Over the last 12 months, a quarter of financial services candidates failed background checks in the UK, with failure rates driven by increased employer risk aversion, rechecking existing employees, and the rise of social media checks
New data from background checking platform Zinc reveals that the financial services industry faces a growing challenge in background checking candidates and existing employees as regulations tighten, leading to a background check failure rate that’s the third highest in the UK.
According to its data, the average candidate failure rate for financial services companies over the last 12 months was 23%, compared to an average of 16% across all other industries. Only other heavily regulated industries, such as biotechnology, pharma & medical (25%) and health, medical & care (25%) have similar failure rates. Turnaround times are also being impacted by the volume and complexity of the checks.
This failure rate is significantly contributing to challenges the financial services market is facing, from a slumping market due to economic volatility and junior roles being lost to AI-deployments, to a growing digital skills gap. Identifying the best candidates has never been more challenging or important for the financial services sector.
David Cole, Head of Regulatory Affairs and Policy at Zinc comments: “Financial services companies are becoming increasingly risk-averse. We’re seeing employers add more checks, including adverse media and social media screening, because criminal record checks have been devalued over the last 10 years. What’s more, with the UK looking to tighten hiring regulations around foreign workers, firms are going to be faced with a significant challenge when acquiring the necessary staff. More checks, across more geographies, is going to lead to increasing failure rates and lower levels of new hires.”
The advantages of automation
The financial services industry also conducts a higher volume of background checks than any other sector, with Zinc customers having completed 219,337 checks since 2023. Almost 30,000 candidates in financial services were checked in the last 12 months alone. The average turnaround time per candidate is seven days, meaning approximately 199,346 days were spent checking financial services candidate backgrounds in the past year.
Cole continues: “With a significant portion of the UK population having secondary income streams, conflicts of interest are a growing concern. Firms are also having to navigate checks and annual recertification processes around things like directorships, credit history, PEPs and sanctions. It’s not just about pre-employment screening anymore, it’s about regular and continuous security measures for staff.”
Addressing these challenges, Zinc’s financial services customers are projected to save over 3,300 hours in background checks for candidates and employees in 2025 thanks to automated screening software. Two-thirds of their financial services customers selected Zinc for its compliance, helping them stay ahead of evolving regulations. And in doing so, Zinc’s financial services customers are projected to save over 3,300 hours in background checks for candidates and employees in 2025 thanks to comprehensive automated screening software.”
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