An independent body tasked with cleaning up the finance industry has recently recommended that the UK Financial Conduct Authority (FCA) expand the use of criminal background checks on owners and controllers of financial institutions. This recommendation aims to help prevent criminals and their associates from getting any controlling interests in financial institutions. Although we’re all familiar with money laundering rules, and perhaps the need to have a DBS check if you are planning on working in a bank or other financial institution, the new recommendations could mean that identity checks and DBS checks apply to a far more people than they do at present.
Current Background Checks
Currently, the FCA conducts criminal background checks selectively, based on specific concerns about an individual’s fitness and propriety. This generally applies to higher level positions in banks and other financial situations, in roles which can influence the strategy of the company, or which give access to large sums of money or control of the company’s accounts.
The FCA is now proposing to require criminal background checks, obtained through the Disclosure and Barring Service (DBS) or an equivalent service outside England and Wales, for controllers and beneficial owners, widening the process to take in people with less control, or those involved in cryptocurrency or payment services.
Standard DBS Checks
There are three levels of DBS Checks and it is proposed to continue using standard checks for people working in financial services roles. A basic check can be used to look at anyone’s criminal background, and businesses might choose to use these to make sure they are not employing people with a current or serious criminal record. An enhanced DBS check is the most detailed level of check, and is generally reserved for people who are going to be working with vulnerable adults or children. People who work in financial services are generally asked for a standard check, which lies between the two levels of check in terms of detail.
A standard DBS Check will look at not only the most recent or serious issues in someone’s criminal past, but also at other matters which may be relevant. For positions involving money, employers are particularly interested in matters concerning fraud, theft or dishonesty. Very minor or distant convictions are unlikely to rule someone out from working in a high-level financial service position, but a long history of crime almost certainly will.
Credit Checks
For anyone applying for a senior position in finance, or one involving access to accounts or customer money, another standard stage of the application process is a credit check. This is designed to weed out people who have been made bankrupt, or who have run up a high level of debt. Financial services companies are concerned that high levels of debt could indicate that the applicant is more likely to be tempted to commit fraud, or to be a target for blackmail. These are soft credit checks, which will not affect someone’s credit rating. The job applicant must also give their consent for these checks to be done.
