CAse STudy

Navigating change: how advancements in employment verification are reshaping screening in financial services

Navigating change: how advancements in employment verification are reshaping screening in financial services

The finance sector is one of the most heavily regulated industries worldwide. In response to the financial crisis, regulators globally undertook significant introspection. In the UK, Parliament established a commission to suggest improvements in the finance sector, resulting in the 'Changing Banking for Good' report aimed at enhancing financial services culture post-crisis.

What did the FCA implement?

Amongst the recommendations implemented was the requirement for regulated firms to ensure that their staff are ‘fit and proper’ to perform their jobs.  According to the FCA, the most important factors to consider here are:

  • Honesty, integrity and reputation
  • Competence and capability
  • Financial soundness
Why it’s worth getting it right!

Regulatory compliance

The FCA’s handbook outlines the criteria for ‘Competence and capability’, which requires individuals to havedemonstrated by experience and training that they are suitable … to perform their [duties]”.

In 2019, the FCA introduced the Senior Managers and Certification Regime (SMCR) to enhance standards, conduct, and accountability among material risk-takers in financial services. Senior Managers must be 'fit and proper' and are required to assess their ongoing suitability at least annually.

The SMCR mandates that financial institutions implement robust systems and controls to meet regulatory standards. One essential control for ensuring adherence to these is through employment screening.

Industry sensitivity – protecting stakeholders

With CV fraud on the rise, HR teams must have the right tools to ensure that the roles being recruited for avoid the pitfalls of false representation. For more information on how CV fraud takes place, please refer to our blog post highlighting a case study of an occurrence here

The finance industry, responsible for managing significant assets such as personal savings, retirements, and large institutional funds, is particularly vulnerable to CV fraud. Ensuring that individuals in key roles have the necessary skills and knowledge is crucial to safeguarding stakeholders, including customers, shareholders, and the public.

If a candidate is found to have falsified their CV, then the integrity is in question. If such a lie goes unnoticed, then further acts of dishonesty can take place – ones that have far-reaching consequences under criminal law such as aiding the proceeds of crime through money laundering or being responsible for insider trading. 

The repercussions of failing to verify candidates can be severe, including damage to the business's reputation and potential customer loss. That’s why leading Banks use Konfir to pre-screen staff as seen below.

CV fraud is on the rise and we’re seeing increasing numbers of organisations use Konfir to mitigate the fallout and reputational damage caused by false claims in employment history.

Numerous banks, insurers, and other financial services providers rely on Konfir for access to secure data sources to verify employment history instantly across both unregulated and, through pre-screening, highly regulated roles ensuring clients maintain the highest standards of compliance whilst enhancing the candidate experience.

Chris Milligan
CEO of Konfir

Konfir’s employment verification tool helps mitigate reputational and operational risks by identifying false claims about a candidate’s previous experiences. Leveraging authoritative data sources such as Open Banking, payroll systems, and tax records, Konfir provides accurate employment verification without traditional contact previous employer methods. This also eliminates the risk of reference fraud because the data cannot be manipulated.

Practical applications of Konfir

Konfir enables instant verification of employment history with the candidate's consent, identifying discrepancies, undeclared employments, and employment gaps much earlier in the recruitment process than otherwise would have been possible. This proactive approach speeds up hiring and reveals critical insights into the candidate’s history on day 1 of the screening process.

Konfir ensures candidates present a complete and accurate picture of their employment history. Any omission of previous experience triggers an alert in the system, prompting employers to follow up with a traditional reference for that employer, which may uncover adverse information, or with the candidate to understand why the omission occurred.  Afterwards, the employer can assess whether the omission was made in good faith, allowing for more informed hiring decisions.

This approach of verifying, rather than validating is what sets Konfir apart and supports recruitment teams in making well-informed decisions.

Konfir also helps to address common HR challenges. Our platform accelerates onboarding with instant verification and eliminates the need for less reliable self-attestation methods which often rely on the candidate's honesty and carry a higher risk of fraud. Konfir is also certified Attribute Service Provider (ASP) under the UK’s Digital Identity & Attributes Trust Framework (DIATF). 

We also provide instant reports for 93% of candidates of workers in the financial services industry, highlighting verified employment periods, gaps, and any red flags. This efficiency speeds up recruitment and ensures accuracy, offering HR teams a comprehensive view of each candidate’s employment history.

Konfir verifies staff who have been employed by organisations including:

Case study: How leading Banks use Konfir to meet their compliance obligations

The risks faced by employers in Financial Services are real and well-documented, which is why there are many employers in Financial Services, including over 10 banks, using Konfir to aid their screening process. Included in that count is a household name Tier 1 Bank, which uses Konfir in two ways:

Instant Verification of employment history for unregulated roles
In practice: Call center agent goes through screening for an unregulated role and the bank uses Konfir to evidence 3 years of Employment History. This means the employer does not necessarily need to request references in addition to Instant Verification.
Pre-screening for regulated roles
In practice: Managing Director is being screened to SMCR and uses Konfir as instructed by the Tier 1 bank to identify discrepancies at the start as a ‘pre-screen’ and to align with FCA recommendation to check honesty, integrity, and reputation. This means the bank will immediately know of any discrepancies, concealed employments, and potential reference fraud.
Tier 1 bank spotlight
89%
candidate conversion rate
55%
complete in under 6 hours
1 in 4
candidates have an undeclared employment
How this works in practice

By using Konfir, Financial Services employers receive instant pre-built reports for 89% of their candidates who chose to use Konfir. The instant report includes verified periods of employment as well as gaps in employment, with red flags instantly highlighted. This case study explores the tool-kit organisations employ using Konfir to mitigate fraud and protect their organisations, shareholders, and customers.

Check for differences in Employer Names

This example shows the verifier that the candidate didn't work for Bank of America as was declared on their CV, but rather they worked for Paystream Umbrella Limited, which is a well-known umbrella company.

Check for differences in Employment Dates

This example shows that the start date with Barclays declared by the candidate was 14 days different to what Konfir instantly verified using three data sources, which resulted in a new Gap in Employment that required investigation.

Check for Undeclared Employments

This example shows an additional (undeclared) employment identified by Konfir, that the candidate may have concealed to avoid a reference being sent to JP Morgan. This alert allowed the candidate's new employer to send a traditional reference to the undeclared employer anyway to ensure there was no malpractice being concealed.

Reference Fraud Check

This example warns organisations to perform extra due diligence when reviewing references and documents from the candidate because the declared employer name has been reported to Konfir as suspicious or being used as part of a fake reference in the past.

Company Trading Date Check

This example informed the candidate's new employer that the candidate has likely exaggerated their employment with Debenhams PLC, because the organisation stopped trading in 2021. Konfir sourced this data from Companies House and automatically compared the company's trading dates to the employment dates provided by the candidate.

The new employer also knew not to waste time chasing references from Debenhams given the company has dissolved, and instead to mitigate risk by leveraging alternative evidence like Konfir’s Instant Employment Verifications, character references, and social media checks. 

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