicant tracking and integration with current HR packages is crucial, to ensure that checks are kept up to date and repeated where necessary.

Perhaps most importantly, background checking must be convenient and simple for candidates, to prevent losing top talent due to a poor candidate experience. Ensuring candidates remain engaged throughout the process is key, by providing a straightforward and accessible platform for uploading necessary documents and verifying experience, references, and qualifications.

Candidates in the Fintech sector anticipate that any screening will be as up to the minute as the technology they are working with and developing. Applicants will expect online and automated checks rather than their slow, outdated ancestors. Failing to provide fast, efficient and innovative checks might send top candidates running to competitors.

Background Checks for Fintech

Employers should ensure that they are carrying out the right checks according to the requirements for their role or location. But in general, the main checks which are relevant for Fintech are:

• ‍Identity check‍
• Reference Check‍
• Employment History Check‍
• Global Sanctions Check‍
• Criminal History Check‍
• Civil Legislation Check‍
• Credit Check

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Key Takeaways

With Fintech such a fast moving sector, while also being heavily regulated, employers are under greater pressure to get background screening right.

And along with rapid developments in the sector, there are also frequent changes to compliance and AML requirements which must be met.

Fintech candidates demand convenient and innovative background checks that reflect the fast moving industry they are working in. Technology and automation plays a huge role in providing the best candidate experience.

It is crucial that employers carry out the right checks in order to protect their business and customers from bad recruitment decisions which could lead to criminal activity or bad customer experience.

Are your background screening processes providing your company and customers with the right level of protection?

What now?

Veremark are world leading background screening specialists, providing innovative and exclusive solutions to safer recruitment. All our checks are online, delivering fast, sometimes instant, results.

Talk to us today about starting your checks for free.‍

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