What Background Checks Do Banks Use

Rigorous background checks for individuals applying for positions in the banking and finance industry are becoming standard practise in the mail financial crisis landscape. Candidates need to exist prepared for these checks – here's what you need to know.

Financial regulators across the world who are anxious to avert a repeat of the events that led to the fiscal crisis, and under force per unit area from a hostile public, are enervating that individuals in the finance industry should be held every bit answerable every bit the institutions they work for. The process of screening and approving applicants earlier they are authorised to conduct sure activities in the financial sector has become more than stringent as a result.

Checks are dependent on each country's legislation. In the UK, under the Fiscal Services and Markets Human activity 2000, individuals willing to perform i or more controlled functions on behalf of an authorised firm have to be approved by the Financial Conduct Potency (FCA). Advising on or selling investments such as equities, life assurance policies, collective investment schemes and individual or stakeholder pensions are all controlled functions. The criteria the FCA says it will consider when evaluating a candidate for approval include the post-obit, some of which are somewhat left to a certain amount of estimation:

Honesty
Integrity and reputation
Competence and adequacy
Financial soundness.

Background checks often go beyond what regulators require

My colleague Jillian Inglis, Compliance Manager at Hays, notes that the background checks that are completed are not limited to only what the regulators examine. They also include a visitor's in-house standards, a clients' specific requirements and they also depend on the various levels of risk inside concern areas.

Jillian says the different types of checks conducted in the UK include, but are not limited to:

Eligibility
Credit checks (national and international)
Basic disclosure Scotland checks
Referencing (employment history checks)
Specially designated nationals (SDN) checks
Media and professional person qualification checks.

"Candidates need to be honest and open about their situation, such as their credit history, completion of studies and results received, job titles and and so on. They must ensure that the data they put on their CV is authentic in relation to the above checks, as errors tin can be viewed badly and affect the candidate'southward integrity," she warns.

In Australia, my colleague Carl Piesse, Business Director at Hays, says the bulk of checks cover:

Eligibility
Police checks
References
Pedagogy/qualification,
Employment verification (lfor the past x years)

"They may also include checking salary – so candidates need to be honest on that front end!" Carl says. Other checks may include directorship check to ensure there are no conflicts, bankruptcy and credit checks, and in some cases a social media bank check. "Candidates take to be able to provide a lot of information and documentation….It is of import for them to be prepared for this as well as agreement the importance of the checking process," Carl suggests.

The credit checks conundrum

Mags Arthur, Director of Hays' Financial Services and Professional Services divisions in Scotland, says candidates with a poor credit history should exist very wary, as later the credit crisis, an increasing number of banks started to turn down people if they could not pass a credit check. "In the early days, when we were inundated with applications, the candidates questioned by the consultants over their credit status would often think they would pass a credit check. However, when the checks were ran a loftier percentage of people were failing.

As a effect, fast-forwards seven years and many people now remember there is no point in applying for financial services and banking roles equally they know they will non pass a credit bank check." This is despite the fact that one of the impacts of the banking crisis is that at that place were many redundancies and the people who lost their jobs ofttimes struggled to maintain their financial commitments. And equally Mags points out: "no matter what role a candidate goes into they are automatically credit checked. This tin range from someone working in a mailroom scanning documents to a marketing director or an HR adviser."

Are employers over-cautious?

Many organisations accept become overcautious, only this is a new reality that candidates have to contend with. "Every bit a result of the duties that are imposed on individuals and organisations by FIT two.ane of the FCA Handbook ("Honesty, Integrity and Reputation") there is a tendency for organisations to desire to know everything almost a candidate. Some candidates and then feel as though there is a professional obligation to provide all of the data that an employer or recruiter has asked for," explains Christopher Proctor, legal officeholder at Nacro, the United kingdom's largest crime reduction charity.

Christopher, who believes the FCA appears to accept the well-nigh fair and balanced policy when dealing with criminal record problems, says candidates can check the FCA's factsheet on determining whether a person is 'fit and proper'.

He also recommends Nacro's Public Communication Helpline for candidates within the fiscal sector that crave advice and guidance on what criminal tape data they are required to disclose to a regulator, employer or recruitment agency. This is whether they are applying for an 'approved' Fiscal Conduct Authority ("FCA") role or 'non – approved' office within a regulated organisation.

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