The Future of Financial Background Screening for Employment including, Identity, Innovation, and Global Readiness

Shifting regulations, economic uncertainty and an explosive political climate are only a few of the challenges financial institutions are currently facing. In this complex landscape, companies are seeking partners who understand their need for hiring on a large scale while remaining compliant with global requirements.

In our latest edition of FA Live, we’ve invited Jeremy Day, Enterprise Accounts Executive at First Advantage, to go over some of the top questions financial institutions have about background screening for employment, managing a global hiring program and the challenges of maintaining compliance in a constantly evolving environment. We’ve summarized Jeremy’s answers below.

What makes the background check needs for employment unique in the financial services industry?

Financial service companies operate in a high-risk, heavily regulated industry, which means that a strong employment background screening program is absolutely critical. Regulatory requirements are stringent and might require fingerprinting-based background checks. Screening may also extend to using tools that help verify a candidate’s identity, establish trust and identify any history that would violate hiring policy and may impact reputation. Social media screening might be used to confirm someone’s online social presence.

Past the initial background check, post-hire monitoring might be used to check sources to see if an employee is still eligible for work. Finally, many screening programs in the finbiz industry are global in nature, which means that institutions must remain compliant under all applicable laws in those countries.

How are financial institutions adapting hiring and screening to our post-remote world?

Remote work became necessary during the Covid-19 pandemic and ultimately became more common-place afterward, but there has been a recent shift back to traditional in-person office work. Nevertheless, there remains a strong need for remote hiring practices, especially around recruiting and interviews. One key focus for HR professionals in the financial industry is to establish a robust national network for fingerprint collection for US based positions requiring FBI channeling searches, which is a legal requirement for some roles in the financial services industry.

According to advisory firm Gartner, 1 in 4 applicants will likely be fake by 2028. In light of the growing concern around deepfakes, there is a need to check for identity fraud and so digital identity solutions assist with that.

Within the financial services industry, how are integrations and automation improving outcomes for organizations?

Top candidates are in high demand. Meanwhile, talent acquisition teams haven’t necessarily grown to meet additional needs, which means they need to do more with less. As a result, process improvements and automation have become extremely important. A seamless integration between companies’ human capital management or applicant tracking systems (ATS) and background screening is essential for employers to scale and audit their hiring program.

A client matrix adjudication (CMA) tool is instrumental to streamline the review process and allows the HR team to operate efficiently. Automating a predefined adjudication process can also reduce manual tasks, which has multiple benefits; on top of expediting hiring, it also helps with consistency. Finally, centralized reporting is vital to manage hiring across multiple branches and regions.

What are the benefits of an industry-focused customer support for financial institutions?

First Advantage’s customer support teams specialize in individual industries, which has major advantages for customers. In the financial industry specifically, our teams possess in-depth familiarity knowledge of applicable laws and concerns that our customers share with us – allowing them to speak the language of financial institutions.

Our teams are also well-versed in helping establish screening programs required for onboarding new hires, and familiar with how financial institutions operate on a global scale, helping you streamline the hiring process. This expertise is crucial in navigating the complexities of the industry, setting us apart from our competitors.

How do you see background checks evolving for financial institutions?

Background checks will continue to evolve significantly for financial institutions in the coming years, with identity services as an add-on ahead of the screening process remaining a major focus. As bad actors continue to infiltrate companies, the need for a robust screening program will intensify.

Regulatory compliance will remain critical, especially for institutions pursuing international expansion. The political and economic climate, along with a constantly evolving regulation, adds a layer of complexity to an already challenging global landscape. In this regard, First Advantage has an edge over the service offerings of our competition, with our global platform enabling us to conduct searches wherever candidates may have been located in the past and scale our services in alignment with our clients’ needs.

What are some tips for financial institutions aiming to modernize their screening program?

Financial institutions should not settle for anything less than best practices promoting a trustworthy corporate culture. Instead, they should ask tough questions of their screening providers.

Technology is one of these key focus areas, since a background check partner embracing advanced technology can reduce manual workloads, enabling staff to focus on making hiring decisions and strategy instead.

The candidate experience is another priority for financial institutions, since a seamless and efficient process can support the employer’s brand and attract top talent.

Finally, institutions should leverage data analytics to gain insights into their screening processes, identify any bottlenecks within the program, improve the decision-making and enhance their overall effectiveness.

It’s easy for financial institutions to get overwhelmed by the complexities of hiring in a shifting regulatory environment, especially when they seek to expand their operations around the world. A global partner with industry-specific expertise, like First Advantage, can provide you with the support and consultative guidance you need to scale your program efficiently while keeping track of your complex compliance requirements. Contact our experts to inquire about setting up a program tailored to your needs.