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5 Reasons Banking and Finance Companies Need Background Checks

 In Background Checks, Banking & Finance, BLOG

5 Reasons Banking and Finance Companies Need Background Checks

Pre-employment background investigations are important in all industries. In the banking and finance industries they are particularly critical, however. Employees of financial institutions have access to a vast amount of information such as customer financial records, corporate protocol, and other highly sensitive material. Additionally, employees are entrusted with access to valuable assets like on-site money or passwords needed to transfer funds.

Conducting a thorough background investigation before bringing banking and finance employees onboard is a critical step in ensuring the security and reputation of your company. As an employer, you have a right to also conduct periodic background checks to ensure that nothing in your employee’s life has changed in a way that would make them unfit to remain under your employ.

Here are five reasons a background check is critical before making any hires, as well as on a periodic basis once an employee is onboarded.

1. Protecting customer information.

The reputation of your company is built upon the security of your customer’s information. In a world of frequent data breaches and hacks, it’s imperative that your business do all it can to keep information secure.

Performing an Employment Verification and Reference Check helps to ensure that potential hires have a clean work history, have been compliant with industry regulations, and that they’ve done the work they say they have. Without this assurance, your facility is open to all sorts of litigation if the worst happens and an employee isn’t honest about their past. Interviews with past employers can help to verify that an applicant has the ethical backbone you need to maintain your company’s reputation.

Other services, such as a credit check, can help to verify the reliability of an individual, as well as their stability over time. In the financial industries, this sort of assurance is of the utmost importance.

2. Safeguarding company assets.

Your financial facility safeguards access to cash, accounts, and sensitive documents of all kinds.  It’s important to verify that new hires have no criminal background, history of theft, or other problematic behaviors before onboarding them. Even things like theft of company time may come up in professional reference checks, so be sure that your background investigation includes them.

If your employees will be traveling for meetings or to transport assets (as in the case of secured deposits by banks), a DMV search should also be conducted to verify that there are no questionable traffic violations on their record.

3. Ensuring the highest-quality customer experience.

You’ve built your company’s reputation on excellent customer service. Expert knowledge, integrity, and high-quality service are critical aspects of why your customers rely on you for their banking or financial needs. A thorough pre-employment screening can help to verify that new team members will meet company expectations and help to further your mission to provide unparalleled customer care.

4. Regulation and best practices for banking and money transfer licenses.

It is very difficult to obtain the licensure necessary to become a money transmitter. Regulations are strict and vary in all 50 states. If your bank or financial institution has already gone through the process of approval for money transfer licenses (essentially the ability to sell or issue payment instruments) it is imperative that your employees have undergone the background checks required by your license. Failure to do so puts your company at risk for significant legal trouble as well as loss of your ability to transfer funds.

5. Fiduciary responsibility and risk.

Regulations governing fiduciary responsibility are complex and have changed regularly in the post-Dodd-Frank era. Your financial institution should be extremely familiar with the current legislation that applies to your business. Risk associated with failure to comply with these regulations is tremendous–the impact a fiduciary misstep could have on reputation and finances should not be taken lightly. Ensuring that all employees undergo pre-employment and continued background checks can help to mitigate the risk of fiduciary law being violated.

Alliance Risk Group. is well-versed in full-scale background screenings for the financial industries, as well as in FCRA and other regulations. If you have questions about what your banking facility should be doing when it comes to background check best practices, we would love to speak with you. Contact us today!

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