By: Dr. (Col) John Chenetra, President, SecUR Credentials, August 16, 2018

Banking and finance are the most critical and sensitive sectors in an economy, as they are intrinsically involved with an individual’s property, money, and investments. However, several highly publicized cases of scandals and frauds involving a number of established banks have come to light recently, which has greatly eroded the public’s confidence in them.

Additionally, the perpetrators in most of these cases were employees of the banks themselves. In fact, more than 50 percent of all frauds are estimated to have been committed by an insider, which further highlights the criticality of background checks and verification in the Banking and Finance sectors:

Changing Technology

Given the fact that we’re in the digital age, where many financial transactions are conducted online, the capacity and incentive for scams are considerably higher than ever before. Most of the money in the world today doesn’t exist in the form of notes or coins, but rather, as digits on a screen. This makes a great majority of digital transitions highly vulnerable to anyone with substantial knowledge of cyber security and systems architecture. Today, more often than not, bank robberies are committed not by men with masks and guns, but by men with degrees in accounting, from behind a screen, making background checks indispensable for all banking and financial institutions.

Changing Mind-Sets

With the increased ease that technology provides us, there has been a fundamental change in people’s mindsets, particularly with regard to the desire for instant gratification. The anonymity provided by technology has helped remove many of the apprehensions and fears of people when it comes to committing a crime. Taking the easy way out seems even more lucrative than before, leading to a rise in white-collar scams and fraud. As a result, digital crimes have increased significantly, with perpetrators coming up with newer and better ways of fooling authorities.

Changing Demographics

Banking and finance, which were once the professions of the affluent now employ large segments of the middle-class and weaker sections of society. While this is certainly an achievement that the entire country should celebrate, because it is the testament to upward mobility and an improving economy, it’s not without its own share of problems. There are often personal commitments and compulsions brought in by the dependence of family members which can tempt an otherwise honorable employee to commit unethical actions out of desperation or necessity.

Given the numerous different motivations which could drive an employee to commit such egregious acts, it becomes necessary for employers to preemptively weed out potential criminals by looking for red flags in their past. Here are a few simple parameters that an effective background check should entail:

Credit Score Checks

In most cases, save a few exceptions, credits scores are an excellent way to gauge an employee’s fiscal responsibility. People with low or negative scores are likely to be tempted into fraud given their immense financial burdens, and should ideally be avoided.

Employment History Checks

The most accomplished fraudsters do not act on impulse, and often, have a long history of fraud dating back to their early careers. For this reason, it is necessary for a recruiter to look far back into a candidate’s employment history and find out exactly why they left their previous organisations. On many occasions, an employee’s releasing letter alone does not give away the true reason they were fired or asked to resign, which is why, it is important to talk to trusted sources from within their previous organisations, whenever possible.

Banking and finance attract some of the smartest professionals in the world, but unfortunately, intelligence and morality do not always accompany each other. Thus, it is necessary for the industry to come together and implement a strong system of background verifications, in addition to no tolerance policies against any transgressions. It’s only through serious introspection and reforms that we can ever hope to win the confidence of the people we serve.