Background checks what candidates need to know Viewpoint careers advice blog

Background checks what candidates need to know Rigorous background checks for individuals applying for positions in the banking and finance industry are becoming standard practice in the post financial crisis landscape. Candidates need to be prepared for these checks heres what you need to know. Financial regulators across the world who are anxious to avoid a repeat of the events that led to the financial crisis, and under pressure from a hostile public, are demanding that individuals in the finance industry should be held as accountable as the institutions they work for. The process of screening and approving applicants before they are authorised to conduct certain activities in the financial sector has become more stringent as a result. Background checks are dependent on each country’s legislation. In the UK, under the Financial Services and Markets Act 2000, individuals willing to perform one or more controlled functions on behalf of an authorised firm have to be approved by the Financial Conduct Authority (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 following, some of which are somewhat left to a certain amount of interpretation: Honesty Integrity and reputation Competence and capability 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 simply what the regulators examine. They also include a company’s in-house standards, a clients’ specific requirements and they also depend on the various levels of risk within business 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 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 so on. They must ensure that the information they put on their CV is accurate in relation to the above checks, as errors can be viewed badly and affect the candidate’s integrity,” she warns. In Australia, my colleague Carl Piesse, Business Director at Hays, says the majority of checks cover: Eligibility Police checks References Education/qualification, Employment verification (lfor the past 10 years) “They may also include checking salary so candidates need to be honest on that front!” 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 check. “Candidates have to be able to provide a lot of information and documentation….It is important for them to be prepared for this as well as understanding 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 be very wary, as after the credit crisis, an increasing number of banks started to reject 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 high percentage of people were failing. As a result, fast-forward seven years and many people now think there is no point in applying for financial services and banking roles as they know they will not pass a credit check.” This is despite the fact that one of the impacts of the banking crisis is that there were many redundancies and the people who lost their jobs often struggled to maintain their financial commitments. And as Mags points out: “no matter what role a candidate goes into they are automatically credit checked. This can range from someone working in a mailroom scanning documents to a marketing manager or an HR adviser.” Are employers over-cautious? Many organisations have become overcautious, but this is a new reality that candidates have to contend with. “As a result of the duties that are imposed on individuals and organisations by FIT 2.1 of the FCA Handbook (“Honesty, Integrity and Reputation”) there is a tendency for organisations to want to know everything about a candidate. Some candidates then feel as though there is a professional obligation to provide all of the information that an employer or recruiter has asked for  in relation to past criminal conduct or allegations even though there isn’t,” explains Christopher Proctor, legal officer at Nacro, the UK’s largest crime reduction charity. Christopher, who believes that as far as professional regulators go  the FCA appears to have the most fair and balanced policy when dealing with criminal record issues, says candidates can check the FCA’s factsheet  if they are concerned about whether they would be deemed ‘fit and proper’ following a criminal record disclosure. He also recommends Nacro’s Public Advice Helpline for candidates within the financial sector that require advice and guidance on what criminal record information they are required to disclose to a regulator, employer or recruitment agency. This is whether they are applying for an ‘approved’ Financial Conduct Authority (“FCA”) role or ‘non â€" approved’ role within a regulated organisation. I hope you found the above information useful. Please see below for links to  other financial markets  blogs  which may be of interest to you and your teams: Too much pessimism clouds silver lining for Chinas economy Digital destruction: Could Fintech kill banking jobs? The basics of business partner functions Business partners should be seen, and heard Intrapreneurship and labs: How banks are fostering innovation China stock market jitters: Keep calm and carry on Marty McFly, Twitter better Investor Relations How banks are changing old ways to attract Millennials To share your thoughts on this article and to stay up to date with the latest business, employment and recruitment news in the financial markets sector, please join our LinkedIn group, Financial Markets Industry Insights with Hays. Join the conversation