The ‘Banking, Financial Services, and Insurance (BFSI) industry play a crucial role in the sustainable growth of an economy. However, the rate of malpractice and fraud is rather high here. Hence background checks in BFSI is critical.
The most common of them is insurance fraud. As per research, insurance fraud is typically committed at the time of applications or claims. They cost a whopping ₹45,000 crore every year to insurance companies.
Chances of such risks level up when the bank is practising an inept customer onboarding process. Especially in times like the pandemic, where customer-employee interaction is reduced to a far extent.
What can insurance companies do?
Insurance companies should execute a pre-eminent strategy of screening claims as a top priority. Aside from this, banks also need to strengthen their customer onboarding game. If the customers onboard are verified to be genuine, the risks of a fraudulent encounter can be reduced notably.
Similarly, a well-built employee onboarding process is a necessity. As banks comprise sensitive data, the employees hired must be legitimate, or the bank may risk exposing this data outside.
All these goals can be obtained via a reliable Background Verification process! Background checks in BFSI can assist in the investigation of claims, creating awareness about suspicious or criminal activities.
Key challenges in background verification
- Inaccuracy of data provided: Data legitimacy is fundamental when it comes to background verifications. Providing inadequate information, completely missing out on filling certain sections, or providing incorrect information leads to continuous back and forth between the company and the candidate, causing frequent delays.
- Decentralized database: Past employers, courts, educational institutions, etc., serve as the database for gathering this information. In the absence of a single database, delays and data manipulations, and other complexities are bound to arise.
- Turnaround time: Background checks are heavily dependent on the sources of verification, and human resources often face lags in this aspect. This causes long lead times and delays the entire process.
- Trust of customers: When customers call their insurance agent, they’ve probably endured a difficult or painful experience. Insurance professionals work with people involved in accidents, victimized by criminals, or subjected to personal loss. Your customers count on their representatives to be knowledgeable, credentialed individuals who can help during difficult times. IDfy provides Credential Verification services that ensure your applicants are qualified for the job.
- Difficulty in sourcing documentation: Due to the high attrition rate in the insurance industry, sourcing documentation for background verifications is challenging. Job hopping makes the process even more chaotic. Background checks in BFSI is essential as candidates possess sensitive information, which can pose a threat to the organization when leaked.
- Hiring in the new normal- Pandemic: With the onset of the pandemic, the BFSI sector has transformed into a digital platform. With reduced face-to-face interactions, digital background checks are the need of the hour to speed up the screening process, interview process, paperwork, etc.
What does a background check do?
Background verifications are the premiere screening strategy to help stave off crimes before they occur. It helps you effectively and efficiently investigate claims, alert you to potential signs of criminal activity, and, hopefully, begin to reduce the number of financial losses that currently plague the BFSI industry.
A possible talent crisis was expected in the insurance industry with more than 400,000 positions to fill by 2020. It implies a 30% experienced workers retiring in a year and the need to replace them with quality, well-screened applicants.
Risks of onboarding without background checks in BFSI
Onboarding a customer/employee without a background check can lead to potential threats. Employers may rush into hiring individuals who are not qualified or not have a necessary license or have a serious criminal record. Thoroughly screening candidates before making a final offer is paramount.
Similarly, banks may rush into onboarding customers to hit targets. But if they aren’t genuine, banks might expose themselves to potential fraud.
Background check online confirms identities, verifies education, licenses, and employment, and notifies you of reportable criminal records. You can also request an Employment Credit Report for relevant positions to learn about the applicant’s financial history.
If you skip the background screening process, you may hire someone who is not qualified to represent your company and end up terminating their employment. This leads to yet another time-consuming hiring phase. Reduce the hiring issues you already face by properly screening people before extending offers.
How can IDfy help with background checks in BFSI?
Hiring new employees is a complex task. It is important to note that an estimated 73% of applicants lie on their resumes in the financial services industry.
At IDFY, we help you, screen candidates, in a fast-paced environment adhering to fool-proof practices. Our background checks for BFSI can help you in hiring the best candidates and ensure verified customer onboarding.