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Employment screening mandatory in the financial sector

Due to the COVID-19 pandemic, we are on the brink of a new economic crisis. During such a crisis, the vulnerability of financial systems is exposed more quickly. A domino effect can occur in which the problems of a financial institution have immediate disastrous consequences for other players in the market. What laws and regulations were put in place in response to the global crisis of 2008? In order to prevent harmful situations and protect consumers, the Dutch government took various measures at the time.

Employment screening verplicht in de financiƫle dienstverlening

Two supervisors for cautious and conduct supervision Ā 

The government has appointed two authorities to supervise the correct actions within the financial sector. The Financial Supervision Act (Wft) brings together a large number of laws with the aim of enabling financial institutions ā€“ such as banks and insurers ā€“ to act in a more transparent, targeted and market-oriented manner. In doing so, the interests of consumers will be better protected. The Financial Supervision Act describes the duties of the two supervisors:Ā 

  1. De Nederlandsche Bank (DNB): Focuses on cautious supervision. In other words, DNB monitors the stability of the financial sector in general and the soundness of individual financial institutions. In addition, DNB checks whether they can meet their payment obligations to customers.Ā Ā 
  2. Netherlands Authority for the Financial Markets (AFM): Focuses on conduct supervision. In other words, the AFM monitors order and transparency within the financial sector in general and the relationships between individual financial institutions. In addition, the AFM checks how they deal with their customers.Ā 

Pre- and in-employment screening to ensure integrityĀ Ā 

In addition to an explanation of the above tasks, the Financial Supervision Act prescribes certain checks in order to guarantee the integrity of financial institutions on an ongoing basis. This employment screening is mainly used in integrity-sensitive positions with many responsibilities. Relevant personal data is checked before:Ā 

  • Onboarding new employees (pre-employment screening)
  • Self-employed persons and interim workers are temporarily deployed (pre-employment screening)
  • Promote existing employees (in-employment screening)
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Download the basics of employment screening
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Download the basics of employment screening
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Different parts of mandatory employment screening Ā 

In order to comply with the Financial Supervision Act, financial institutions are expected to include the following components in their screening process, depending on an employee’s new position:

ID-check

A check, both national and international, to confirm the authenticity of the identity document. In addition, the VIS register reports whether the identity document has been reported stolen or missing

Diploma check

A check of both the current education and the previously obtained national and international diplomas.

Reference check

A verification of work experience within the last five years. For example, a designated referee or HR department can be approached to check the following:ā€ÆĀ 

  • Is the specified former employer correct?Ā Ā 
  • Is the specified work period correct (to the day)?
  • Is the specified function correct?Ā Ā 
Integrity statement

A standard questionnaire with integrity questions about any ongoing criminal cases, ancillary positions, etc. After answering the questions, the list is signed by the person to be screened.

VOG check

Certificate of Good Conduct or its foreign equivalent. A Criminal background check of the country in question can also be requested.Ā Ā 

Credit check

Analysis of possible ongoing payment issues, companies by name and address, civil court rulings and registration in the guardianship register.

PEP, Sanction list and Adverse media check

A check of registration in a Political Exposed Persons list (PEP list) or Sanction list. To this end, various international lists are consulted. We also look at (international) media sources in which the person to be screened is mentioned.ā€Æ

Internet profile

Insight into all web pages on which a person to be screened can be found.Ā 

The importance of a solid screening policy Ā 

To ensure that you, as a (financial) institution, comply with current laws and regulations, it is necessary to create a solid screening policy. This document contributes to clear (internal) communication by objectively describing the purpose and means of employment screening. In this way, you create more support at every level ā€“ from employees to management ā€“ which is particularly important for in-employment screening. A solid screening policy is a guideline that you can always fall back on as a (financial) institution. It indicates when which screening component occurs in the screening process and who is responsible for the supervision.Ā Ā 

Of course, you can engage a professional screening organisation such as Validata to draw up an appropriate screening policy and carry out the employment screening. This way you can be sure that you comply with all sector-specific laws and regulations and that the integrity of your (financial) institution is guaranteed.Ā 

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