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Background Screening for FinTech: Everything You Need to Know

Learn how background screening can ensure trustworthiness and facilitate risk-free hiring in FinTech.
Finger pointing to an identity verification device denoting background screening for financial services.

The Financial Technology (commonly known as FinTech) industry is the most dynamic and fast-paced in the world by harnessing global technological advancements to deliver cost-effective and user-centric solutions in financial services. By the year 2025, this industry is projected to surpass $305 billion.

As a matter of fact, FinTech companies must maintain their trustworthiness and reputation and it all starts with the people who are expected to uphold these high standards. After all, one wrong hiring decision can have devastating consequences. This is where background screening comes into play. 

What Makes the FinTech Industry Different?

‘FinTech’ is a term used to describe the integration of technology and financial services delivery, making it safer, easier, and more accessible to end users. Additionally, it adheres to a structured guideline and framework specifically crafted for the FinTech industry to make it less susceptible to the risk of financial crimes. What adds to the challenges is the scarcity of talent in this sector, where the number of jobs available, outpaces the pool of experienced professionals.

Initially, a majority of the recruitment in the FinTech sector was through on-campus recruitment from top colleges and universities. However, the employers gradually realized that merely obtaining degrees from top universities, did not automatically equal a suitable employee in a FinTech environment. Therefore, in subsequent years, the focus shifted to hiring skilled personnel who have pursued professional courses and training. 

To help FinTech companies struggling with hiring skilled professionals, the HKMA launched the “FinTech 2025 ” strategy. As a result, the Industry Project Masters Network (IPMN) Scheme was launched in 2022 to facilitate industry training for postgraduate students and make them industry-ready with hands-on experience and desired skill sets. 

FinTech companies have successfully adapted to the changing landscape of recruitment. However, ensuring the credibility of their potential hires remains a top challenge. Considering all these factors, effective background screening helps ensure they meet their continuously changing requirements.

Why Background Screening is Important for the FinTech Industry?

Background screening is beneficial for the FinTech industry to ensure smooth operation and secure handling of financial transactions. Let’s take a look at the advantages;

  • Authenticity & accountability of candidates: Background screening helps employers verify the accuracy of the information provided by the candidates, their past conduct, and professional ethics. To further assess their suitability to work in an industry like FinTech which is vulnerable to financial misconduct. 
  • Financial fraud prevention: Honesty and integrity are the must-have qualities that FinTech companies look for in their employees. Also, reviewing a candidate’s history allows employers to make informed hiring decisions. This can help reduce the risk of financial crimes and unprofessional behavior.
  • Security & compliance: Prioritizing security and compliance to FinTech guidelines are non-compromisable to protect financial institutions, their clients, and customers from being targets of financial fraud. However, the nature of compliance varies according to the role of the potential hire and the place of employment. Therefore, employers need to ensure that they carry out the right checks according to local regulations to maximize recruitment opportunities.
  • Safeguarding a company’s reputation: The workforce of any organization has the potential to make or break its reputation. Even a single incident of financial scam or misconduct can lead to negative publicity. This negative publicity can then jeopardize the company’s hard-earned reputation. Moreover, background screening can help FinTech companies fortify a good reputation and attract new business opportunities.

Types of Checks Necessary for the FinTech Industry

The checks required in a particular industry can differ greatly. This depends on several factors, including the sensitivity of the information handled and the regulations in place. Therefore, employers must carry out the right type of checks that are most suitable for their niche of operation. Here are some common types of checks necessary for the FinTech industry considering its unique nature and requirements;

  • ID check: It includes verification of candidate details such as name, date of birth, address, etc against a trusted data source.
  • Education check:  It verifies the information provided by the candidate concerning their academic qualifications, degrees, and certificates. It also ensures that a person is not using someone else’s credentials, or worse, submitting fake diplomas from degree mills.
  • Employment history check: A candidate’s employment history offers valuable information about their skill set and work experience. In some cases, candidates may lie about their past work experience to land the job they want. This can be risky, as employers often verify employment history. Employment history checks confirm the accuracy of candidates’ initial information provided during the hiring process.


  • Reference check: Reference checks are a valuable tool for employers. By contacting a candidate’s previous managers or supervisors, they can gain insights into the person’s professional conduct, competency, and aptitude. As a result, based on the findings, employers can assess the suitability of a candidate for the position.


  • Credit check: It is imperative to ensure that a candidate is fiscally prudent with no anomalous credit report to shoulder their job responsibilities, which may require handling a significant amount of sensitive financial data. Therefore, employers typically obtain information regarding their potential hires from the recognized credit bureau of a country. This information is used to assess an applicant’s financial responsibility and history of meeting credit obligations. Based on the findings, they can either reject or take forward an individual’s candidature.


  • Financial regulation check: It helps to know if the candidate is fit and proper to handle financial-dealing roles or has been regulated, disciplined, or in any prohibited list by the financial regulatory authorities of a country before entrusting the person to join a FinTech company.


  • Civil litigation check: Civil litigation checks search for civil court proceedings or actions initiated against an individual in the past. Background checks are a crucial part of the hiring process. Also, they allow employers to assess the candidate’s honesty/integrity, which helps determine if there’s any potential liability for the company.


  • Global sanction check:  Similar to the Financial Regulation Check, this check casts a wider net in terms of catching individuals who have been involved in money laundering or terror financing activities and, consequently barred from conducting financial transactions. This helps ensure compliance with anti-money laundering and counter-terrorism financing regulations.
  • Criminal background check:  Learning, if a candidate has a criminal record – including the nature of the crime, the conviction period, and the form of punishment, allows the employer to make an informed decision on whether the potential hire is worth the risk.

Legal Considerations in Hong Kong for Conducting Background Checks

While conducting background checks in Hong Kong, FinTech companies must ensure compliance with the Hong Kong government. Although there is no specific regulation for the FinTech industry, employers must ensure compliance with certain local laws. This includes data privacy laws like the Personal Data Privacy Ordinance (PDPO) and Anti-Money Laundering (AML) regulations.

  • AMLO, or Anti-Money Laundering and Counter-Terrorist Financing Ordinance, imposes Customer Due Diligence (CDD) and record-keeping requirements on financial institutions. Additionally, it grants relevant authorities the power to supervise compliance.
  • Under the PDPO, companies must obtain written consent from individuals before conducting background checks that involve accessing their data. Companies must also be transparent with candidates about the information they collect. This includes explaining why the data is needed and how it will be used and protected.

By adhering to these legal guidelines, FinTech companies can ensure compliance with regulatory requirements and avoid future liabilities.

To conclude, the FinTech industry, with its ever-evolving nature and rapid growth curve, faces unique challenges and opportunities in terms of recruitment and compliance requirements. Moreover, comprehensive background screening is a safe hiring practice to ensure that FinTech companies comply with regulatory standards and maintain their organization’s trust and credibility.

Hiring in a FinTech industry? Navigating compliance for background checks can be tricky. Connect with our verification expert today!

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